3rd June 2023; Hampden Park, Glasgow, Scotland: Scottish Cup Football Final, Celtic versus Inverness Caledonian Thistle; Peter Lawwell, Dermot Desmond and Michael Nicholson in the stand
Dermot Desmond’s influence on Celtic could be the subject of an investigation from the Takeover Panel.
That was one of the issues raised last night at a meeting on Celtic Supporters Limited.
Formed in October last year the CSL have had a resolution accepted for the 2026 Celtic AGM.
Over 300 shareholders have given their backing to the resolution.
The resolution is simply to request Georgeson to undertake the task of tracing the rightful owners of Celtic shares. It is a free service provided by Computershare the company that handles Celtic’s Share Register.
Over 20,000 individual fans bought shares in 1995, many have passed on, moved home or moved country. It is believed that around 20% of Celtic shares fall into this category.
Georgeson are experts at tracking down the rightful owners of shares in PLC’s and have been used by Lindsell Train to update their share register. Through Bank of New York Nominees, Lindsell Train own 16.14% of the shares in Celtic.
Aside from that whenever any person or group acquires more than 29.9% of the shares in a company the Takeover Panel rules oblige them to make an offer to all other shareholders.
DESMOND, TAKEOVER PANEL, SECTION 9
In 2005 The Takeover Panel granted Desmond a Section 9 waiver when he agreed to underwrite a share offer to raise £15m. That share issue was largely used to build the Celtic Training Ground at Lennoxtown.
The details of the waiver weren’t published but are widely believed to involve an undertaking not to exert undue influence on the company.
It is believed that concerned shareholders are close to asking the Takeover Panel to review how that has operated over the 20 years since Desmond’s stake surpassed 29.9%.
According to the Celtic website the biggest individual shareholding is held by Line Nominees Limited, a Desmond controlled company.
It isn’t difficult to come up with evidence of Desmond’s influence on Celtic despite the club having Executive Directors and a Chief Executive Officer.
Various managers have referenced discussions with Desmond on a number of issues.
Just under a year ago in his own name Desmond used the Celtic website to deliver an incredible attack on Brendan Rodgers. In his own words Desmond discusses his role in contract discussions with the then manager who resigned in the final year of his three year contract.
Like Desmond Sharon Brown and Brian Rose are also Non Executive Directors. It is very difficult to find any reference to Brown or Rose by anyone associated with Celtic.
HOW DESMOND BUILT HIS STAKE IN CELTIC
After initially investing in Celtic in 1995 Desmond bought 25% of Fergus McCann’s 51% stake in 1999. That provided Desmond an additional 12.5% of the shares in the club.
Desmond again bought into the share issue in the summer of 2001 on the back of Martin O’Neill’s arrival and the first domestic treble in 32 years.
Ahead of the 2005 Share Issue Desmond was granted a Waiver to Rule 9 from the Takeover Panel.
The BBC announced:
Celtic have announced a share offer designed to raise £15m to fund their new football academy and reduce the football club’s debts.
Major shareholder Dermot Desmond will underwrite the issue to £10m but insists he does not wish to take outright control of the Glasgow club.
The Irish Examiner explained the mechanics of that arrangement:
Mr Desmond, the largest shareholder in the club, will underwrite £10 million (€14.6m) of the £15m (€22m) rights issue.
Celtic will issue one new share for every two held by existing shareholders at 30 pence a share 13p below closing price last week.
If all shareholders do not take up their rights, Mr Desmond would end up owning more than 30% of the club, the level at which he would have to make a full takeover bid. The club is asking other shareholders and the Takeover Panel for a waiver from this obligation.
That waiver was granted although the detail was never published.
It is believed that the waiver was given on condition that Desmond doesn’t exert undue influence on the workings pf the PLC.
CELTIC SWITCH FROM LONDON STOCK EXCHANGE TO AIM
At the time of the 2005 share issue Celtic switched from the London Stock Exchange to the Alternative Investment Market. The reason given was that the switch would allow greater flexibility of its rules to quote the BBC report.
Now it could be the case that concerned shareholders will request the Takeover Panel reviews their 2005 ruling and how it has been played out.
At some point this year the Nominations Committee was reduced to one person following the resignations of Peter Lawwell and Tom Allison. Clearly one person can’t be a Committee.
Last month Mark Keane and Raymond Buchanan were appointed as Non Executive Directors
Just under a year ago there was a statement on the Celtic website from Desmond on the back of Brendan Rodgers’s resignation.
It would be quite a stretch of verbal gymnastics to claim that undue influence on the PLC wasn’t being exerted by that Non-Executive Director.
If an investigation is carried out Desmond and existing Directors and Executives would be obliged to be interviewed and answer questions.
Last year Celtic held their AGM on November 20 with the company required to give shareholders three weeks notice of the event.
Desmond hasn’t attended the AGM in person since 2006, in recent years he has been represented by his son Ross.
Excellent article.
Was always thought the Despot Dictator DD was interested for 2 reasons, capital gain absolutely ( he’s money mad and EPL was a possibility at that time) but also Irish Social Kudos ( Him and JPM and JM were MUFC shareholders at the time. Celtic was DDs own pet project away from his mates.)
PL put together a real Sweetheart deal ( perpetual dividends at minimum £500k a year) Was a great idea. The Irony being, against Fergus McCanns stated wishes, Celtic reverted back to the same structure as under the Whytes and the Kellys.
Controlled by a single shareholding person / family. It’s been a real Cosy Old Bhoys Network Cash Cow ever since. A closed shop for mates and those in the clique. PL has trousered millions.
McKay is his old Bellarmine school chum. It’s been said, under DD, Celtic is Grace Brothers, Celtic is absolutely an Analogue Club in a Digital World. Still stuck in a bygone age with a Despot Dictator ruling the roost absolutely.