I would like to comment on the article “Wherefore Chairman Scheie go” in RB Tuesday 8 December. The article contains a number of errors and are imprecise. Attached my comments in 20 points:
1. “All the other board members have been silent”:
There has been extensive leaks from the board / management to the media. A number of confidential board documents have ended up at RB. This is confirmed and visualized by RB in several cases. In addition, it seems that RB is used as a mouthpiece of certain people in and around the board / management. Given these leaks and erroneous representations I have as chairman had pronunciation me to correct what is communicated in RB.
2. “Nevertheless has none of the other board members wanted to come with his version when Chairman Scheie on several occasions has agreed to be interviewed about how she experiences the economic situation in LSK. It is a version of reality in which neither LSK majority of the Board or the staff of the club’s management parts. “
All directors and decisions are taken jointly by the Board. There has been disagreement on the board about the economic situation in LSK. There have been frequent meetings throughout the years in which the Board and CEO have been collected. Ratings of the club’s financial status is also conducted by external parties including the municipality. Skedsmo municipality has undertaken a thorough review of the club in connection with LSK hall and there is a public document of 6 November 2014 Councillor writes that “LSK Group is undoubtedly in financial difficulty.” Further it states “Without significant economic improvement in the association looks it does not appear that Lillestrøm Sports manages to reduce short-term debt and / or service loans to credit institutions and the related creditors. ”
“As we see it from the received financial statements (accounting pr. 31.8. 2014 liquidity forecast for the last quarter 2014), it may look like Arasen Property will go with a smaller deficit 2014. However, it is recognized rent from LSK premises association manages to club premises and VIP facilities at Åråsen stadium and for rent in the LSK hall. Failure to pay for rent for these premises in 2014 will probably be over 5 million. Kroner and receivable must probably depreciated thereby increasing the real deficit Arasen property. Revenues are recognized in the accounts and when it is not paid affects the liquidity of Arasen Property AS. “
NFF by license Tribunal has received consolidated and action plan from LSK and require positive equity group . LSK must do steps to satisfy the criteria of the action plan in and with the club is in so-called “red zone.” This is to avoid the points move in next year’s series.
It has been one of the board’s objective to secure claims about positive equity so LSK can meet the requirement from the NFF and ensure klubblisens. This in addition to cost savings and the provision of liquidity to ensure ongoing obligations has been a key focus for the board this year.
3. “Truth is that since the summer and especially in the fall, has been a huge disagreement internally LSK Board on the way forward.”
According to the decision of the board and board meetings is not correct. Last month there has been signs that it has been going on meetings and activities outside the boardroom where it appears that it has established itself a counterforce with another strategy than the Board.
Many of the decisions taken by the board has been demanding for the Board to stand in. It has been a strong pressure on board members in connection with decisions that have resulted in major changes for individuals and who have been across previous strategies in the team.
4. “In addition has economics group as chairman relied on (also called DD-group) and other key LSK people affected board from each side”
As pointed out earlier is finance group a resource volunteers with economics expertise Board involved in its work to analyze the club’s finances. They performed tasks on behalf of the Board and all they have done and come up with is rooted in the Board.
5. “There chairman talked about large debts, sales of LSK hall and other properties, it has gradually become a clear majority on the board of to look at other solutions. “
There is no evidence in the Board’s work that there has been disagreement about the solutions board has worked with. There are board decisions on what is decided. If any members wish to go back on board original decision is not notified that matters for reconsideration by the Board. However, it appears as though there are forces that do not want that investigated the opportunities that exist on the sale of property.
6. “Scheie in turn have meant that sales are only resort to salvage club economy.”
This I have not spoken. That sale however is a model that can help to get a sustainable effect for the club is right. There are huge debts in the team and in Arasen Property and it is therefore recommended to make bigger steps to repay debt that can also help with liquidity in the team. Liquidity requirement is large and it has been an ongoing work to provide liquidity this year.
A model that is now working on a solution of a financial nature that can improve the equity situation. This in addition to any financial contribution from the municipality in connection with LSK hall and exemption from lenders can provide a respite. However this will most likely not be enough in relation to the basic financial requirements NFF puts the financial action plan and the economy in the Group will next year could still be strained.
7. “After each were very few directors and none in LSK administration involved in the process of finding a solution with Skedsmo municipality”
This is not correct. The entire board of LSK and Arasen Property and CEO LSK has been involved in the process regarding the sale of LSK Hall. Unanimous decision by the board of both companies is made in relation to which model should be submitted above Skedsmo municipality based on economic considerations for the group. In dialogue with politicians and municipal employees were distributed tasks and all those involved participated. A separate communication solution was discussed, decided and anchored by a unanimous board before work above municipality was initiated. Efforts strategy involving the sale of LSK hall was handled extremely thorough when it earlier in the year was submitted a proposal to the municipality that were not approved by the Board and which was later withdrawn.
8. “RB sport know that both present and former directors in the process have felt that they have been accused of hiding things.”
There is no one who has been accused of this as far as I know.
9. “Although signals from Skedsmo municipality became clear that a purchase of the LSK hall was not relevant, did not want the chairman to change strategy. It created concern in the board as a whole. They feared that standing leg hard on sale would make it difficult to come to a solution with Skedsmo municipality. “
Board had adopted a common strategy. Neither the Chairman or Board members have a mandate to make your own decisions. I as Chairman may not moved beyond the Board have jointly decided.
If I or other board wishes treated cases or change course, this must be according to the normal procedure is presented as a matter for consideration by the Board. This procedure has been followed. The strategy regarding LSK hall plan was to get a sale to the municipality as this will be of great importance for the Group. If this was not possible would make club to negotiate alternative model with any contribution if it were suitable for this. The big challenge for LSK was that not everyone was loyal to the Board adopted originally strategy, but it was communicated different messages from the club representatives. This resulted in considerable uncertainty in the board and the outside world and club options for a desired solution for the sale is believed to have been weakened.
10. “Without an agreement with the municipality, would neither bank or other lenders discuss installments on loans to Arasen Property A / S and LSK in 2015″.
This is not correct. Main bank gave in November a concrete commitment of installments before LSK hall were treated in the presidency of the municipality. On the basis of internal unrest in the group meeting was held with a banker but the terms of the solution was not possible to handle the deadline. The Bank has pointed out that it is unfortunate that the media has conveyed that solutions with bank exists when such is not the case. The undersigned have experienced Nordea as cooperative and keen to find solutions based on the dialogue that has been going on longer. There has been good cooperation with the bank.
11. “It was therefore majority of LSK Board at the Board meeting on 18 November deprived Heidi Scheie responsibility to work with hall case she had spent almost all his time in recent months”
This is not correct and this is previously pointed out above RB. It’s not that one is deprived duties as Chairman. The Chairman’s task is to lead the Board’s work and ensure that the administration carries out its work based on the adopted strategy. In certain circumstances, the Board members contribute to the tasks that are so situation in LSK been. I have contributed, other board have contributed and external have contributed. Who helps with what, when – reconciled basis. There has been disagreement about who should do what, when so far as I know.
However, what is of interest is that I in advance of its meeting on November 18 could read on RB.no that evening board meeting would be a meeting where someone would try to change the composition. This was unknown to me. This way of communicating in the media can act as an element in a power struggle. It may look like this fray was initiated in October. It is reported that forces around the club wished board should resign and it was put forward alternative control schemes aiming to convene an extraordinary general meeting.
12. “In a memo from LSK Board after the meeting on November 18 where it was requested that especially Rome Blad should access it, it says, among other things …”
Board members initiated a note after the board meeting 18.11 because there were people outside the Board of LSK not wanted in further process above municipality. Board wanted further that the information should not accrue RB when RBs mention of the work of LSK Board last period not savored lucky for the club. For information was not undersigned who initiated this.
13. “RB sport stated on November 19, on the basis of the Board’s message, that Scheie was deprived task to lead this work. Then I felt the chairman is necessary to go out to RB to tell that everything was as before. “
RB must clarify the information received with the terms before it is printed in the media. How a board work, cooperation between the Board, the CEO and other employees are regulated by distinct mandates and responsibilities. There are rules on how the cooperation will take place and the same goes for how decisions the board made. Whether one holds the chairmanship or they have not. The same applies to directors. One can not be deprived parts of the responsibility they have as chairman. A board may, however, deprive the general manager duties when the board is the Managing employer. When RB falsely informs and make judgments that are not correct I see it as natural that I, as chairman corrects and point this out.
14. “The plan to control the majority was, as we know, to let it be with this castling and let Scheie continue on the Board to the AGM in February. But that view changed after the chairman chose to go to RB with what they perceived as misinformation. “
The undersigned has not had another plan than to undertake a one-year position as Chairman LSK. This is to contribute a volunteering in sport and to assist in cleaning up the club’s financial situation. The board is elected by the members and the annual meeting. It is not the Board may select their colleagues. The undersigned has not communicated inaccurate information to RB.
15. “Wednesday 3 . December was the chairman convened a joint meeting where the Board of LSK, Board of Arasen Property and club control committee was collected at the end of the meeting was only LSK Board present, and there gave majority from what we know Scheie a deadline to resign as chairman. The alternative to that she should resign, was that the majority would convene an extraordinary meeting just before Christmas to remove the chairman. “
Oh financial situation has been and is precarious. At the last board meetings have parts of the board are not related to the meeting’s agenda and important issues for the club is therefore not treated. After dialogue with NFF on the situation regarding the action plan and measures license summoned chairman to work meetings and rush-board. Several board members have not completed and it appears that it is attempted to avoid conducting meetings. After strong pressure from the undersigned and other held a last week where there was a thorough briefing on the situation above the Group manages and key people. Such conditions are not lucky.
As the situation has evolved, I see no possibility to continue in my office. The reason is lack of regulatory framework to implement the measures and changes I deem necessary. It is therefore natural that I prefer me and let others take over the work ahead. Oh closest partners such as banking, Football Association and the club’s internal organs are informed about the club’s challenges. The remaining Board has undertaken further responsibility for safeguarding the club’s financial situation. My decision to resign from the board is rooted and accepted by key people in and around the club and I have gotten understanding and acceptance of my choice.
16. “In previous month drew both Anja Snedsbøl and Ronny Blomseth from their posts LSK Board. Asked by VG that “it sounds dramatic when three directors resigning?”, She answers the following: Yes, it is of course unfortunate. There is nothing else to say about it. Scheie was informed that the two other members are withdrew for other reasons, and that their departure has nothing to do with her. But so her response is reproduced in the VG interview she chose not to emphasize it. “
Three directors have resigned from the Board. All three new directors this year. According to information, none of these had previous positions, employment or relationships with key people in LSK Group. It may seem that forces LSK found it uncomfortable that the company’s operations were reviewed with new, unbiased eyes, when you see what has happened the last period. Leaks to the media, trying to dismiss the board, administration letter to the board, media attention, economic challenges and untidy decision making means it can be difficult to find people who will undertake and possess such a volunteer duties.
17. “Therefore has many employees, current and former directors reacted with amazement as the retired chairman and her finance group believe they have found” hidden bills in locked cabinets “in their pursuit of financial overview at Åråsen. In their eyes they came up with figures which were known before, and figures such as finance group could easily obtained by asking the economically responsible in the club administration. It was perceived as suspicion of both employees and early LSK controls that economics group did the job on their own, and in a way wasted important time. “
There were no completed financial report or analysis of the Group’s finances that the new board could assume for making decisions. Board deliberately chose to get new powers to analyze the situation so that the board got this from several angles. This work was done in a short period of time by volunteers in cooperation with the administration and the board and resulted in a report that gave a good status and forecast of financial performance and liquidity needs. This analysis was used as the basis for the restructuring plan which was then adopted which cost approximately 20 million was included as an important element. It is a completely normal in business life that a new board wishes to acquire an overview of the actual conditions round economy in a group, and that this analysis undertaken by persons / bodies outside the Group.
18. «Previous regime Arasen has rightly been criticized for some of the choices made when it comes to finances. But fair’s fair. It was actually the previous board that started downsizing in LSK administration when two employees were dismissed and three FTEs cut already on 31 January. “
That is correct. The need for cost cuts were significantly greater. Without further reductions of costs was the year’s profit forecast for 2014 minus 17 million in the club. There was therefore a need for further reductions of costs which emerged of the economic analyzes which were prepared after the new board was established. Action plan on cutting costs at 20 million was approved.
19. “Chairman Scheie was together with his supporters in economics group outside board keen to sell parts of LSKs property portfolio to get rid of debt. A large majority of the board has gradually seen opportunities to rectify LSK economy without selling the family silver. “
The strategy of selling property is a joint decision made by a unanimous board. There are no direct decisions about changing this strategy, but because of forces that seem to have objections to the sale of property this fall has delayed and delayed processes to analyze this further.
group’s leverage is particularly high. A large part of the debt Arasen Property is tied up in fixed bonds which implies the need to find solutions in cooperation with bank in case of sale of property. Being the landlord of the property involves a degree of risk if it is not established long leases with solid tenants. It paid a high annual interest cost, probably among the highest level among football clubs in Norway. There are also incurred operating and maintenance costs of owning property.
Based on the license model to NFF will a sale of property provide a positive effect on equity requirements. At a sale of real estate bank has given signals to transfer liquidity to the parent company, club. If the group can own their own stadium and tribunes to safeguard the sporting one would assume it was the most important for the club members instead of owning another property that ultimately may lead to the club fail to fulfill their financial obligations.
Work in parallel with alternative models to the sale of property that will safeguard the situation of the group the next period but this will not give the same desired economic effect as a property sale could have caused.
20. «The majority Board believes that the situation in LSK looks much brighter than the chairman Scheie have expressed.”
There is no board or club management which has submitted A final alternative solution to the club’s financial challenges. Based on the economic assessments and advice the Board has received from the municipality and municipal consultants, Nordea, Football Association, the volunteers with a background in economics / finance and competent directors in Arasen Property and LSK it surprising if the majority of the board can express the situation looks brighter. I hardly think it could be true. However, there are several possible track to get through the next year so it is very likely that this will be resolved in a short period of time. It is believed, however, that this will involve a still ongoing focus on liquidity and possibly a need for further cost cuts.
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