Karate England “Special General Meeting” Coventry 18th Feb 07 (notes updated 7th March 07)
I attended this meeting not as an association representative, but as an interested party, having both applied for professional positions with KE (of which more later) and as a volunteer contributor to both KE and EKGB before and since.
Upon my arrival Abdu politely informed me that although I was not officially invited, I may remain if I did not speak, or draw attention to myself. Tough as it was for one as opinionated as me, I complied.
At the top table were Abdu Shaher, Bob Poynton, Andy Sherry, and Steve Arneil. Apologies were received from President Vic Charles as he was returning from holiday. The top table was later joined by Ticky Donovan OBE, national team manager. The meeting was informed that Leo Lipinski had tendered his resignation on 16th Feb 07.
Apologies for absence were also heard on behalf of; inter alia, Terry Pottage, Chris Thompson, Leo Lipinski, Paul Campbell and Pauline Bindra.
Bob Poynton welcomed the gathering and invited the meeting to thank Abdu Shaher for his contribution to KE in recent weeks and especially for his efforts in setting up the Redcar office. His calls for appreciation were met with decidedly muted applause. Bob, in his introduction sagely pointed out that if the politicos of old continued in their efforts to drive schisms between karateka, “then we will have failed”.
No clear agenda was presented, and Abdu was at pains to point out that this was not a formal AGM, but an informal opportunity to examine past mistakes and look for future solutions.
The meeting opened with the floor nit picking at KE statements and procedures in an apparent attempt to undermine the current management. Questions were asked about who the Companies House listed directors were (in an obvious attempt to discredit Abdu, Vic and Andy - only Bob Poynton is officially listed). Poynton, and others used the “if it looks like a duck…”
principle to illustrate the fact that in law, if one acts in the role of director, and is accepted as such, in effect the law would accept that position. (Abdu had resigned his directorship to take up the post of Performance Director). John Gilliland from the floor supported this assertion.
A colourful, animated character called Keith LeBihan from BKA pointed out that the statement in the handout sheets (which can be viewed at the CyberBudo website) erroneously claimed the Deloitte & Touche report on the Company’s finances was audited.
He warned that were this statement not corrected, Deloittes may be inclined themselves to sue.
LeBihan it is noted is apparently a big cheese in HM Revenue and Customs.
Throughout this introductory phase, and indeed for the rest of the meeting, Andy Sherry said almost nothing.
Poynton and Shaher repeatedly pointed fingers at the former CEO, Nick Halafihi - recently dismissed for alleged gross misconduct, claiming that his alleged misdemeanours were against the wishes of the Board. They did not respond to the floor’s comments to the effect that the CEO was their employee, and therefore they were responsible; though to his credit Abdu admitted that he had been directly responsible for Halafihi’s appointment, and conceded that in hindsight this
had been a mistake.
John Gilliland asked why, if the Board were made aware of financial irregularities in March 06, nothing was apparently done.
He also asked for details of the creditors comprising the total debt of £279 000.
Abdu replied that a Finance Director, Tim Shaw, was appointed in April 2006, and that his statement to the Board in May 06 indicated “all was ok”. Allegedly Shaw then went to Sport England, without reference to the Board, and warned of problems.
Brian Philcox jumped on the “let’s blame Halafihi” bandwagon and said that the board had been misled by Nick. Brian continued, he (Philcox) had volunteered for redundancy based on Halafihi’s counsel, to save the corporation money, and had been personally significantly out of pocket (and out of work) as a result.
After John Gilliland declared “this would not have been allowed to happen on my watch” (as FD of EKGB) Abdu went on to explain that investigations of finances had been hampered by the changing of passwords allowing access to computer records.
He explained that until these had been cracked, accounts were based on: extant cheque book stubs; World Class Bureau accounts; odd receipts & sundry documents.
Asked for the detail of the £279k creditors, Abdu revealed £20k (sorry your writer did not hear), £39k Temple Publishers (Paul Clifton’s Traditional Karate, Combat etc.), £40k Inland Revenue PAYE; undisclosed sums for office, computer equipment, Pitney Bowes franking machines etc.
Andy Sheridan (Mujushin) asked that the blame and accusations be curtailed in favour of a more forward looking view. Abdu thanked him from the chair and said that the later part of the meeting would be devoted to the future.
Terry Wingrove (CyberBudo) stood and noted 1) “I am not defending anyone” and 2) “I am not calling into question the integrity of English karate as a whole”, before continuing.
He went on to describe the “Whole Sport Plan” (WSP) as a “bureaucratic nightmare” and conceded that to comply with it a number of tricks would have had to be pulled. The Board was in effect constrained by the terms of the WSP because the promise of £5M depended upon meeting its various landmarks and metrics. Sport England was “emphatically competition-centric”, but apparently have now, in some Orwellian trick of double speak, changed the “C for competition” to “C for Community” and claimed it was ever thus!
Terry went further to say the WSP was “impossible to achieve”. He also implied (but did not state explicitly) that he believed the CEO was not competent for the job.
He concluded with the question “should we relinquish the WSP and SE support?” He clearly believed we should as he stated “there is more than one way to skin a chicken"
Aidan Trimble conceded that almost all public and private projects go over budget, and asked whether Sport England should not take some blame for failing to keep the KE management in check.
He wondered whether we have any cause to call SE to account over the spending issue (This writer agrees that SE must take some of the blame).
Terry Wingrove expained that he had met the Minister, Colin Moynahan, and pointed out that both Hockey and Judo are in similar financial difficulties.
John Howell in contrast observed that it seems bizarre that we should criticise SE as they hold the puurse strings and are therefore "the boss". He noted that despite historical differences, TaeKwonDo, for example seems to survive well under the SE/WSP regime.
Keith LeBihan pointed out that he and the BKA had voted against unification in the first instance, as they foresaw the short-lived existence of the unified body. He observed that should any new GB have the same management board that they would in all likelihood be pursued by the creditors (notable amongst whom are of course the Inland Revenue).
Abdu said that 4100 members had been registered since Nov 06. About 50% have not paid, and and the approx £2k has not been banked.
Discussions turned to the legal status oof the membership. It turns out that due to a legal dragging of heels, only one member association has officially been registered with KE. That is the AMA, represented today by Peter Allen & Kevin Hamilton-Stewart, two VPs. Some discussion ensued about AMA's status as "Shareholder or Subscriber", semantics that made little difference
to the substance of the discussion. Either way the AMA is required to sign off the liquidation of KE, and Abdu called upon Peter to endorse this and sign the documents.
Someone called Colin from, I think BSKU said that the problem was essentially one of transparency. Why would members subscribe to a body without understanding and confidence of the management. He asked why we had to be bound by Sport England for funding. He pointed out that karate potentially has other qualities that other Government agencies may support in the
interest of, for example, health and obesity concerns; social cohesion; crime reduction.
Wille Thomas observed that the WSP was an off-the shelf document which lacked karate specificity, and urged members to draw up a more appropriate plan.
John Gilliland noted that if SE had delivered funds, KE would not have been insolvent. He did however also note that in recent months KE itself has not been providing any services to its members.
Shikon's Steve Rowe noted three points:
1) Shikon's disappointment that, although it had voted for unification, KE was in such a poor state so soon after inauguration
2)Who is to blame? Sport England, Nick Halafihi?
3) What is the way forward?
Abdu Shaher again stated that Nick H mismanaged, and did many things without board approval.
John G asked if we could pursue Halafihi for his prepaid expenses and other outstanding funds. AS replied that the liquidator could possibly do this.
Someone called Geoff asked whether, in the event of voluntary liquidation, the existing Directors could sit on the board of any new body. LeBihan replied that if financial impropriety could be proved, then they could not. Sport England could pursue this line, independent of Karate England. Lebhan stated that the individual Associations could not be held liable for any of the GB's debt.
Abdu noted that some £404k of Karate England money came from the World Class Programnme, a fund effectively ring-fenced for and by Sport England. It was not and is not possible for Karate England management to get direct access to this.
Ticky Donovan OBE noted that he is a creditor, to the tune of £20k and pointed out that he had had PAYE deducted from salary.
As the PAYE is now a creditor, could he as an employee be pursued for unpaid tax? The concesus was that he could not.
Mike Burnad asked if there was any legal action pending against Karate England or any of its directors? Apparently 75% of creditors have to agree before a company is wound up.
John Gilliland said that KE can apply for voluntary liquidation. Alternatively any creditor could apply to appoint its own receivers. The inland Revenue could in theory apply to lift the "Veil of Incorporation" that protects the directors of a limited company, and pursue the indiviuaual in certain circumstances. He speculated that the member associations too might be pursued "because thet's where the money lies".
Peter Allen called into question the ability of the board to run a business (with a common, but profane vernacular turn of phrase pertaining to the manufacture of beer). Abdu noted that he had in fact run several sucessful companies.
Peter asked for members' views (a vote) on whether the AMA should accede to the board's wishes and sign the document agreeing to liquidation. Abdu noted that this was not a formal, constituted meeting but an informal gathering of interested parties. The concensus was that legal advice needed to be taken before agreeing to such a decision.
Colin asked for a written statement from the Board outlining the legal position, the liabilities known and potential to the members, and a full and detailed list of creditors.
Terry Wingrove noted that while KE could be left to sort out its liquidation etc, there was nothing to stop a new body from being created.
John Bell, in his capacity as a member of Sport England in the North West described some of the funding and administrative issues surrounding sport and explained how Government Policy affects - and is affected by- sport participation.
Steve Rowe asked John Bell if he could confirm that the original WSP, much criticised in this meeting, had originated from his office. Mr Bell denied this.
Bob Poynton Pointed out that the old Martial Arts Commission (MAC) had been a dictatorship and KE was "not run by karateka". Any new body would have to be dempcratically run, by practicing karate people.
Terry Wingrove then spoke about funding. He posed the question "Do we need Sport England?" He said that Michael Dinsdale would endorse the view that WKF membership was not dependent on SE recognition. He revealed (first posted on this website some months ago) that financial independence was a possibility. He had written (but under NDA) offers of some £1.3M of
commercial sponsorship from "bluechip UK companies" (based on certain conditions, but largely "without strings" in terms of any obligations upon any new GB).
Aiden Trimble asked how UKCC/ CLubmark staus would be affected if karate decided to run independently of Sport England. The meeting appear to bellieve that UKCC and Clubmark recognition was still being formulated and that probably status would be unaffected.
Colin Howell asked for a written statement of Mr Wingrove's sponsorship proposals for consideration by the members. Having misheard part of Terry's proposal, Howell blamed "hot air" from the floor. Terry misunderstood this as a personal attack and promptly walked out, saying he had worked
