The capital loss is rapidly worsening.
Only 14 days ago, we posted a summary of the financials to date and stated that the Celtic Club financials showed that the Club’s capital had now fallen to $18.6 million. In other words, since 2015, the Club had lost $9.2 million. It’s really hard to keep up with the figures as the decline has been so rapid. No sooner had we absorbed the news about that massive, unexplained loss than the September Newsletter has a little section headed ‘Financial Turnaround.’ This is unsigned, so we don’t know whether it’s written by the new Treasurer, the new Accountants or Brian Shanahan.
Apparently the ‘Accounts’ handed out at the Information Meeting of 21.7.2019 were completely wrong. The Club was not making an operating loss of $647,000 at all, no it’s ‘only’ going to be an operating loss of $162,000. The financial year ended months ago, so any improvement in the figures is going to be due to moving numbers from one category to another, and $162,000 is still a big operating loss! But notice the last sentence here: “All this has to be seen in the context of the Club’s very significant cash reserves of approximately $17 million, and freedom from debt.”
It’s good when people label things nice and clearly so that you don’t get all confused with those big figures and think that the Club is sinking even deeper into the mire! In addition to a large operating loss, another million dollars of capital has simply disappeared!
But it gets worse still.
Up to this point, all those consulted on the topic of ‘where has the money gone?’, had generously assumed that the missing $9.2 million (we now know it’s the missing $10.2 million) must have included between $2 and $3 million for the Capital Gains Tax on selling the property.
Brian didn’t mention the Capital Gains Tax when he was spruiking the idea of selling the premises did he? No. Strange that, but nevertheless it’s due. According to the Letter from the President 11/09/2019, when the Committee reviewed the “then Accountant’s recommendation of a Capital Gains Tax payment of $3 million”, they somehow decided that that they only needed to pay $2.5 million in CGT. There’s no explanation of how this decision was reached, just the spin that they’ve saved $500,000!
Unfortunately, there is another way to look at this. That’s another $2.5 million capital lost. In other words the Club has now lost:
$10.2 million + $2.5 million (CGT) = $12.7 million (total).
since 2015. In other words, since we last posted about the Club’s financial position on 2 September 2019, according to the President, there have been additional losses of $3.5 million. That is $3.5 million gone in just over a fortnight. So if we accept the President’s previous assertions that he still had $17 million this month, once he’s paid the CGT, he will only have $14.5 million of the capital from the sale left. Seriously, is that going to be enough to refit a new premises in the CBD? Assuming that there are no more massive and mysterious losses.
Where is all this money going? The Committee is refusing access to the Minutes even to Life Members and respected members of the legal profession so no one has the faintest idea what they’re spending the money on.
The rate of loss appears to be accelerating now that the Guardian is no longer there to act as some kind of a brake on the spending.
The Guardian? What ? Who was that? See the next article out shortly.