FORMER Hereford United chairman David Keyte has been invited to give evidence, in public, to a special meeting of Herefordshire Council’s scrutiny committee reviewing the restructure of leases on the former club’s Edgar Street ground.

But committee members have been explicitly told that the hearing at Hereford Shirehall next Wednesday (Feb 18) won’t be a “blame game”.

Councillor Nick Nenadich, as a former Hereford United board member, is also on the list of invitees the committee wants to hear from while the Football Association (FA) has been invited to provide a statement to the committee outlining its policy position if a representative cannot attend.

Other potential witnesses include senior council director Geoff Hughes, the council’s head of corporate management Tony Featherstone, and deputy solicitor to the council Donna Burgess.

The Insolvency Service has denied reports of Mr Keyte visiting Edgar Street yesterday (Mon).

In the wake of Hereford United (1939) Ltd being wound up, the scrutiny review is to examine what happened around the lease restructure in 2013/14 and identify “lessons learned” overall and from more recent events associated with the club’s demise.

The committee is also looking to clarify the relationships between HUFC (1939) Ltd  and Herefordshire Council and its predecessors.

Next Wednesday’s hearing represents a departure from customary scrutiny practice in not examining a decision “called in” by the committee.

Instead, the committee is expected to focus on how “lessons learned” might assist future approaches by the council towards areas of responsibility.

Last month, the council’s cabinet considered a report on the seeking of a new tenant at the Edgar Street ground – for which the council acts as landlord – and agreed to invite expressions of interest for a short term lease so competitive football can be played there by September in accordance with advice received from the FA.

It was also agreed that a further report would come to cabinet on the longer term options for the site and for support for league football within the county.

The scrutiny committee has been explicitly told  that it will not consider any allegations made against individuals or options for the longer term ahead of that further report to cabinet.

Key questions for the committee have been identified as:

- Was the lease restructure robust and effective?

- What was the purpose of assigning development rights?

- What alternative options were considered and why were they not pursued?

- What is different about the interim short term lease arrangement?

- What can be done to ensure that leases are managed in the public interest in the future?

- Are there any additional provisions that need to be included in the leases?

The committee had been waiting on the winding up order before holding the inquiry.

Though landlord of the Edgar Street ground, the council does not have any direct control or involvement in the club and its decisions.

At the centre of the scrutiny inquiry are to leases referring to redevelopment of the Meadow End and Blackfriars End, stipulating that any proceeds be re-invested in the ground and its facilities.

Earlier last year the council received a request from the club's then new owners for a transfer of those leases to a holding company within their ownership. 

The folding of the club sees the leases revert back to the council.

Assigning the Edgar Street leases – one for 75 years on the ground and terracing to the west, the other for 33 years for the stand and parking area to the east and both dating from 1982 - was one of the last big deals done by the former Hereford City Council.

During the late 1990s, with United facing severe financial problems, the leases were reassigned to property developers in return for a £1m capital injection into the club.  

The money was made available through two companies, the BS (Bristol Stadium) Group and Chelverton.

BS and Chelverton took equal ownership of a special purpose company called Formsole Ltd which made the investment and held the leases – as the tenant under both – with the club holding sub-leases.  

By August 2001, BS had sold its “loan” to Chelverton which ran into trouble little over a year later when control of the leases passed to Carillion Richardson.

United still owed £1m plus interest to Formsole which stayed solvent when Chelverton went into liquidation.  

The reassignment of the leases was supported by Herefordshire Council when it took control of the former city council’s affairs.

Getting the leases back was pitched as a political priority when the news broke in April 2010 that then United chairman Graham Turner and vice chairman Joan Fennessy were ready to sell their majority shareholding in the club.

The club began negotiations with Carillion Richardson for the return of the leases almost as soon as the Keyte-Russon takeover was completed in June that year.

That deal was done by December with the club paying £452,000 to secure the return of the leases and settle a £1,069,500 debt to Richardsons Developments, clearing the way for a new single lease and the development opportunities that could bring.

The deal was intended to offer the club security for the next 30 years and ensure future re-entry to the Football League - which requires a 25-year secured tenancy.

It also opened up opportunities for grant funding for any future development - £400,000 in the Conference and £750,000 in the Football League.

The council was ready to allow an extension to the new stadium lease of 250 years once development at either end was underway, with proceeds from the sale of development areas held in a joint escrow account.

That money was intended for the construction of two new stands - one at each end of the ground - and modernisation work on the existing stadium.

The development agreements were terminated by the council in December with confirmation in writing to the directors of the former HUFC (1939) Ltd.

This action came as the council took possession of the ground and related land from HUFC (1939) Limited followed the High Court winding up order made against the club which effected the forfeiture of the leases on the ground and the development agreements.

The inquiry is held in public at Hereford Shirehall from 10am next Wednesday (Feb 18).

A meeting of HUFC (1939) Ltd creditors is to be held on March 9 with a meeting of contributories held afterwards.

Both meetings will be at Future Inns, Bond Street South, Bristol.

At the meeting, creditors may resolve:

- To appoint one or more named Insolvency Practitioners - but not the Official Receiver - to be liquidator or joint liquidators of the company.

- To establish a liquidation committee

- Where there is no liquidation committee, to specify the basis of the remuneration of the liquidators.