A property developer who received millions in council funding to redevelop the home of English League Two football club Northampton Town has been banned from running companies for 10 years.
The ruling from the UK’s Insolvency Service relates to the long-running saga concerning PTS Academy Stadium, whose redevelopment project is yet to be completed. Howard Grossman has had his disqualification undertaking accepted by the Secretary of State.
Grossman’s 1ST Land Limited firm was incorporated in August 2013 to act as the contractor for Northampton Town. Grossman was appointed as the sole director of the company and between December 2013 and July 2014, 1ST Land received a balance of at least £6m (€6.8m/$7.8m) from the club to go towards the costs of redeveloping the stadium.
The club in-turn received the funds from the local authority – Northampton Borough Council. However, by January 2015, 1ST Land entered into administration following the petition of a creditor before entering into Creditors Voluntarily Liquidation in December 2015.
The Insolvency Service said that due to the high-profile nature of the administration and the significant amount of money involved, it partnered with Northamptonshire Police to carry out an investigation in the public’s interest into the collapse of 1ST Land and Grossman’s conduct while a director.
Investigators discovered that Grossman failed to ensure the company maintained adequate accounting records or delivered a sufficient amount of records to the administrators. As a result, the Service said it has been not possible to determine the exact nature of more than £5.6m worth of payments made to various parties from 1ST Land’s accounts.
One such payment concerns approximately £2.65m of transfers made to two separate third parties, whether they were made as loans, and under what terms. Another payment investigators were unable to establish was whether approximately £1.5m was paid to the benefit of Grossman, his family and other connected parties and whether such payments were treated as dividends.
Sue MacLeod, chief investigator for the Insolvency Service, said: “Howard Grossman, like all directors, had specific duties as a company director but he blatantly disregarded them.
“The company’s insufficiencies when it came to record keeping means that we are unable to determine the exact nature of payments worth millions of pounds of tax-payers money, who along with supporters of the football club are the real victims here.
“We have been able to secure a substantial ban for Howard Grossman and if he breaches his disqualification, he risks being sent to prison.”
Northamptonshire Police is continuing its nationwide investigation into the missing Northampton Borough Council loan money and is working with other prosecuting authorities to recover public funds.
The Northampton Chronicle & Echo newspaper said police have prepared files on roughly 30 individuals as part of the operation. The Grossman ban comes after former club directors Anthony and David Cardoza, along with David’s wife Christina, last month lost a civil case brought against them by the borough council.
Anthony was ordered to pay back £2.1m to the council, while David was ordered to compensate the authority for works carried out to his home.
A spokesman for Northampton Town Supporters Trust said: “The conduct of Howard Grossman as a director of 1st Land Ltd has had a lasting and detrimental effect on the town of Northampton, its council taxpayers, the football club and its supporters and we welcome the banning order brought about by the Insolvency Service.
“This news follows on from last week’s High Court judgement in which Northampton Borough Council was successful in its action against David and Anthony Cardoza in respect of their actions while directors of Northampton Town Football Club.
“Although the judgement ordering the repayment to the council of very significant sums of money will not benefit the football club, we are delighted for the taxpayers of Northampton.”
Image: Northampton Town