The Hindu : Sport / Football : Thailand on the verge of completing Liverpool deal

Online edition of India's National Newspaper
Thursday, May 27, 2004

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Sport - Football

Thailand on the verge of completing Liverpool deal

BANGKOK, MAY 26. Liverpool soccer club has reached an agreement "on all aspects" of an unusual deal to sell a 30 percent stake to Thailand, including giving it two seats on the team's board, a Thai negotiator said on Wednesday.

Only "due diligence" needs to be completed by both sides to seal the deal, Deputy Commerce Minister Pongsak Raktapongpaisarn told reporters after returning from meetings in England with representatives of Liverpool, one of the best known English Premier League teams.

Due diligence, which Pongsak said would take four to eight weeks, means verifying the financial and legal status of the company being purchased.

"We can say that the chance to buy is more than 90 percent," Pongsak said. A memorandum of understanding — which is one step short of the final deal — would be signed in July before the new Premier League season begins in August, he said.

"We have reached agreement in principle on all aspects," Pongsak said. "At this moment we only await completion of the due diligence process."

The novel deal — perhaps the first time in the sport's history that a government is involved in purchasing stakes — is the brainchild of Prime Minister Thaksin Shinawatra, a billionaire tycoon-turned-politician, who had long nurtured an ambition to acquire an English Premier League team.

The deal would put Thailand on par with the family of David Moores, currently the biggest shareholder with a 51 percent share. After the deal, both will have almost equal stakes.

Thailand has offered $115 million to buy the 30 percent stake. The Reds, with an English record 18 titles, haven't lifted the league trophy since 1990 and sorely need the cash to buy new players and build a bigger stadium.

As part of the deal, Pongsak said, Thailand will get two seats on the team's 12-member executive board, which had earlier wanted to concede only one seat to the Thais.

The other members on the board include Moores, chief executive Rick Parry, and the team manager — a seat now vacant following the dismissal of Frenchman Gerard Houllier on Monday.

Pongsak said Thailand does not want to interfere in the team's decision on who should replace Houllier.

Under the deal, the business plans for the entire year and its expenses, including the purchase of new players and building a stadium, would be jointly approved.

Thailand is also pushing for Liverpool to be listed on the London stock exchange. "But we will talk about that later," Pongsak said.

The negotiations were aided by Boonklee Plungsiri, the executive chairman of Shin Corp., the business conglomerate founded by Thaksin that includes satellites, mobile phones, internet, property, entertainment and television.

Thaksin had originally indicated that he would buy the Liverpool stake with his own money. But the government later said it would be owned by a new company to be set up under the government's Sports Authority of Thailand.

Instead of using government money, the company would fund the purchase through a special 10 billion baht ($250 million) state lottery.

However, according to Thai laws, offshore direct investment of more than $10 million needs to be approved by the central bank, the Bank of Thailand.

Its governor, Pridiyathorn Devakula, said he is currently assessing the deal to decide on the merits of the investment.

"We have to see the objective of the investment and use our judgment on a case-by-case basis," Pridiyathorn said.

The Liverpool purchase has triggered harsh criticism of Thaksin, with opponents saying it will neither bring economic benefits nor promote soccer in Thailand, even though a local academy would be set up under the terms of the proposed deal.

In England, some have questioned whether Thaksin, criticised for human rights abuses, should acquire a piece of the team. Over 2,200 people died — many allegedly at the hands of police — last year when Thaksin launched an assault on illegal drugs. — AP

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