Ken Bates Faces Goverment Inquiry over Leeds United Takeover

Ken Bates will face a parliamentary demand for a government inquiry on Tuesday in order to disclose every detail of the transactions that led to his taking over Leeds United.

The former Chelsea owner has been chairman of the Championship club since 2005 – barring a short period during the club's 2007 administration – during which time he served two separate consortiums of anonymous offshore owners. The obfuscated ownership structure finally came to an end last month, when Bates took over 73% of the club in a transaction whose cost has not been disclosed. But the lack of transparency remains a major concern of the ongoing parliamentary inquiry into football governance.

Now Damian Collins, the Conservative MP who sits on the football governance inquiry, has set up an adjournment debate at Westminster Hall next Tuesday. "The principle is that it should never be allowed to happen again that football clubs are bought by offshore trusts of which we have no idea who the owners are," said Collins. "Even though Ken Bates has now taken the club over, I do not think we should forget that. There remain a lot of unanswered questions about the whole process which warrant a full investigation."

When Leeds collapsed under the weight of £35m in debt in 2007 its anonymous offshore creditors refused bids that would have earned them £8m more, simply because they wanted Bates to retain control as chairman. That insolvency process also led to HM Revenue & Customs receiving only a fraction of the £7.7m it was owed in unpaid taxes.

Collins added: "I think we should investigate how Leeds was bought by Ken Bates and whether there are issues for the government to look into, given the millions of pounds of unpaid tax in the administration. We should also consider whether there is a need for the government to look into how the money was raised to buy the club, and where it came from."