Hearts must open the curtains at Tynecastle

Vladimir Romanov has been sheltering too much over a �6.8 million 'floating charge'. Picture: SNS
Vladimir Romanov has been sheltering too much over a �6.8 million 'floating charge'. Picture: SNS
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OVER the past eight years, as Hearts’ debt hovered between £15-25million, defenders of Vladimir Romanov had a constant refrain. It’s all right, they said. We basically just owe money to ourselves.

That argument may not have shown a detailed grasp of the finer points of the international banking system, but, in the circumstances, at the time, it had a certain truth to it. If Branch A of a company is losing, let us say, £1m a year, that does not matter as long as two other things are happening: Branch B is earning more than £1m, and the parent company is happy to subsidise one branch with the profits from the other.

In the case of Hearts, as long as Romanov was thriving, the losses could go on. So much money was wasted, so chaotically, but it was the Kaunas-based businessman’s cash to do with as he pleased.

Things have changed now. For the first time, the football club owes a significant amount to a company which is not part of the Romanov group. The precise implications are not yet entirely clear, but the potential threat is all too apparent.

The sum in question is the £6.8m “floating charge” over Tynecastle which, according to records held by Companies House, was transferred from Ubig to Ukio Bankas in December. It’s basically a debt: money which could be called in.

There was no problem when Ubig, Hearts’ parent company, had it. Or when it was passed to Ukio, the club’s former shirt sponsors. One branch of the Romanov group had passed it to another branch.

But that changed when Ukio went into administration. Now, its debts and holdings have gone to Siauliu Bankas – a business which has no reason to feel so charitably inclined towards Hearts.

We should stress that Ukio and Ubig are separate entities, albeit related through the shares which Romanov holds in each. Ubig continues to trade normally, and Hearts are not dependent on Ukio for cash injections.

Even so, it would be reasonable to expect a little more urgency in the statements that have emerged from Tynecastle since Ukio went into administration. All we have heard so far is the odd bland word of reassurance on some fronts, and a refusal or inability to answer on others.

Hearts director Sergejus Fedotovas has worked for Romanov since before the latter bought into the club, and is better placed than anyone else to offer a clear picture of what is going on at Tynecastle and within Ubig. Given that he is supposedly working hard to prepare Hearts for sale, it would be reasonable to expect Fedotovas to be as clear as possible about the club’s finances. Instead, as much remains unanswered as ever.

It’s a curious situation, akin to putting your house up for sale, then drawing the curtains and refusing to let anyone have a look inside. If you want to keep on living in your present abode, fair enough, have as much privacy as you desire. But, if you want to sell it, minimising the information about it is bafflingly counter-productive.

So far, all that has come out of the club about the floating charge is a statement from a spokesperson to the effect that any new owners cannot simply demand the £6.8m. They could only do that if Hearts were to renege on any scheduled payments to them – something that Hearts have not done.

That is true enough as far as it goes, but we should not think that the matter ends there. If the new owners of the floating charge decide they want to cash in on it, do you think they would be deterred if Hearts said “Sorry, that’s not a scheduled payment”?

No. All they would do would be to open talks on how exactly payments should be scheduled – and the more intransigent Fedotovas and colleagues were in negotiations, the less inclined to leniency the other party would be.

It has been widely reported that the £6.8m was transferred from Ubig to Ukio in a bid to save the latter from administration – despite, of course, the fact that the two companies are separate entities. Hearts have so far refused to confirm or deny those reports, and have yet to offer any alternative explanation for such a large sum changing hands.

And they have been equally unforthcoming about their talks with parties either interested in taking over the club directly, such as the Foundation of Hearts group, or interested in assisting a takeover, such as Paul Goodwin, the head of Supporters Direct Scotland. Some aspects of negotiations in such matters have to remain private while talks go on, but again, if the board of directors at Tynecastle were genuinely interested in transferring real power in the club to the supporters, they would have been a lot more forthcoming by now.

Romanov has been particularly loath to deal with the Foundation, in part because of a personality clash with one of its leading members. Goodwin has at least been asked to discuss various models for supporters’ takeovers, but to date the emphasis from Hearts has been on finding a solution which can be presented as Romanov’s legacy.

That sounds well intentioned enough, and certainly it is better for any owner to leave a positive legacy for a football club, rather than leaving nothing other than a mountain of debt and a state of disarray on and off the pitch. But the time has surely come for everyone concerned, both those who currently work at Hearts and those who want to have a say in running the club, to recognise that there is no point in negotiating a future that can be presented to Romanov as helping him save face. This, after all, is the man who recently declared he has lost £250m so may have to go back to his old job as a taxi driver. Given he is in that state, he really does not have much face left to salvage.

The future for Hearts is one without Ubig, and without Romanov, and the man himself should have no say in what that future looks like. Fedotovas should show he recognises that, by beginning to negotiate with maximum sincerity and clarity.