The boss of Seymour Pierce, dubbed ‘Mr Football’, was forced to sell his firm after the Financial Services Authority (FSA) blocked a potential lifeline from an Ukrainian entrepreneur.
According to the Sunday Times, just before Christmas the regulator told Keith Harris, who bought Seymour 10 years ago with the support of tycoon John Moulton, that the broker was not permitted to sell a sizeable stake to Ukrainian banker Denis Gorbunenko.
Gorbunenko had been providing financial support to Seymour for around a year as the lack of deals in the uncertain market conditions left the firm struggling to stand up.
In May last year Harris is said to have gone to Gorbunenko for more support in exchange for a stake in the business and Seymour subsequently made an application to the financial watchdog.
Not only did the watchdog reject the application after an investigation into Gorbunenko’s business affairs, the FSA is also understood to have demanded Seymour repay £3 million worth of loans to the tycoon within a month.
A source quoted in the Sunday Times is reported to have said: ‘The wanted all ties with Gorbunenko severed as quickly as possible. It didn’t seem to matter that we didn’t have the money.’
The sources also told the paper Seymour had a big enough pipeline of business to be able to pay back the tycoon at some point in the future.
The regulatory pressure saw Seymour fall into administration and resulted in a fire sale with 15 suitors believed to be interested in acquiring the firm, before it was eventually sold to Cantor Fitzgerald at a cut price.
Harris and other shareholders and creditors who owned around 16% of the firm received nothing.
Harris earned the moniker ‘Mr Football’ through brokering a series of transactions. These included Roman Abramovich’s £130 million takeover of Chelsea, while he also attempted to broker a Qatari takeover of Liverpool, which was eventually aborted.
Prior to this as head of HSBC’s investment bank he served as an adviser to Manchester United.
Harries is expected to continue with his football business and is leading a consortium trying to secure the future of Portsmouth football club.