CGI responds to FRC Review of financial reporting

Chartered Governance Institute responds to proposed transfer of the ‘stewardship and care’ of Chelsea FC

Commenting on Mr Roman Abramovich’s recent proposed transfer of the ‘stewardship and care’ of Chelsea FC to the club’s charitable arm, The Chelsea Foundation, The Chartered Governance Institute UK & Ireland (CGIUKI) said:

“While there are reports today that Mr Abramovich is seeking to sell Chelsea FC, his proposal on Sunday involving the club’s charitable arm raises a number of serious charity governance concerns.

“To accept Mr Abramovich’s offer would pose considerable risk – both financial and reputational – for the charity and its trustees. They must consider whether taking on a £500m club carrying recent losses of £153.4m will have a detrimental effect on the charity’s ability to carry out its activities, particularly given its current income of only £5million.

“Taking on the club’s reported £1.5bn loans from Mr Abramovich could result in the trustees and the foundation losing the ability to act independently, especially in the light of the present lack of clarity regarding the degree of authority, not to mention ownership, that is being transferred.

“In the interests of upholding good governance, we recommend that the Chelsea Foundation’s trustees refer to the Charity Governance Code. They should consider their legal duties under charity law and whether the charitable purposes of the Foundation will be supported by such a move.

“In accordance with the Code, the trustees should also consider whether they possess the relevant skills and experience needed to manage an entity of Chelsea FC’s size and complexity. 

“We are pleased to hear that the Chelsea Foundation has decided to report Mr Abramovich’s proposal to the Charity Commission and we await with interest the outcome of their deliberations and further legal advice.”