Cardiff City Supporters' Trust have issued details of a behind the scenes meeting they were involved in as the club hierarchy gave an update on the ongoing Emiliano Sala situation.
The Trust's respected chairman Keith Morgan, a Bluebirds fanatic for many years and himself a finance expert, was part of a delegation of fans who spoke to Cardiff's powers-that-be ahead of the disappointing 1-1 draw with Blackpool at the weekend.
Cardiff chairman Mehmet Dalman explained to the group that the club were under a transfer embargo as a result of not paying the first instalment of the Sala transfer fee Nantes are requesting.
This information was then relayed by the club to the Welsh media. The Bluebirds are continuing to pursue legal action and first want those avenues fully exhausted before parting with any money.
The matter is a highly complicated one, which goes way beyond just football rules. Mr Morgan confirmed in a statement to Trust members: "Fans present were generally supportive of the club's stance in continuing with various legal matters which are complex and involving many matters."
Of the transfer embargo, the Trust chair writes: "CCFC have reiterated that they have no current intention of paying that money until all ongoing matters are resolved.
"Mehmet Dalman expressed his opinion that the matter will be resolved in the near future but could not promise that this would occur before the end of the January 2023 transfer window."
The next step for Cardiff is a legal appeal against a football decision made by the Court of Arbitration for Sport in Switzerland which decreed Sala was their player, not Nantes'. Cardiff wish to reserve the right to claim for damages and have asked the Swiss Federal Tribunal, the highest court in the land, to look at the CAS decision.
Mr Morgan writes to fellow Trust members: "Despite social media claims to the contrary, the Swiss Federal Tribunal (SFT) have not rejected a club claim to them to have the CAS decision reversed or otherwise amended. Preparations for a hearing , which is likely to take place in January or February 2023, are ongoing but the details have to be kept entirely confidential under SFT rules so no further information could be given to the meeting.
"The SFT will only consider an appeal of a CAS decision if it can be shown that there was a fundamental legal mistake, error or omission in reaching their decision. They cannot overturn the football decision that the Sala transfer was complete and that the transfer fee is payable, but may rule that any payment is deferred until a successful counter claim for financial loss arising from the sad demise of Emiliano Sala is settled."
Cardiff are also taking High Court action against Miller Insurances LLP, saying the broker failed to properly communicate the process for immediately insuring new players.
Of this, Mr Morgan says: "Again, legal confidentiality prevented a great deal of detail on this, but it would appear that the club's regular policy of signing players then insuring them shortly thereafter has not been queried beforehand by those brokers or insurers. For previous transfers this ended up being irrelevant but in the Sala case his sad death occurred between what FIFA and CAS have ruled was the date of completion of his transfer and the relevant insurance being finalised.
"A claim could not be made against the insurers beforehand as the club remained adamant that the player`s transfer had not been completed and that there was therefore no “asset” to insure. The CAS ruling has changed that."
Mr Morgan also moved to deal with claims Cardiff previously stated they had set aside the money for the Sala transfer.
He wrote: "Other social media claims include one that the club has set aside the cash to pay the full Sala transfer fee and related costs. This was specifically denied by the Chair and clarified (as has been done before on social media by others) by Phillip Jenkins."
Jenkins is the club's finance chief and who was also in attendance at the meeting with supporters.
Morgan, himself an expert on football finance, continued: "Since the May 2019 accounts a provision has been made in the club`s audited accounts for a payment in full of the transfer fee. This has nothing to do with a cash reserve to pay it (which does not exist).
"If eventually it has to be paid, it is prudent to provide for it and ensure a continuing compliance with EFL Profitability and Sustainability Rules (the club remains compliant even after that provision).
"If it has to be paid then it will not have an adverse impact on the club`s compliance. If it doesn`t have to be paid then the club`s balance sheet position will improve by over £20m."
Cardiff are taking a bit of a kicking on social media over the transfer embargo, but there are also lots of supporters who believe they are doing the right thing in fighting this highly complex matter and who are firmly backing them over their stance.
The club feel that even without extra January signings, the squad is more than good enough to secure a comfortable mid-table finish.
Boss Mark Hudson can pick a first XI as follows: Ryan Allsop; Mahlon Romeo, Perry Ng, Cedric Kipre, Calllum O'Dowda; Ryan Wintle, Joe Ralls; Callum Robinson, Rubin Colwill, Jadon Philogene, Kion Etete.
That would still leave back up from the likes of Sheji Ojo, Mark Harris, Romaine Sawyers, Isaak Davies, Andy Rhiomhota, Niels Nkounkou, Gavin Whyte, Curtis Nelson, Jack Simpson and Joel Bagan, among others.
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