THE FAI ADMIT they must address a “loophole” in their background checks on LOI club owners with today “critical” as to the continued existence of Dundalk.
Dundalk have debts of more than €1 million, with owner Brian Ainscough, seeking to offload the club he took over in December last year.
Hopes of finding a new owner to maintain the club’s viability took a hit over the weekend, with a group led by American investor Jeffrey Saunders withdrawing their interest. Dundalk must now find a saviour by 5pm today or likely face the worst.
In a statement released on Sunday night, the club said Monday is “critical” to the club’s future and said Ainscough was in discussions with different groups, both domestically and overseas.
Were Dundalk to go into liquidation, it would have a profound effect on the wider Premier Division: were their results to be expunged, Derry City would leapfrog Shelbourne at the top of the league.
Speaking on Saturday at the FAI’s AGM, PFAI general secretary Stephen McGuinness said he believed the club could cease to exist within a couple of weeks, and while he acknowledged the assistance from the FAI’s LOI office across the last couple of weeks, called for the FAI board to hold an independent investigate as to why Dundalk find themselves in this position.
McGuinness has written to the FAI board to state the Association’s owners and directors test “isn’t robust enough”, saying the FAI need to establish a designated unit of their finance department to focus on how clubs’ finances are managed, and said a requirement must be introduced to demand that club owners put at least 50% of players’ salaries into an escrow account to ensure they cannot again go without being paid if the club suffers cash flow problems.
Speaking in response to McGuinness, interim FAI CEO David Courell admitted that the timing of Dundalk’s takeover meant that there was a lesser degree of financial due diligence done on the new owner.
As Courell explained, the FAI completed their licencing process of Dundalk in November 2023, and Ainscough then took over the following month. He also said the FAI’s director tests primarily focuses on “integrity”, which consists of Garda vetting and background checks.
“It’s regretful the situation we find ourselves in, the situation Dundalk find themselves in”, said Courell. “We need to acknowledge that there are lessons to be learned from this process.
“The license was granted for Dundalk FC in November 2023 for this coming year. The club then changed hands in December 2023, meaning the financial checks ahead of the 2024 season were done on Dundalk’s previous owners.
“While there is an owners and director’s test, that primarily focuses on the integrity on the incoming owners.
“We recognise, and we’re not unique in this situation, it’s quite common in leagues across the world, that at that juncture there wouldn’t be the same degree of financial due diligence carried out.
“That is a learning we need to own up to. Right now, our focus and energy is in trying to support Dundalk and ensure it’s viability moving forward.”
Speaking to the media afterwards, the FAI said they would do what they can to ensure Dundalk can finish the season, but would not cover all of their bills to the end of the season.
“Ultimately Dundalk is a private enterprise”, said Courell. “We need to respect that. We are trying in every way that we can to try and support that and through a challenging period but there is limitations on what we can and should do, if that makes sense.”
Courell also admitted the FAI will close the “loophole” by which Ainscough’s December takeover was subject to lesser financial oversight owing to its timing.
“The club changed hands after that in December 2023, as a result the financial checks were done on the previous ownership”, said Courell. “Lessons will be taken away from this process that any future transfer of ownership that loophole will be closed.
“There are a range of other leagues across the contingent that don’t have the same rigour when it comes to the transfer of a club. We will be better.”
The FAI do perform financial oversight throughout the season, with clubs required to send accounts to the Association at three different points over the season, to be validated by the FAI’s finance team.
“Unfortunately in the case of Dundalk FC they were expecting to get additional investment in recent months and that did not happen”, said Courell.
It was pointed out to Courell that the FAI would have performed checks on Ainscough as owner of Kerry FC, whom he owned in November prior to his sudden takeover of Dundalk.
“He would have”, said Courell. “It is part of our new owners checks that he would have to lean on previous files.”
