Another day in Newcastle United Twitter takeover world, and another surge of excitement and speculation, this time fuelled by some screen shots taken from the Companies House website.  Let’s break this down. Health warning: this gets quite dry and boring, quite quickly…

What has happened?

Companies House is the public register of UK companies.Two UK-registered companies owned by PIF – namely, NCUK Investment Limited (reg. no. 12415316) and PAUK Investment Limited (reg. no. 13515364) – have recently updated their respective records at Companies House.  NCUK, by virtue of having been set up (“incorporated”) in early 2020, is often believed to be the entity connected with the Saudis’ hoped-for acquisition of Newcastle United.  PAUK was set up much later, most likely in connection with other Saudi investments in the UK.

When companies are incorporated, they are required to register details of their owners at Companies House, and provide certain information, including as to the legal form of those owners.  This is so that there is transparency regarding who controls the company in question.  At the time it was incorporated, NCUK provided details of PIF (as its owner), describing PIF’s legal form as a “public investment fund”.  On 6 September, NCUK filed a form at Companies House in which they changed the information regarding PIF’s legal form, to “Corporation Sole”.

What is NCUK, and how is it connected to the takeover?

NCUK is not the intended legal owner of Newcastle United, post-takeover.  That entity is PZ Newco Limited (reg. no. 12388231).  This is clear from reading the judgment of the High Court when dismissing the club’s application to have the chairman of the arbitral panel removed (the “Pelling Judgment”),and the CAT’s summary of the anti-competition claim which was filed by Ashley’s company, St James Holdings (the “CAT Summary”).  PZ Newcois wholly owned by another UK company, Cantervale Limited (reg. no. 11128634) which is wholly owned and directed by Staveley.

PIF does not appear in this structure at all.  It has no registered ownership interest in PZ Newco or Cantervale, nor is it a director of either company.  However, it is accepted on all sides – as is apparent from paragraph 3 of the Pelling Judgment, and the fifth paragraph of the CAT Summary – that PIF (either in its own right or via NCUK) indirectly controls PZ Newco.

This must mean that there is an agreement between PIF/NCUK on the one hand, and Staveley and/or PZ Newco and/or Cantervale on the other, pursuant to which it is acknowledged that – whatever the registered position at Companies House may be – PIF (or, potentially, NCUK) is actually in control of PZ Newco, and would consequently control Newcastle United in the event of a takeover.  This makes sense, as the Saudis are making the biggest investment.

What is a Corporation Sole?

A Corporation Sole is a strange creature, which is hard to define.  It is best described as the personification of a collective body which, unlike a regular corporation, is set up by an Act of Parliament or another governmental decree, and exists to fulfil a specific purpose rather than operating for the benefit of shareholders (like a regular corporation).  Examples in the UK include the Commissioner of the Metropolitan Police, the Governor of the Church of England, and the Foreign Secretary.  It is questionable whether PIF actually is a Corporation Sole as, arguably, these can only be set up by statute.

What could this mean for the takeover?

If you were minded to look on the bright side, then you could make two closely related observations about this latest development.  Firstly, the mere fact that changes are being made by NCUK to its records at Companies House could suggest that the Saudis are still interested (otherwise, why would they bother ensuring that corporate records are up to date)?  Secondly, if that is the case, then it appears the Saudis are still working hard to make the separation argument – and supporters may look to take comfort from that.  It could be that the description of PIF as a Corporation Sole in Companies House records is an attempt to distinguish PIF from the Saudi state in the same way that, for example, the Foreign Secretary (a Corporation Sole) is distinct from the UK Government.

However, the following points should also be highlighted, in the interests of balance and to curb any over-enthusiasm:

  1. Just because NCUK has filed a form at Companies House stating that PIF is a Corporation Sole, it does not make that so. Companies House receives thousands of forms every day, and they are not checked for accuracy before appearing on the public register.  It is highly questionable that PIF actually is a Corporation Sole, if this point were to be tested.  As noted above, such entities are typically set up by legislation.  You cannot, therefore, simply declare the existence of a Corporation Sole, which is what is seemingly being attempted here.
  1. The key issue in the arbitration is the extent to which the Saudi state would be a person with control of Newcastle United, post-takeover. The legal form of PIF is not relevant to this issue.  What matters, in the arbitration, is the relationship between the Saudi state and PIF (as well as between PIF/NCUK and the intended owner of the club, PZ Newco, although it has already been acknowledged that PIF/NCUK control PZ Newco).  None of this depends on what legal form PIF itself takes.
  1. Strictly speaking, the arbitration is looking at whether the Premier League’s decision in June 2020 was reasonable, based on the information available to the Premier League at that time. The starting point for any discussion is that changes made to Companies House records in September 2021 cannot reflect the position as it stood in June 2020 (and, indeed, on the forms themselves, both NCUK and PAUK are stating that the change of PIF to a Corporation Sole only took effect from 16 July 2021).
  1. While some may see it as a positive that NCUK’s Companies House records are still being updated, and see it as confirmation that the Saudis are still in play, the reality is that filling in a Companies House form takes a matter of minutes, and costs next to nothing. It is hard to take too much comfort from that.

Ultimately, the question of whether the Saudi state would be a person with control of Newcastle United post-takeover, is a question of fact.  The evidence is the evidence.  Minor amendments to Companies House forms, particularly given the point made above that PIF probably is not a Corporation Sole anyway (even if NCUK and PAUK have declared it to be one), do not tip the balance one way or the other, on the separation argument.

All in all, there is very little to see here.

YOUSEF HATEM – @yousef_1892