It has been the modern fate of Leeds United fans to endure crises on the flipside of the Premier League miracle ever since their former chairman, Peter Ridsdale, announced the club's 2002 financial collapse with the landmark admission: "We lived the dream."

The nightmare appeared to have calmed under the somewhat unlikely ownership of the Bahrain-based investment bankers Gulf Finance House, who bought the club from Ken Bates in 2012, appointed Brian McDermott as manager and nursed crowds back up to 30,000. Yet now the club has crumpled again, after a hideous weekend and the on-off sacking of McDermott by a lawyer, Chris Farnell, apparently acting for Massimo Cellino, the owner of the Serie A club Cagliari, who has a fraud-related conviction and still has no signed agreement to take over Leeds.

Now, if GFH maintain its intention to sell the club to Cellino, Leeds fans could find themselves the extreme test case for the rules governing who is "fit and proper" to own an English football club.



It may well shock them to learn that a man with Cellino's criminal record, with further possible proceedings hanging over him after his reported arrest last year on suspicion of embezzlement – his Italian lawyer, Giovanni Cocco, said he denies any wrongdoing – looks like he would pass the Football League's "owners and directors test", formerly the "fit and proper persons test", were he to seal the deal with GFH.

The rules, introduced by the Football League in 2004, then by the Premier League after years of resisting and claiming they would be unworkable, were designed precisely to stop fraudsters taking over clubs, beloved sporting institutions to which fans pledge loyalty for life.

Yet neither the rules of the Football League nor the Premier League exclude people whose record appears to make it screamingly clear to many supporters that, in common sense terms, they cannot be "fit and proper".

Instead, wary of being challenged in court, the leagues drafted rules which stick tightly to a set of specific criteria, which prospective owners of historic clubs either pass or fail. There is no catch-all category that would keep away people whose conduct might bring the game into disrepute, like apparently sacking a manager before they even have control of a club, or trail past convictions behind them.

Extraordinarily, there is not even a measure that prevents people taking over a club if they are under investigation or facing charges for an alleged criminal offence of dishonesty. In the case of Cellino, who was arrested in Italy last year as part of an ongoing investigation into the alleged misuse of public funds, he would be regarded by the Football League as innocent until the case is concluded.

His past convictions, for fraud in 1996 – Cocco said his fine and conviction were expunged on appeal – and a 15-month suspended sentence in 2001 for false accounting at Cagliari, make it most likely Cellino would pass the "owners and directors test" and be considered "fit and proper" to take over Leeds United.

The Football and Premier Leagues' rules do not bar from ownership, or the boards of clubs, a person who has convictions for fraud. Instead, mindful of fair play for reformed characters as recognised by British law, the Football League rules disqualify people only if: "They have unspent [our italics] convictions for offences of dishonesty, corruption, perverting the course of justice, serious breaches of the Companies Act or conspiracy to commit any of those offences."

The question of whether a conviction is "spent" is determined by the Rehabilitation of Offenders Act 1974. Its aim is to allow people's reputations and life chances not to be forever burdened by a crime committed years earlier, and sets out specific lengths of time after which a criminal conviction is "spent", and people can be considered rehabilitated.

According to the solicitor Joy Merriam, who represents criminal specialist lawyers on the Law Society's council, the act applies also to convictions in other countries, so cover Cellino's record in Italy. Some convictions, including ones which resulted in a prison sentence of over 30 months, are excluded from the act and so are never "spent". However, section five of the act sets out that a conviction which resulted in a prison sentence of longer than six months but less than 30 – regardless of whether it was suspended, Merriam said – is "spent" after 10 years.

So Cellino's convictions in Italy, which date from 1996 and 2001, approaching 18 and 13 years ago, would be considered "spent" in English law, Merriam said. "If the facts are as reported," Merriam said, "he would appear to be able to rely on the Rehabilitation of Offenders Act, and the convictions are spent."

Merriam said she found it "surprising" that the leagues do not include a "catch-all" in their rules which would allow them to bar a person from taking over a club if they believed he would not be good for a club or the wider game: "It is fairly standard for professional organisations to include a requirement that a person would not be accepted if he is likely to bring the organisation or industry into disrepute," she said.

The football authorities have always resisted that, rejecting it continually as a matter of opinion, which they would not be able to justify objectively, and so open to challenge. It means both leagues have a tight set of rules which appear to allow a person with Cellino's record to take over one of the biggest clubs in the country, whose large and passionate support has been on heartfelt display in recent days.

Several stages remain before that could happen. GFH, rocked by Leeds fans' vehement opposition, have clarified that they have not yet signed a deal with Cellino. However, they do have an agreement in principle to sell the club to him, after long negotiations with Andrew Flowers, the owner of Enterprise Insurance, partnered with GFH's own David Haigh, collapsed – according to Haigh because the money they required was not there.

GFH's priority is to make some money, having spent £20m in barely a year just to maintain McDermott with a squad decent enough for upper mid-table in the Championship. Sources close to the negotiations explain that following a constant search for other investors, including Leeds and Yorkshire business people, with months spent entertaining Flowers, Cellino was the only potential buyer to arrive, quickly, with the money ready.

McDermott, who calmly outlined in his press conference the humiliating telephone sacking then reinstatement by GFH, reflected: "This club doesn't belong to anybody but the fans."

That is true of football clubs in supporters' hearts but mostly, in English football, not in reality. Nor is the quality of ownership as protected, or "fit and proper", as many fans would wish. Additional reporting by Lizzy Davies in Rome