Club news

ADMINISTRATION: QUESTIONING LENDOIRO

18 Feb 2013
The initial report of the administrators point out that Deportivo’s debt is 63% higher of what was previously reported by Lendoiro. For this reason they are requesting to separate the president for the financial decisions made at the club.

President Augusto Cesar Lendoiro is in deep trouble after been questioned by the administrators of Deportivo. The club was officially declared in administration at the middle of January, back then judge Zulema Gento named company AD CRYEX S.L.P as the administrator of Deportivo, and two men have been carrying with the responsibility of the job: Julio Fernández Maestre and Francisco Prada Gayoso.

One of the first things that both men had to do is to determine if the declared debt of Deportivo was the real indebtedness; last week they presented their first report. And their report turned to be negative as they understand that the real debt of the Galician club is around the €146 million and not the €93 declared by Lendoiro in December. This means that the debt is 63% higher of what presented in the last shareholders meeting.

The difference of €50 million is located in one single creditor: the Spanish Treasury. In the financial report of 2012 the club informed that the debt with the entity was €40 million, but the administrators consulted the Treasury and it turns out that the unpaid debt with them is €93.7 million. Lendoiro, however, warned that this situation might happen. In December he confessed to reporters that the club wasn’t completely aware of the debt with the Treasury as they were lacking information from the entity.

But the administrators aren’t buying the explanation of Lendoiro; besides they censored other procedures of the club, such as not inscribing the financial reports in the Commercial Register, which is a yearly obligation of any company in Spain. Besides, they questioned the salary of the president (1% of the budget), mainly that the decision of receiving this salary should have been informed to the government, but this communicate was presented until November of 2012, this means 13 years after Lendoiro’s got this salary.

They are also questioning the use of the accounting principles at the moment of building up the financial reports; in their opinion the financial reports aren’t reflecting the reality of Deportivo. For all these reasons the administrators are requesting to separate the president and his board of directors from the monetary decisions at the club; as they wrote in the final report presented to judge Gento, "In our view, the facts described demonstrate a blatant disregard for the rules, which means to lose our confidence in the managers we have referred [Lendoiro and his board of directors] so we estimate the modification of the status passing to a scheme with suspension of powers.”

What Maestre and Prada are asking is to name a “manager”; this person will be one making the monetary decisions of the club. Besides, they are requesting to suspend the salary of Lendoiro and his board of directors composed by three men: Felipe Marcos Hidalgo, Francisco Dopico and Jesús Rebollo.

This means that the power of Lendoiro and his board of directors would be reduced to the sporting aspects, while the manager will be the one assuming the financial decisions. It must be said that this situations are common in an administration process as normally the presidents and managers that led the football clubs to bankruptcy are usually sidelined from part of their attributions. Still, this situation is hammering the reputation of Lendoiro.

On this week, judge Gento will decide if she would accept the suggestion of the administrators, first she will heard the comments of the president, but a source inside the club told to newspaper La Opinión A Coruña that Deportivo won’t appeal the suggestions of the administrators, this in order to continue with the healing process inside the club.

Further investigations will determine if Lendoiro and his board of directors are guilty for all these situations, because the administration process also involves naming the responsible for the insolvency, so they could end finned or even charged with a crime.

ARCHIVE NEWS FEB/13

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