Investment manager Downing has hit back at accusations made by Staines Town Football Club (STFC) that it has, among other things, been involved in financing large scale bribery and corruption, breaching the modern slavery act and circumventing sanctions against Russia following its invasion of Ukraine.
An ‘urgent statement’ appeared on the STFC website on 29 March, demanding a “thorough investigation into the practices of Downing LLP”.
STFC, which plays in the south of England-based Isthmian League, said it has been forced to temporarily suspend all primary operations, including fixtures, until an investigation has been completed by the relevant authorities.
In response, Downing posted a statement on its own website saying the allegations published by [STFC owner Joe] Dixon against the company and the football club’s landlord, The Thames Club (TTC), a company in which funds managed by Downing hold an investment, “are untrue”.
‘Fraudulently masquerading itself as a responsible investor’
Alongside the ‘urgent statement’, STFC posted a 58-page letter addressed to home secretary Priti Patel, copying in nearly 90 people and organisations.
Other recipients include United Nations secretary general Antonio Guterres, prime minister Boris Johnson, Dame Judi Dench, Dame Emma Thompson, Princess Eugenie, AJ Bell founder Andy Bell, The Football Association’s chief executive Mark Bullingham and the former mayor of New York City, Michael Bloomberg.
A considerable section of the letter is dedicated to showcasing Downing’s public commitment to ESG principles and zero tolerance to slavery.
What follows are dozens of links to articles about companies in which Downing is/has invested, which STFC provide as so-called evidence of how it has breached those commitments.
STFC describes Downing as “a rogue organisation that is fraudulently masquerading itself as a ‘responsible investor’ in order to induce non-professional investors to part with their capital, and subsequently will freely deploy it into the most nefarious and barbaric sectors of society”.
It further accused the investment manager of having “holdings in companies that engage in bribery and corruption, environmental crimes, financial fraud, price fixing, money laundering, deforestation, human rights abuses, forced labour, child labour, gender discrimination and murder”.
A copy of a letter sent to the home secretary on 14 March is also included, which alleged Downing “has been involved in obtaining a benefit from and supported the government of Russia by carrying on business of economic significance to the government of Russia, as well as carrying on a business with a government of Russia-affiliated entity”.
‘A construct that does not bear scrutiny’
The statement and letters are described by Downing as “the latest attempt by Mr Dixon to deflect attention from his mismanagement of STFC over a number of years and this has left the club in a parlous financial position”.
“STFC has enjoyed the benefit of a lease from The Thames Club (TTC), its landlord, at a peppercorn rent. Regrettably for a prolonged period, STFC has fallen into arrears on the payment of its service charge under the lease and other debts, which means it has an increasing number of unpaid creditors.”
Downing refuted the accusation that it or TTC were in any way responsible for STFC ceasing operations.
The alleged breach of the Modern Slavery Act 2015 by Downing is described as “a construct” which “does not bear scrutiny”.
Downing said that neither it nor TTC, “or indeed STFC, qualify as a ‘commercial organisation’ for the purpose of the Act as they do not meet the financial thresholds set by the Secretary of State”.
“That is not to suggest that Downing and TTC operate with anything other than the highest ethical standards.”
With regard to the allegation that Downing has breached any Russia sanctions legislation, the investment manager said it “is also wholly untrue”.
“Mr Dixon’s logic appears to be that because funds managed by Downing hold an investment in a regulated financial institution listed on the Swiss stock exchange, alongside Blackrock, UBS and a number of pension funds, Downing is breaching sanctions because the Swiss entity has some Russian interests.
“However, that institution is not itself sanctioned and has subsidiaries which are regulated in the UK by the Financial Conduct Authority and are also not sanctioned. This is the sole justification for Mr Dixon’s baseless claims.”
Downing added: “The remainder of the wild allegations made by Mr Dixon should be viewed in the context of the above.”