Blackpool FC chairman Valeri Belokon has told how he suspected funds were ‘misused’ when a hotel was built at the club’s stadium.
The Latvian faced questions in the High Court over claims he is entitled to half the hotel’s revenue – despite no formal agreement being in place.
His firm insists it is owed millions by Segesta Ltd, the football club’s parent company, which is owned by the Oyston family, as a return on the investment he made in 2008 prior to the club’s promotion to the Premier League.
Addressing the Civil Justice Centre, in Manchester, through an interpreter, Mr Belokon was grilled on his claim to 50 per cent of the revenue from the Blackpool Football Club hotel, in the South Stand at Bloomfield Road.
Mr Belokon, who maintained there was a ‘gentleman’s agreement’ in place to invest in the redevelopment of Bloomfield Road in return for a greater stake in the club, expressed concerns over how the hotel was funded.
However, when pressed by Alan Steinfeld QC, representing Segesta, Mr Belokon said there had been no specific agreement with regard to the income from the hotel.
He said: “The question was about the 50 per cent of all revenue according to the agreement. It’s my understanding that if we reached an agreement on the hotel we would have been entitled to 50 per cent. I cannot insist on that because there is no agreement in place.
“When that agreement is signed we will be entitled. There is no agreement on the hotel.”
Mr Belokon told the court his company had not signed a deal on that phase of the redevelopment,
He added: “I did understand the construction of the hotel was impossible without funding.
“It was my understanding that Segesta funded the construction of the hotel with help from a loan they took from Blackpool Football Club.
“I wanted to be clear about the investment in general. I needed to know about the money invested in the hotel because I had an assumption, a doubt, that the funds had been misused.”
He denied signing a specific agreement to build a hotel, the third phase of the redevelopment of the South Stand and South West corner.
He said several projects had been mentioned for the space underneath the stand, including a hotel and casino.
When quizzed on predicted hotel incomes, which the court heard he had been sent, the Latvian banker said he had seen figures but did not regard the document, which he described as two pieces of paper, as ‘proper calculations’ and the basis for a multi-million pound investment.
Mr Belokon conceded that possible options had been discussed in 2007 but he said he did not believe it would result in construction going ahead.
Mr Belokon also faced questions over a 2010 meeting with club chairman Karl Oyston. The court heard the pair met at London’s Claridge’s hotel and discussed using a loan from the club to complete the stadium’s South stand.
Mr Steinfeld’s suggestion that Mr Belokon had raised no objection during the meeting was denied by the Latvian.
The court heard Mr Belokon had not asked for an email sent by Mr Oyston, which made no mention of any such objection, to be corrected.
When it was suggested Mr Belokon was happy for the construction to go ahead, he replied: “I was not happy with the security on the loan. I did not agree to that loan.”
The court also heard how former Pool director Normunds Malnaks had relayed information from a shareholders meeting regarding the finance plans for the South Stand fit out.
Mr Steinfeld said: “There is not a piece of evidence to show you registered your objection.”