Deal was agreed to sell Hartlepool United for just £5 before take-over fell through

Peter Harris and Stephen Murrall.
Peter Harris and Stephen Murrall.

Businessmen were set to buy Hartlepool United for just £5 before the deal fell through, a court has heard.

Businessmen Stephen Murrall and Peter Harris are standing trial charged with fraud after the failed take-over bid.

Victoria Park

Victoria Park

Giving evidence, Murrall said he had met former chief executive Russ Green at a hotel in Leicester, and it was agreed the club would be sold by its owners IOR Ltd for £5, with its debts being wiped off by IOR.

The agreement was “£5 and we’re out of here”, the court heard.

During the hearing at Warwick Crown Court, Murrall denied acting dishonestly when he got the gate receipts diverted to his own company before the take-over was finalised.

Murrall told a jury he believed he would be able to pay back a £50,000 loan he is alleged to have fraudulently obtained to replace Pools' gate cash.

Russ Green, former Pools chief executive.

Russ Green, former Pools chief executive.

At the time, he and Peter Harris were trying to convince the Football League they were ‘fit and proper persons’ to run the then-struggling League Two club, Warwick Crown Court has heard.

The two men have pleaded not guilty to fraud by making false representations in January 2015 that they needed funds to satisfy the Football League before they could get approval to buy the club, and that they had access to a further £200,000.

Murrall, 49, of Mill Court, Shipston-on-Stour, Warwickshire, and Harris, 47, of Compton Court, Shipston-on-Stour, deny two more fraud charges, and Murrall also denies two charges of making false statements with intent to defraud HM Revenue and Customs.

Prosecutor Miranda Moore QC said the two men had set up a company called TMH 2014 Ltd for the takeover.

Former club chairman Ken Hodcroft with former chief executive Russ Green.

Former club chairman Ken Hodcroft with former chief executive Russ Green.

In December 2014 an agreement was signed with the then Hartlepool United chief executive Russ Green for TMH to buy the club – subject to the Football League accepting they were ‘fit and proper persons’ to run it.

They had to meet certain conditions by January 31, 2015, before they could become the official owners.

But, without waiting for that, the club’s finance officer was directed to pay all future money from home matches, including gate receipts and the bar revenue into TMH’s bank account.

A total of £42,453 from the next two home games was paid into the TMH account - but it did not stay there, and League chiefs wanted to know the two men were good for the money.

Bogus documents were said to have been produced in a bid to convince the club and the League it had the money.

In a bid to pay it back, Murrall borrowed £50,000 on a short-term loan from the ESRG Group, which had already loaned him £500,000 for a project in Malta, which is the subject of another of the fraud charges. But it was never repaid.

Murrall, who had told the jury of his various business enterprises, and of being general manager at Swindon Town FC for a period in 2013, was asked who else was involved.

He replied: “Peter [Harris], as I didn’t want my name in football. After Swindon, it’s not a particularly nice thing to be.

“To me, it was an opportunity for Peter to be a chairman of a football club, but it does have its down sides. There were some individuals I didn’t want to know I was involved in this.”

His barrister Andrew Baker asked whether he saw any business opportunities with the Hartlepool take-over.

Murrall said: “Fantastic opportunities. Initially there was land available that the council wouldn’t speak to IOR about, a land parcel next to the club that the council were prepared to sell for £100,000, and that would have generated a lot of profit.

“There were other opportunities at the football club itself. There were loads of opportunities.”

Asked who gave the instruction for the gate money to go into an account controlled by him and Harris, he said: “I did.

“The structure of the banking was that IOR had the main account, and the Hartlepool account was also managed by IOR, but no-one had access to utilise it, and money had to be paid, for example if there was an away game, for hotel bills and so on.”

But he said that in the New Year he had a call from IOR’s solicitors to say that the money would have to go back into the club’s account to satisfy the Football League.

So he approached Jonathan Rehbein at ESRG who agreed to make a short-term loan of £50,000 after being assured that TMH had access to a further £200,000.

And Murrall insisted that was true, because, he said, there was around £197,000 in IOR’s Hartlepool account which would have become available once the hand-over had taken place.

“We didn’t know it wasn’t going to happen until the last minute of the last day. There must have been something going on in the background.”

He agreed that to extend the loan period for the £50,000 letters that were ‘clearly forgeries’ were presented purporting to show he had €1m in a Maltese account – but claimed another person had put him under duress to do so.

Another of the alleged frauds involved an earlier loan of £500,000 which had been negotiated with Mr Rehbein for supposed projects on Malta – first involving electric vehicles and then a plant to convert waste into energy.

That loan had been secured thanks to a written agreement and contract purported to have been signed by Malta’s minister for inward investment, Dr Christian Cardona, and a forged letter from accountants Ernst and Young supposedly underwriting the project.

Murrall accepted generating those documents himself and forging Dr Cardona’s signature on the agreement and contract. But Murrall, who spent some of the £500,000 on gambling and to cover bills for a night club he was refurbishing, insisted: “My case is, I didn’t think I behaved dishonestly. I provided what I thought everyone accepted they wanted for their files. I was told: ‘Just provide that and bung a signature on it. It’s for his file, he’s not going to check it.’”

Murrall is also accused of submitting false invoices to reclaim VAT, false invoices to obtain money from a factoring company, and statements and invoices to HMRC in a bid to obtain almost £900,000 in research and development payable tax credit – but denied acting dishonestly in respect of those allegations.

The trial continues.