The League Two club is behind with the rent with the current owner urging the police to investigate the ‘financial conduct’ of the previous owners

It is not one of football’s easiest or most gladdening tasks to sift for solid facts in the current pile of unhappiness at Oldham Athletic, which is shaping into becoming one of the EFL’s crisis clubs.

The owner since January 2018, the Dubai-based former players’ agent Abdallah Lemsagam, suffered a rapid relegation in his first season, has been through a trail of managers including, for one month, Paul Scholes, and is said to have spent £5.8m for little more in return than a League Two struggle.

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Lemsagam then reached back into arrangements put in place long before he took over, suddenly announcing on the club’s website last month that “it has been found necessary” to make a complaint to the police, about the “financial conduct” of the previous owners. “The allegations are mainly against those who had dealings with Oldham Council when grant money was allocated to the club towards the building of the North Stand,” the statement said.

Since Lemsagam’s complaint Greater Manchester police has responded by saying it is not yet investigating any alleged wrongdoing: “GMP continues to review the nature of the allegations by Oldham Athletic Football Club, to establish whether an investigation is necessary,” the force said in its most recent statement.

These conversations between police and club will no doubt be quite involved, as Lemsagam is going back over the complicated series of deals that financed the North Stand up to six years before he took over. To muddle the issues further, the stand, built to incorporate banqueting and other money-making facilities previously lacking at Boundary Park, was closed on safety grounds following the 1-1 draw with Carlisle on 18 January. So the stand, which was intended to herald a successful and sustainable future for Oldham, stands empty on matchdays, a looming reminder of current troubles.

One of the previous owners, Simon Blitz, an entrepreneur based in the US, emphatically rejects any allegations of wrongdoing arising from that series of deals and he was sufficiently confident of that position to attend a fans’ forum last month and answer questions publicly. He has recently become more assertive, responding to Lemsagam’s police complaint and suggestions of legal action by saying that the club is behind with the rent, owing £200,000, and a loan, £330,000, with further rent and interest adding up at £10,000 and £5,000 per month.

The club accepts it has not paid the rent – although Lemsagam argues the amount owing is less than that – so in the swirl of allegations and arguments about their history, that is a firm reality. Blitz’s lawyer, Jonathon Crook, has made it clear that under the loan Blitz has the right to appoint an administrator, so that is a genuine danger to the club. Crook, however, said Blitz regards administration, which would incur a 12-point deduction and risk Oldham being relegated from the EFL, as “a measure of last resort” and he hopes all will be resolved.

Understanding the old deals, which were consigned to filing cabinets almost eight years ago, is time-consuming work that does raise some apparent questions, to which Blitz says there are clear answers. He and two co-investors, Simon Corney and Danny Gazal, bought Oldham in 2004 from a financial crisis that had plunged the club into administration and their plans from the beginning included commercial and property developments.

Facebook Twitter Pinterest Owner Abdallah Lemsagam welcomes Paul Scholes to the club in February 2019. Scholes left after just seven games in charge. Photograph: NurPhoto/NurPhoto via Getty Images

Lemsagam is arguing he cannot make sense of why, in May 2012, the council paid the club £3.38m for a site in nearby Failsworth, called the Lancaster Club, but Oldham did not retain that money. Instead it paid the £3.38m immediately to a company owned by Blitz. On the same day Oldham council made an additional payment to the club for the Lancaster Club site, of £1.2m, specifically to develop the North Stand. The council made the £700,000 grant the previous year, also to build the stand, requiring the club to maintain community programmes and other social benefits.

In 2016, when the stand was built following these three deals totalling approximately £5.2m, Oldham agreed to surrender to Blitz’s company, Brass Bank, the club’s rights to all revenues from the new banqueting and other facilities. The club retained only the right to sell match tickets and some sales outlets and a deal was done for corporate boxes on matchdays. In return Blitz wrote off a debt the club was stated to owe his company, of £3.8m plus VAT.

Lemsagam is asking why the £3.38m the council paid the club for the Lancaster club site was then passed to Blitz and why Blitz then only loaned a similar sum back to the club to build the stand and took ownership of the commercial rights. Lemsagam told the Guardian that, when he found out about this, he initiated lawyers and forensic accountants to look into it and they have “managed to find very few answers”.

Blitz, though, says the answers are long-established. His lawyer, Crook, explains that the council did indeed buy the Lancaster Club site from the club. He said the site was owned by Blitz but the council wanted the purchase that way, directly from the club. So it was done as a “back to back” sale, whereby Blitz sold the site to the club, which immediately sold it on to the council and paid the proceeds to Blitz’s company. That was publicly documented; the Land Registry records the two sales of the site on the same day, 25 May 2012: from Blitz’s company to the club, then the club to the council.

A spokesman for Oldham borough council said the council’s dealings with Oldham Athletic “have been transparent and well documented” but declined to explain why the Lancaster Club deal had been done in that way.

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Blitz’s position is that he had bought the site originally because the council proposed it for a new stadium, but the council was then unable to develop adjoining land, so they agreed to buy it back from him.

The sale of that land was not directly related to building the North Stand, he says. Separately, to finance that, he lent the club £3.8m. Over his years of ownership Blitz says he put in around £14m, points to the reduced rent on Boundary Park and says the North Stand deal is good for the club as he wrote off the £3.8m owed.

Lemsagam says his investigation is continuing and legal action being considered. Blitz’s lawyer said: “The suggestion of criminal conduct is categorically denied, and we have had no contact from the police. The club’s allegation that it has grounds for bringing legal claims is also denied; the position is that there are substantial sums owed by the Club to Brass Bank, which it is refusing to pay.”

All of which makes the Oldham wonder years, Joe Royle’s managerial feats that led in 1992 to the club happily becoming a founder member of the Premier League breakaway elite, feel like a very long time ago.