Billionaire Tottenham Hotspur owner Joe Lewis faces legal trouble as he’s been arrested over alleged insider trading. The arrest has raised concerns about the future ownership of the London football club, which has been the target of multiple takeover attempts in recent years. Lewis, with a net worth of $6.6 billion, denies the charges, but Premier League rules may prevent him from controlling the club with a conviction. As Spurs remains up for sale, the potential deal with Qatar Sports Investments for a minority stake is uncertain. The charges could spark interest from other buyers, given Tottenham’s high value and revenue generation.
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Tottenham Hotspur Future Thrown in Doubt After Billionaire Owner Indicted
By David Hellier, Giles Turner and Ruth David
The billionaire behind Tottenham Hotspur has been arrested over alleged insider trading, throwing into question the future ownership of the London football club.
Spurs has been the target for multiple takeover attempts in recent years, only for the bids to collapse over price and the deal structure, according to people familiar with the matter.
Qatar Sports Investments chairman Nasser Al-Khelaifi has held talks with Daniel Levy, his counterpart at Tottenham, over the possible purchase of a stake in the club, Bloomberg reported in January.
QSI are still interested in a minority stake, but any deal is dependent on a suitable valuation, according to one person familiar with the matter. Tottenham has in the past denied that it wants a full sale of the club.
It is unclear how any potential sale will now continue. US prosecutors have charged Joe Lewis with passing on inside information from companies — a move first reported by Bloomberg News. The 86-year-old founder of investment firm Tavistock Group faces more than a dozen charges, including securities fraud. Lawyers acting for Lewis have denied the charges.
Neither Tottenham, nor its holding company ENIC Sports Inc, feature in the indictment.
“This is a legal matter unconnected with the club and as such we have no comment,” Tottenham Hotspur said in an emailed statement. Calls and emails to Tavistock’s media team weren’t returned.
QSI declined to comment.
Premier League rules state that an owner with a conviction cannot control a football club, even indirectly. Last year it forced Roman Abramovich to sell Chelsea FC, after sanctions were placed on the oligarch following Russia’s invasion of Ukraine.
“I wouldn’t be surprised if these events spark some opportunistic takeover interest in Tottenham Hotspur,” said Jonny Gray, senior managing director for sport at consultancy group Ankura. “Many potential buyers have shown interest in the past and the noise over this matter is bound to focus minds.”
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Up For Sale?
Lewis bought a stake in Spurs in 2000 for £22 million from UK investor Alan Sugar, and with the backing of Levy, turned the club into a financial success story.
One of the highest revenue generating clubs in Europe, its £1.2 billion ($1.5 billion) Tottenham Hotspur Stadium now hosts NFL games and live concerts. Painfully for the club’s fans, it hasn’t won a league title, English football’s defining trophy, since 1961 or indeed any competition in the past 15 years.
With football clubs now commanding sale prices in the billions, Tottenham has attracted the attention of multiple buyers. But negotiations have stalled over price and the role of Levy, according to people with direct knowledge of the talks. The Tottenham chairman asked for a hefty fee to continue running the club, the people added.
A spokesperson for Levy didn’t respond to a request for comment.
Levy and Lewis have placed a valuation of more than £3 billion on the club, the people said. In comparison, Chelsea FC — also based in London and far more successful on the pitch in recent years — sold to US owners for £2.5 billion last year.
Despite the involvement of Lewis the make-up of the current ownership is unclear. ENIC owns 86.58% of Spurs, according to the club website. And “certain members of Mr J Lewis’s family” own 70.12% of the share capital of ENIC. The rest is owned by Levy.
On the UK companies registry, Lewis ceased to have control over Tottenham Hotspur Limited last year and was replaced by Katie Book and Bryan Gilnton, lawyers based in the Bahamas focused on estate planning.
Despite the restructuring, Lewis remains the head of his family, with a net worth of $6.6 billion according to the Bloomberg Billionaires Index.
Frustration with not winning major trophies has led supporters to call for Levy, who has remained the public-facing owner, to leave the club, which finished eighth last season. Its talisman captain Harry Kane has also been linked with a transfer away from the club.
“This has been an immensely difficult season,” Levy wrote in a match-day program toward the end of last season. “We made footballing decisions over recent seasons based on ambition and a desire to bring success to our club and they have not delivered what we had hoped.”
–With assistance from Thomas Seal.
© 2023 Bloomberg L.P.
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Billionaire Joe Lewis Faces His Biggest Fight on Insider Trading Probe
By Ben Stupples and Ava Benny-Morrison
Joe Lewis built one of the world’s biggest fortunes taking big swings in public markets, with his major bets as a currency trader alongside legendary investor George Soros earning him a nickname of “The Boxer.”
Now, the 86-year-old billionaire, who has amassed a fortune across real estate, art and sports, including as owner of English soccer club Tottenham Hotspur, faces one the biggest fights of his career.
The Tavistock Group founder is accused of abusing his access to corporate boardrooms to pass on inside information to his friends, staff of his 321-foot (98-meter) superyacht, personal pilots and romantic interests.
After turning himself in to federal authorities in Manhattan on Wednesday, Lewis, who lives in the Caribbean, faces more than a dozen counts of securities fraud for alleged “brazen” conduct that spanned about eight years. He pleaded not guilty and was released on a $300 million bail package, secured by his yacht and private jet.
As part of his bail conditions, he can’t board the yacht or travel internationally and can only use his plane to travel domestically for court purposes. Lewis’s attorney, David M. Zornow, said the government made an “egregious error in judgment” charging his client.
“Mr. Lewis has come to the US voluntarily to answer these ill-conceived charges, and we will defend him vigorously in court,” Zornow said in a statement on Tuesday night.
Family’s Pub
Born in London, Lewis lived above his family’s pub until it was destroyed in World War II during the Blitz. At 15, he left school to work at the family’s cafe and transformed it into a chain of themed restaurants that he eventually sold for about £30 million ($39 million).
To avoid UK taxes, Lewis moved to the Bahamas and began speculating in foreign currencies. His first big score came in 1992 after he bet on a falling British pound, the same trade that famously made Soros billions. Lewis went on to short the Mexican peso in 1995, profiting from that country’s economic crisis and turning his millions into billions.
Today, Lewis puts most of his fortune to work through Tavistock, the Bahamas-based holding company that has stakes in more than 200 businesses worldwide, including UK private lender Ultimate Finance, the Freebirds burrito chain and the five-star St. Regis hotel in Atlanta. He has a net worth of about $6.6 billion, and is among the richest people in the UK, according to the Bloomberg Billionaires Index.
Lewis also has owned stakes in two US firms cited in the charges against him — Mirati Therapeutics Inc. and Solid Biosciences Inc. — through his San Diego-based Boxer Capital fund, which targets investments in biotechnology.
Boxer reported stock sales and purchases in both companies totaling more than $250 million over the past five years, according to data compiled by Bloomberg from regulatory filings. While Boxer hasn’t disclosed a holding in Solid since last year, it still owned about $74.4 million of Mirati shares in March, making up a fraction of its $2 billion portfolio, filings show.
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Pilots Charged
Other firms cited in the charges include beef producer Australian Agricultural Co., where a trust controlled by Lewis is a major shareholder alongside mining billionaire Andrew Forrest. Lewis has held an indirect stake in the Queensland-based company since at least early 2014, with its shares rising about 12% in the period despite a slump in 2019.
That year, Lewis allegedly passed on tips about Australian Agricultural suffering losses to his personal pilots, Patrick O’Connor and Bryan ‘Marty’ Waugh, who have been charged criminally with securities fraud. Both pleaded not guilty.
In addition, the US Securities and Exchange Commission filed an insider trading lawsuit against Lewis, a former girlfrield and the two pilots.
Lewis keeps a low profile and rarely speaks in public, but isn’t afraid of displaying his wealth, occasionally guiding his superyacht, Aviva, down the River Thames when he visits London. He’s also amassed one of the world’s biggest private art collections and counts sports legends such as Tiger Woods and Ernie Els among his business associates.
One of his most successful bets was the 2000 purchase of Tottenham Hotspur, the Premier League football team based not far from where Lewis grew up. While the club hasn’t won a major trophy for years and may soon lose its best player, Harry Kane, it’s among a group of top clubs that has doubled in value since 2016 to at least €1.8 billion ($2.3 billion), according to research from KPMG. Over the years, Lewis has been spotted in the club’s stadium during games, typically in a long coat or suit and dark glasses.
‘Periphery Figure’
“A lot of Spurs fans consider Lewis a periphery figure, as somebody who works a lot behind the scenes,” said Simeon Daniel, co-owner of the club’s fan channel WeAreTottenhamTV. “He’s not a constant figure at the ground, which doesn’t help the perception that he’s only in it for the money.”
Not all Lewis’s bets have been successful. He lost more than $1 billion during the 2008 financial crisis after building up a major stake in Bear Stearns before JPMorgan Chase & Co. bought the crippled US securities firm. That led to Lewis making a rare public appearance, calling JPMorgan’s 2008 bid “a derisory offer.”
Lewis, who typically spends most of his time in the Bahamas, now becomes the highest-profile investor prosecuted this year for insider trading by the US Attorney’s Office for the Southern District of New York. Wearing a gray suit, white shirt and a dark tie, he spoke at the Wednesday afternoon hearing only to enter his plea. His lawyers declined to comment afterward.
“The stakes are high,” said Edward Imperatore, a New York-based attorney at law firm Morrison & Foerster and a former US prosecutor. “In a case like this even where Lewis did not himself benefit financially from the trading activity and alleged tipping, he faces the prospect of prison time.”
–With assistance from David Hellier.
© 2023 Bloomberg L.P.
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