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17th Jan 2019

“Regrettable remark” may have prevented Mike Ashley from selling Newcastle

Mike Ashley has acknowledged that 'regrettable' comments he made in a bar in Dubai may have prevented him from selling Newcastle to middle eastern investors

Reuben Pinder

Ashley denies the allegation of insulting the Dubai Royal Family, Islamic Faith and Kevin Keegan

Newcastle United owner Mike Ashley has found himself in a potentially huge legal battle with former Newcastle director Tony Jimenez, who has accused Ashley of insulting the Dubai Royal Family, the Islamic faith and Kevin Keegan over ten years ago.

Ashley has denied the allegation and a judge has expressed doubts about the reliability of Jimenez’s account of events, according to the Times.

It is reported that the judge has said that Ashley has acknowledged the possibility that he “may have made a ‘regrettable’ remark” that could have prevented him from selling the club to investors from the Middle East. It is reported he could have made the comments during an incident in a Dubai bar.

Ashley can pursue Jimenez for the £3 million that Jimenez claims was paid to him during an attempted sale of Newcastle back in 2008, the High Court ruled yesterday.

The case hinges on the claim that Jimenez was not paid for trying to sell Newcastle but as a down payment for an investment in a French golf course, which was never built. A trial is due to be held next year. The judge ruled that the company Jimenez worked for, South Horizon Trading Ltd, cannot be pursued in the UK courts.

The central part of the case, according to the Times, is a “brokerage contract” between the two parties that was allegedly signed on 17 September 2008, the day after the incident in Dubai, where Jimenez alleges that Ashley made racially insulting comments about potential buyers and other Muslims.

Ashley contends that the brokerage contract alleged to have been signed on that date was forged.

There is disagreement over the extent of Ashley’s comments in the bar room in Dubai. While Ashley acknowledges he ‘may have made’ regrettable comments, Jimenez’s version of events alleges Ashley to have insulted the Dubai Royal Family, Islam and Kevin Keegan, who was hired and fired by Ashley in 2008.

A spokesman for Ashley told Bloomberg that the Newcastle owner “flatly denies that he ever made any comment about the Dubai royal family, the Islamic faith or Kevin Keegan whether as wrongly alleged by Mr Jimenez based on hearsay evidence, or at all”.

The Times reports that Newcastle managing director Derek Llambias and the former director of football Dennis Wise were also witness to the alleged incident in Dubai, which was heard by an undercover journalist, according to reports.

The content of his comments were secretly recorded but never published as the method of obtaining them broke local laws.

“The defendants [Jimenez and South Horizon Trading Ltd] fairly submit that Mr Ashley was slow to engage with the allegations about the events on September 16 2008 and that his initial account was guarded,” the judgment says.

“He [Ashley] now says that he may have made a regrettable remark in the Bahri Bar, directed towards those with whom he had been in negotiation earlier that day, and that undercover journalists were present.

“Mr Jimenez says Mr Ashley made remarks that were much more widely directed and included insults to the Dubai Royal Family and the Islamic faith and its followers, and to Kevin Keegan. It is common ground that steps were taken by Mr Ashley to manage the way in which the event was reported.

“There are, however, significant differences of recollection about the effect of the events on Mr Ashley and Mr Llambias. Mr Jimenez says Mr Ashley was shaking and saying he and his business empire faced ruin. Mr Jimenez says Mr Ashley came to see him at 4am on September 17 2008, in a panic worried about being locked up in Dubai and facing adverse press reporting in the UK. This was the context for the September 17 Agreement being drafted by Mr Jimenez later that day and, he says, being signed by them both.

“Mr Ashley’s account of events is completely different. He says he was relatively unconcerned about the incident in the bar and its consequences and more worried about the collapse of Lehman Bros on September 15 2008 and the risk that HBOS, in which he had substantial holdings, might fail.”

The judge also questioned Jimenez’s version of events, citing a “significant gap in the defendants’ case”, including the absence of any financial records for South Horizon and the nine-year period between the incident and his initial attempt to recover the additional £7 million.

Ashley has compared the case to one from 2013 between Jimenez and Dennis Wise, who was Newcastle’s sporting director in 2008. In that case, Jimenez was ordered to pay Wise £500,000 investment in compensation after the High Court ruled Jimenez guilty of “considerable obfuscation in this litigation concerning the monies paid to him”.

Since buying Newcastle United for £134 million in 2007, Ashley has unsuccessfully tried to sell the club on several occasions, the first of which involved Jimenez in 2008. He is currently in negotiations with four potential buyers and hopes to receive £300 million.