EFL verdict is accepted as sanction is awaited
DERBY County “accepts but is disappointed” after the EFL won their appeal against a decision to clear the club of financial rule breaches.
The EFL charged the Rams in January last year but, in August, an independent disciplinary commission cleared the club of any wrongdoing.
The following month, September 2020, the EFL announced they would appeal the dismissal of a second charge over how the Rams measured the value of players over the length of a contract. The appeal was specific to the club’s policy on “amortisation of intangible assets”.
The EFL have won the appeal but what punishment is issued to Derby remains to be seen. The EFL say they will press for a decision “as soon as reasonably possible”.
In a statement, they said the appeal panel had agreed with the EFL’S assessment that the Rams’ methods were: “contrary to standard accounting rules”.
“More specifically, the panel determined that the club’s policy was not in accordance with accounting standard FRS102 because it failed to accurately reflect the manner in which the club takes the benefit of player registrations over the lifetime of a player’s contract,” it read.
“The club and EFL will now have the opportunity to make submissions on the appropriate sanction arising out of those breaches.
“Despite media speculation, there is no definitive timescale for a determination on sanction, though the League will press for a decision as soon as reasonably possible and will provide a further update at the appropriate time.”
Derby have issued a statement of their own in reaction.
“The League Arbitration Panel (LAP) has granted a limited aspect of the EFL’S appeal against the decision of the Disciplinary Commission (DC) in August 2020 in relation to the EFL’S second charge against the club relating to the club’s amortisation policy.
“No appeal was brought against the DC’S dismissal of the first charge relating to the stadium sale.
“The LAP found for the EFL on the sole ground that the commission made an error in law “in rejecting the evidence of Professor Pope that it was impermissible in principle under the cost model for the club to take into account possible resale values of players” in relation to the accounts for the 2015-16, 2016-17 and 2017-18 seasons.
“The LAP rejected the EFL’S other two grounds of appeal.
“The DC heard the original case over a week of evidence in 2020 including from two eminent QCS and an expert accountant appointed by the EFL. It was found by the LAP to have produced an “enormously impressive and diligent” decision.
“It had found that the club had acted honestly and its accounting policy substantively conformed with accounting standards. The LAP, which consisted of three very eminent lawyers but no expert accountant, found that on one ground this was not so.
“At the appeal, the EFL accepted the DC’S factual findings at paragraph 54 of its decision: the club’s witnesses were found to have given truthful evidence about the amortisation policy and their judgments were made in light of carefully researched and objectively justifiable information. The LAP did not interfere with that important finding.
“The reason the EFL’S appeal took so long to determine was because of three separate preliminary issues raised by Middlesbrough FC and then the EFL, each of which required hearings and decisions by the LAP and each of which was dismissed, with the club being successful.
“Had Middlesbrough and the EFL not brought those preliminary issues, the appeal could have been determined in 2020.
“The club accepts but is disappointed with the LAP’S conclusion on the one ground that the EFL succeeded on.
“The club and the EFL have agreed that the matter shall now be remitted back to the original DC who can determine what, if any, consequences arise from the partial success of the EFL’S amortisation charge and the club is therefore currently unable to comment further.”