Rule 2.13 – Significant Interest

The news this week that regional media outlet the Liverpool Post have published a “Special investigation” into Peter Mitchell and the Big Help Group (https://www.livpost.co.uk/p/special-investigation-the-collapsing), the second part of which is due to land on Wednesday, has given supporters of Southport F.C. plenty to think about. Should they be concerned – who exactly does own the club?

Some of you are likely to have spotted an odd looking legal statement appear in the matchday programme and website over the past few years relating to club ownership. It’s not a Southport specific statement, it’s been driven by the Football Association and its purpose is to be transparent about the ultimate ownership of football clubs. I want to try and help explain why it’s there and what it means in relation to the club.

The FA’s “publication of ownership” rule (2.13 – which applies to the National League) states that each Club must publish its legal name, its form (e.g. unincorporated association, company limited by shares or guarantee etc) and any identifier (e.g. company number). In addition the Club must also publish the identities of the ultimate owner (i.e. the name of an individual) of each Significant Interest in the Club.

The actual definition of a significant interest is at the bottom of this article but it’s a long winded way of saying that the national league consider significant interest to mean any party, whether natural person or legal entity, that holds more than 10% of the voting rights. And if it is a legal entity, they want to know who owns it.

Let’s look at who that applies to in relation to Southport Football Club.

A limited company called Big Help Group acquired around 76% of the issued shares in Southport Football Club in October. At the time, the sole shareholder in the Big Help Group was Peter Mitchell and therefore he easily passed the 10% significant interest threshold for the Football Club because he was able to make shareholder decisions on behalf of the majority shareholder. No other single individual at the time held enough of the remaining shares to qualify and therefore the match-day programme and club website listed solely Peter Mitchell. Prior to this, Ian Kyle was the only listed individual.

A number of weeks ago Big Help Group filed a confirmation statement at Companies House showing that the share structure of their business had changed. By 14 March each season a Club must provide the National League with evidence of compliance with Rule 2.13 as at the 1 March immediately preceding it. Depending upon when the structure of Big Help Group changed (the confirmation statement should show the date the shareholding changed, but did not) this may still have been Peter Mitchell as the sole person with significant interest. However, within fourteen days of any change in a Significant Interest at a Club or the appointment or removal of any director of a Club, written notice should be sent to the National League offices. The Club therefore must have by now notified the League of the change.

Let’s examine that change itself:

Big Help Group’s shares are now split as follows:

• One share of 50% is owned by Big Help Green Ltd
• Five separate allocations of 10% each have been acquired by:
  • Tammy Burgess,
  • Joe Goulding,
  • Lydia Davies,
  • Simon Cowie
  • and a company called a Strategic Capital Services Ltd, which is a company where the significant control is held by Paul Banks and Vanessa Banks.

The largest shareholder, Big Help Green Ltd, is a company that has issued just two shares itself, and they are held, one each, by Peter Mitchell and Colette Goulding. If there is no shareholder agreement to the contrary, with no shareholder holding an individual majority this company is effectively deadlocked in that shareholder decisions have to be made in full agreement.

Peter Mitchell no longer has sole control of Big Help Group, which means that he no longer has sole control of Southport Football Club.

He effectively now has a 25% stake in Big Help Group. Converting that shareholding into a percentage of the Football Club, both he and Colette Goulding could be considered to hold 19% each, which would normally qualify as significant interest in the eyes of the National League.

Where does this leave us in terms of who should be listed as a persons with Significant Interest for the Football Club?

Significantly none of the shareholders now hold a majority share in Big Help Group Ltd. Both Peter and Colette easily pass the 10% significant interest threshold on the football club via their joint stake in Big Help Green Ltd (effectively a combined 38% of the club), however in order to make a decision they would also require the agreement of at least one other Big Help Group shareholder, unless a shareholder agreement is in place to the contrary.

The minor shareholders could never achieve a majority without Big Help Green but whilst none of the minority shareholders in Big Help Group have significant interest on their own, ultimately any of them could still be considered to be able to influence a decision.

Currently all of the Big Help Group Shareholders are listed in the Rule 2.13 statement as holding significant interest in Southport Football Club. Whether they should be, or need to be, is a matter for the FA and National League to consider. Clearly however, any issues that affect the Big Help Group, or its shareholders, could have a significant impact upon the future of the Football Club. Given the attention the group is currently receiving, despite on-field safety having been achieved at the weekend, it might still be a nervous summer to be a Southport fan. Watch this space.

Addendum

“Significant Interest” is defined within the National league rulebook as “holding and/or possession of the legal or beneficial interest in, and/or the ability to exercise the voting rights applicable to, shares or other securities in the Club which confer in aggregate on the holder(s) thereof ten (10) per cent or more of the total voting rights exercisable in respect of the Shares of any class of Shares of the Club. All or part of any such interest may be held directly or indirectly or by contract including, but not limited to, by way of membership of any group that in the opinion of the Board are acting in concert, and any rights or powers held by an Associate (as defined in the Rules of The FA Challenge Cup) shall be included for the purposes of determining whether an interest or interests amounts to a “Significant Interest”. “

Previous articles relating to the takeover:

When is a director not a director? Who cares and why does it matter?

Nov 2023 Update – Big Help Group Takeover