Burst Bubbles Business failure of 'tycoon' who aims to buy West Ham
(Daily Mail Via Thomson Dialog NewsEdge) THE man masterminding the GBP70million bid to buy West Ham can today be exposed as a small-time business failure with a string of commercial enterprises operating at huge losses.
Kia Joorabchian, the wheeler-dealer at the centre of the biggest transfer coup in Premiership history when Carlos Tevez and Javier Mascherano arrived at Upton Park last week, has an appalling track record in business.
A detailed investigation of Joorabchian's ventures - ranging from horse racing to a martial arts gym in London - has revealed recorded losses of more than
GBP1m in the past two years and borrowings in excess of GBP5.2m.
Sportsmail revealed last Friday that the Iranian, who holds British and Canadian passports and lists three dates of birth with Companies House, has opened talks with Hammers chairman Terry Brown and managing director Paul Aldridge.
After our investigation uncovered a string of failing business ventures, it seems incredible that the pair are entertaining the prospect of selling the club to a businessman without a proven record. It will cast doubts over whether he will be able to pass the FA and Premier League's stringent 'fit and proper persons test'.
Although Joorabchian, 35, portrays himself to the media as a high-roller, his businesses are struggling to stay afloat considering the weight of debt under which they are operating.
The Karmaa martial arts gym he owns in Camden, London, has a turnover of just GBP250,000 and has lost GBP679,000 in the past two years.
Despite a mystery loan of GBP500,000, Joorabchian has struggled to keep the gym afloat. Although the company has an extravagant website, telephone callers are put through to a BT call-minding service.
In a separate venture, Karmaa Racing Limited, Joorabchian's foray into the sport of kings has also been an unmitigated disaster.
Despite losses of GBP186,000 in the past two years, his horse Carlitos Spirit - named after Argentina World Cup star Tevez - has run five times this year and has winnings of just GBP934. Hammers fans must hope Tevez has a better strike-rate.
Although Joorabchian's introduction to British horseracing is at the lowly entry level - his colts sometimes run on the all-weather surface at Lingfield - he has taken out an extraordinary loan of GBP1.2m to pay for 'hospitality and advertising'.
It is understood that the mystery loan has facilitated a corporate hospitality box at a racecourse and he has agreed to repay half of it within five years, the rest by 2016.
Joorabchian, who has claimed that he is seeking investors from the Middle East to fulfil his dream of owning West Ham, is also a director of car company Medway Autos.
Despite a significant turnover, the company, which sells and services cars, has posted losses of GBP247,000 in the two years up to 2005. Although the Kent dealership is in a parlous financial state with an overdraft of GBP1m, the directors increased their remuneration by 50 per cent last year.
Joorabchian has also taken control of Green's Motor Group in Rainham, Kent, after his 68-year- old father Mohammed recently died of a heart attack the day after opening a servicing and parts operation at Holborough, near Rochester, with the help of a GBP2m loan from Barclays Bank. Ownership of Greens of Rainham, a separate company which has been in existence for 25 years and has an overdraft of GBP500,000, has passed to Kia Joorabchian, his sister Tannaz and their widowed mother Shahrzad.
The developments are the latest twist in an extraordinary week for West Ham fans and will cast further doubts about Joorabchian's credentials to take over a Premiership club.
He claimed last week that he had relinquished his directorship of Media Sports Investments, the company which retained the registrations of Tevez and Mascherano and owns Brazilian champions Corinthians, for whom they played.
MSI, formed in 2004, posted losses of GBP6,474 up to August 31, 2005, yet a matter of weeks earlier they notified the Stock Exchange of an impending bid for West Ham, valued at around GBP70m. It is understood MSI have a separate entity in the tax- free British Virgin Islands where the law exempts companies from declaring their trading figures.
The remarkable disclosures come only days after Joorabchian confirmed that he will use the Hammers as a shop window for South American football talent.
On Saturday, he said: 'My business model is to go to Brazil because it is a breeding ground for world- class talent. My strategy is to buy them cheaply, develop them into players good enough for the top European clubs and sell them for top prices.
'If West Ham are going to the next level they have to have young players.
These players are an investment.
From an investment point of view, they can make big profits.' Although Joorabchian, who was educated at Shiplake College in Walker's first win came in his 131st race while Bayliss, who fell in a chaotic race one, took race two to go 100pts clear of James Toseland +++ Henley, has already admitted that he does not yet have the funds in place to buy West Ham, our revelations will alarm the football world.
Joorabchian's business interests raise serious questions over his fitness to take over the club and a former business associate warned Sportsmail last night that his involvement will spell trouble.
The source, who has previously walked away from a deal involving Joorabchian, said: 'What he has done is an abuse of the transfer system and the fans.
'This guy will prove to be a failure.
How anyone can describe him as a successful businessman is laughable.'
Joorabchian, who watched the Argentina versus Brazil game at the Emirates Stadium yesterday, and his spokesman were unavailable for comment last night.
Hammers 'tycoon' is fighting to stay afloat
THE LOSS ACCOUNT
KARMAA RACING LIMITED
Horse racing company)
Year to Sept 30, 2005: GBP151,574 loss.
Year to Sept 30, 2004: GBP34,915 loss.
Total winnings: GBP934.
Sept 30, 2005: Takes out loan of GBP1,224,822 to pay for 'hospitality and advertising'. Half repayable within five years, the rest by 2016.
MEDIA SPORTS INVESTMENT (Football investment company) Aug 31, 2005: GBP6,474 loss.
KARMAA LIMITED (Martial arts gym) Year to Dec 31, 2004: GBP278,000 loss.
Year to Dec 31, 2003: GBP401,000 loss.
Turnover: GBP250,000. Loan: GBP500,000.
MEDWAY AUTOS (Car company) Year to Dec 31, 2005: GBP216,000 loss.
Year to Dec 31, 2004: GBP31,000 loss.
GREENS OF RAINHAM LIMITED (Car sales) Year to Dec 31, 2005: GBP4,584 loss.
Year to Dec 31, 2004: GBP99,000 profit.
Overdraft: GBP500,000. Notice in the accounts warns the company has serious financial problems GREENS MOTOR GROUP (New car sales company) Year to Dec 31, 2005: GBP30,000 profit.
June 2005: Borrows GBP2m to buy land in Holborough with loan from Barclays Bank.
Copyright 2006 Daily Mail. Source: Financial Times Information Limited - Europe Intelligence Wire.