Public Inquiry into application for: mixed-use

development including a new football stadium, retail,

residential and leisure uses on land in Kirkby

Proof of Evidence of KEIOC Campaign

Mark Grayson – Everton Football Club Shareholder

Reference: KEIOC/P/3
Planning Inspectorate Reference: APP/V4305/V/08/1203375

December 2008
KEIOC/P/3 Proof of Evidence - Mark Grayson

Contents

1.0 A Personal Background and Recent Events Pages 1 to 5

2.0 A Background to the EGM Pages 5 to 6

3.0 The Objective of Convening an EGM Pages 6 to 7

4.0 The Process of Convening an EGM Pages 7 to 9

5.0 The Outcome of the EGM Pages 9 to 12

6.0 Conclusion Pages 12

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1.0 A Personal Background and Recent Events

1.1 In order to understand my contribution to this inquiry I believe that it is important that the inquiry
reflect upon the events that have occurred at Everton Football Club over recent years and also
consider the future consequences for Evertonians who, as potential users of the proposed new
stadium, will be directly affected by the outcome of this inquiry.

1.2 My name is Mark Grayson, I am a 38 year old, degree qualified, Quantity Surveyor living in Mossley
Hill, Liverpool. I am an Everton Shareholder and Season Ticket holder. I am the son and grandson
of Evertonians and my children are currently undertaking the initiation to become fully fledged
Evertonians in the family tradition. I have been attending football matches at Goodison Park since
the mid 1970’s and for several years during the 1990’s I also worked as a Crowd Steward for the
club. Over the years I have watched Everton at Goodison Park from almost every possible vantage
point including the pitch, the press box and executive boxes. Whilst I have fond memories of
Goodison Park I realise that the club needs to upgrade its stadium facilities to bring it in line with its
contemporaries in the Premier League. However I am far from convinced that the Destination Kirkby
proposals are befitting a club of Everton Football Clubs standing nor in the interest of Evertonians,
Everton Football Club, the town of Kirkby and its residents.

1.3 As a committed Evertonian, I have become increasingly frustrated and concerned about the
decision making and direction that has been taken by the football club since the collapse of the
Kings Dock scheme 1 . There have been a number of well publicised events over the years that have
led me to observe the off-field affairs of the club as well as the action on the pitch. It is apparent that
the off-field financial performance of the club has a fundamental bearing on the quality and quantity
of playing staff and therefore the quality of football and excitement viewed on the pitch and as such
I consider the off-field affairs as essential to the future success of the club.

1.4 Much of Everton Football Club’s financial problems today can be traced back to the failure of the
Board of Directors to realise the Kings Dock opportunity. The Kings Waterfront Stadium was an
opportunity for Everton Football Club to own a half share in a truly world class £150m, 55,000 seat
stadium through the guise of Houston Securities for a contribution of just £30m 2 . The stadium was
to have a number of innovative features including a retractable roof, moveable pitch, moveable
stand and an underground car park and was to be located on the very accessible world heritage site
adjacent to the River Mersey and Liverpool City Centre. A ballot took place in which Evertonians
were given the opportunity to choose between the redevelopment of Goodison Park or a new

1
Appendix I – Guardian Article ‘Hopes Fade for Everton Stadium, dated 22nd February 2003
BBC Sport Article ‘Everton Fail in King’s Dock Bid’, dated 11th April 2003
2
Appendix II – BBC Sport Article ‘Vital backing for new Everton home’, dated 20th June 2001
Liverpool Echo Article ‘Dream Comes True for Bill’, dated 23 Jul 2001
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stadium at the Kings Waterfront. The outcome of the ballot 3 was overwhelmingly in favour of
relocating the club to the Kings Dock site with over 86% of those taking part 4 , including myself,
supporting the Kings Dock scheme. There was no doubt that the club had a clear mandate from its
fans given a choice between redevelopment and the new stadium at the Kings Dock.

1.5 Unfortunately, despite offering assurances 5 and being given extensions to provide financial
assurances 6 Everton Football Club was unable to raise its share in the development and the
opportunity failed to materialise 7 . Sadly, the failure to raise finances stems from the fact that the
Board of Directors at Everton had regrettably wasted funds on new player signings during the
summer of 2000 on the assumption that they would secure monies through a media deal with cable
television operators NTL 8 . Unfortunately the NTL deal, which was expected to yield up to £30m of
investment in the club, was not concluded 9 and as a result the club had to restructure its finances to
accommodate the existing £20m combined long and short term debt left by the previous board of
Everton and the new debt accrued when signing new players with money that the club did not have.
This resulted in a precarious financial position and subsequently led to Everton being unable to
raise the £30m required to fund the club’s stake in the stadium. Having witnessed the club reject the
proposed reverse mortgage 10 offered by then director, Paul Gregg, it appeared that the club was
about to engage in a boardroom battle 11 with Mr Gregg and his considerable resources attempting
to move the club forward whilst Mr Kenwright, backed by Mr Woods, with their relative lack of
resources, appearing to be holding the club back.

1.6 To compound the precarious financial situation the club continued to register substantial annual
loses despite significant increases in TV revenue and the sale assets and having noted that there
was little accountability from the 4 man Board of Directors Evertonians became concerned by the
clubs lack of ambition and investment 12 , insufficient and uncompetitive transfer budget and the
increasing level of debt. This situation led to tension between the board and shareholders
culminating in the EGM 13 of September 2004 during which Bill Kenwright assured shareholders
stating “ttonight we’ve got gathered together some of the most passionate Blues. That’s why you
own shares, I own shares, and we own shares. Not for profit or involvement. So, it might amaze
you to know this but I welcome tonight’s meeting because I know the sole reason it has been called

3
Appendix III – Kings Dock Ballot Brochure ‘Moving to a Vision in Blue’, November 2000
4
Appendix IV - Liverpool Echo Article ‘Blues’ Fans Yes to Kings Dock Move’, dated 27th November 2000
5
Appendix V - Liverpool Echo Article ‘ Kenwright Calls for Trust’, dated 4th December 2001
6
Appendix VI- BBC Sport Report ‘Everton Revive Stadium Move’, dated 18th December 2002
7
Appendix VII - Property Week Article ‘Cash Query Catches Everton Stadium Plans Offside, dated 6th September 2002
Daily Post Article ‘Everton FC’s £30m Stadium Challenge’, dated 30th August 2002
8
Appendix VIII - Liverpool Echo Article ‘The Deal that got away by two hours’, dated 5th October 2001
9
Appendix IX - Daily Telegraph Article ‘Smith to Stay at Everton’, dated 13th November 2000
Liverpool Echo Article ‘A Most Untimely On-Field Crises’, dated 3rd January 2002
10
Appendix X - BBC Sport Report ‘Everton Bid For More Time’, dated 5th December 2002
11
Appendix XI - Daily Post Article ‘Gregg Must Step Out of the Shadows’, dated 4th September 2002
Daily Post Article ‘Everton Kings Dock Bombshell’, dated 25th October 2002
12
Appendix XII - Daily Post Article ‘Blues Share Plan Backed’, dated 14th January 2004
13
Appendix XIII- Transcript of the 2004 EGM
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is to improve Everton Football Club”. Sadly, off the field, Everton Football Clubs situation has not
improved but has continued to worsen despite claims from the club to the contrary.
1.7 Subsequently problems emanating in the boardroom of Everton FC came to the fore most
dramatically in the summer of 2004 when the newly appointed CEO Trevor Birch mysteriously left
the club after just 6 weeks 14 whilst the relationship between the Directors appeared to have become
strained. This led to attempts by Paul Gregg in July 2004 15 to seize control of the club by offering to
buy out Mr Kenwright’s and Mr Woods’ shareholding for a reported £15m with the offer to invest a
further £15m through a rights issue 16 . Mr Kenwright and Mr Woods declined the offer stating that
they wanted to know who was behind the offer and wanted to see proof of funding 17 . A PR war
subsequently ensued with Mr Kenwright initially claiming to have found investment through Anton
Zingrevich 18 then miraculously through the Fortress Sports Fund investment proposals. These
proposals appeared within a few weeks of Mr Gregg going public in his attempts to buy the club and
this despite years of Mr Kenwright previously claiming to have been unsuccessfully searching ‘24/7’
for investment. Sadly, the issue with the Fortress Sports Fund was allowed to drag on 19 and on 20
until eventually most observers had began to realise that the Fortress Sports Funds proposals was
just a tactic to prevent Paul Gregg from seizing control of the club. To date, I do not recall any
official explanation as to why the proposals failed to materialise.

1.8 It later transpired through an email 21 issued by Ian Ross Everton’s Head of Communications and
External Affairs to an Everton Shareholder that the Fortress Sports Fund proposals were actually a
‘means to an end’ in order to prevent Mr Gregg from acquiring the club. The whole Fortress Sports
Fund episode was a sad and sorry episode in the history of Everton Football Club. It was a bleak
demonstration of the lengths individuals would be prepared to go to control Everton Football Club.

1.9 Unfortunately, having just avoided relegation the previous season and despite having a relatively
small squad the board of Everton failed to invest significant funds into the team with the acquisition
of just two lower league players for a modest sum of just £2m. This was a tremendous gamble by
the board considering the perilous performance of the club the previous season and yet against the
odds the relatively threadbare first team squad miraculously managed to rally together and produce
some outstanding results culminating in a fourth place finish and qualification to the Champions
League qualifiers. It was a phenomenal performance considering the boardroom turmoil that had
seen a CEO depart after 6 weeks, Mr Kenwright fending off offers for the club from Mr Gregg whilst
also negotiating the sale of the clubs most valuable asset, Wayne Rooney, who was sold to
Manchester Utd for a fee rising to £27m on the last day of the transfer window.. The timing of the

14
Appendix XIV - BBC Sport Article ‘Everton Chief Birch Resigns’, dated 16th July 2004
15
Appendix XV - Independent Article ‘Kenwright Gives Himself Four Days to Save Everton’, dated 27th July 2004
16
Appendix XVI - Independent Article ‘Gregg Pledges Cash for Moyes in Battle of Goodison’, dated 1st August 2004
17
Appendix XVII - Daily Post Article ‘Everton Man in the Middle Does a U-Turn’, dated 3rd August 2004
18
Appendix XVIII - Sunday Times Article ‘Geneva Financier Mounts Takeover Bid for Everton’, dated 19th September 2004
19
Appendix XIX - Liverpool Echo ‘Blues Wait for Fortress Money’, dated 21st December 2004
20
Appendix XX - Liverpool Echo ‘Gregg; I’m Not the Issue in Fund Farce’, dated 5th April 2005
21
Appendix XXI - Copy of Ian Ross’ email to Everton Shareholder Colm Kavanagh
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sale left the club with insufficient time to invest in the playing staff however it was interesting to note
that within a few days of the sale of Rooney, Everton FC paid off an outstanding £10m loan to
Singer and Friedlander 22 ; a loan that Mr Kenwright had previously described to concerned Everton
shareholders 23 as an ‘advance from Sky’.

1.10 The years following 2004 have seen dramatic increases in TV revenue and this has allowed the
club expand the level of borrowing to mask the financial concerns at the club. The club made great
play of the situation that saw Everton enter Deloitte and Touches top 20 clubs with the greatest
turnover however these stories drowned out the concerning issue of record levels of losses. On the
field the team has been successfully managed by David Moyes despite the lack of investment in
comparison with our contemporaries. The last published accounts for the period 2006/2007 stated
that the club had combined long and short term debt liabilities in the region of £60m 24 however this
figure fails to include the £11m spent to sign Yakubu Ayegbeni in August 2004. At this point it is
worth noting that the board had allowed the manager to break the club transfer record four times in
recent seasons however it is also worth noting that 2 of these record signings were subsequently
sold to help finance the further record signings.

1.11 Having resisted calls for investment it would appear that Bill Kenwright and his fellow directors have
not and have no intention of investing additional funds directly into the club. It is concerning that the
3 or 4 Directors that have been managing the club in recent years have been reluctant to implement
a rights issue to generate much needed funds. A £15m rights issue 25 was implemented in 1996 by
the much maligned previous custodian of the club, Peter Johnson, who already held majority control
of the club and who had nothing to gain personally by effectively diluting his shareholding to raise
funds for the benefit of the club. His rights issue was supported by the 10 Directors of the club at
that time. It is important to stress that a rights issue does not have to be underwritten by a wealthy
benefactor as Norwich City 26 demonstrated by generating funds without the requirement for the
rights issue to be underwritten. There is nothing to prevent the 4 Directors of Everton Football Club
implementing a rights issue and tapping into the clubs greatest remaining asset - its fans. Given the
apparent reluctance to implement a rights issue to raise funds Evertonians have became
increasingly suspicious as to why the club have not utilised this route to generate revenue. Some
Evertonians are uneasy over the lack of progress with this matter and believe that it is unhealthy for
the future of the club to be dictated by a small group of individuals rather than a broad, diverse and
accountable Board of Directors with the clubs best long term interest at heart. Sadly, the current
board have managed the club without providing any direct investment into the business, they have
relied on the systematic sale of existing assets, including a reported £45m worth of youth talent, and

22
Appendix XXII - Companies Form 403a, dated 2nd September 2004
23
Appendix XXIII - Toffeeweb Article ‘Finally the £10.4m truth’, dated 14th January 2005
24
Appendix XXIV - Everton Football Club Company Limited 2006/2007 Annual Report and Accounts
25
Appendix XXV - 1996 Six for One Rights Issue of 30,000 new shares of £1 each at £500 per share
26
Appendix XXVI - Norwich City Official Website ‘Share Offer and Annual Accounts Announced’, dated 5 Dec 2003
KEIOC/P/3 Proof of Evidence - Mark Grayson Page 5 of 12

increased borrowing in order to provide modest investment into the playing staff and maintain their
position at the helm of Everton Football Club.

1.12 Evertonians, including myself, consider that the current board of Everton Football Club have
deliberately overlooked external investment in order to retain a large controlling stake in the club.
The conclusion in doing so is that Everton Football Club is being denied much needed investment
and the suspicion is that the current board are doing so for their own purposes, perhaps in order to
maximise the return of their shareholding when the club is eventually sold on to new, external
investors.

2.0 A Background to the EGM

2.1 Having followed the debate on the Kirkby relocation issue I became deeply concerned about the
information being provided by the club 27 and by the wisdom of relocating Everton Football Club to
Kirkby. Furthermore I was concerned why the club failed to offer an alternative to the Kirkby
proposals as was the case with the Kings Waterfront ballot 28 . As a result, in August 2007, I decided
to attend meetings and become an active member of the KEIOC group.

2.2 I believed that the information being provided by the club at the time of the ballot was at best
inaccurate and at worst deliberately misleading. I felt that the local media coverage, perhaps
influenced by commercial agreements with the club, was biased in an attempt to influence the
outcome of the ballot. I even contacted the editor of the Liverpool Echo to complain about its
coverage of the whole affair and he admitted to me that they had published articles in the midst of a
‘fierce PR campaign’.

2.3 As a shareholder I felt that I was in a privileged position in the sense that I was able to pose
questions to the Board of Directors that Everton fans were beginning to ask in private. I felt it would
be beneficial to have a public debate about the situation with the ground move as it had become
apparent that Evertonians en masse were now concerned with the reality of the situation and the
fact that the club was pursuing something vastly different to that what was originally promised. In
essence the board promised Evertonians a ‘world class’ and ‘effectively free’ stadium with the best
served transport infrastructure of any stadium in the UK. The reality, if it ever transpires, will be
something completely different. The planning application described the stadium as a ‘mid level
quality’ stadium, the cost to Everton football club we be in the region of £78m and the transport
proposals are very concerning with plans for fans to walk for up to 45 minutes (each way) to get
from their cars to the ground. I have yet to see any reference to how disabled supporters will get to

27
Appendix XXVII - An Extract from the Official Matchday Programme, dated 11th August 2008
28
Appendix XXVIII - Destination Kirkby Ballot Literature ‘The Future for Everton’
KEIOC/P/3 Proof of Evidence - Mark Grayson Page 6 of 12

the ground. The idea that supporters would be penned into supporter queuing reservoirs with a
density of 4 people per m2 for over an hour was something that was abhorrent to me.

2.4 Another factor in my decision to pursue an EGM to discuss the Kirkby issue was the fact that 40%
of those who voted in the Kirkby ballot registered their opposition to the Kirkby proposals and this at
a time when Destination Kirkby was portrayed as a ‘once in a lifetime opportunity’ pleading with
Evertonians to ‘Not Let the Club Get Left Behind’. It is somewhat ironic that Evertonians have been
exposed to two ‘once in a lifetime opportunities’ within the space of a few short years. In contrast to
the Kings Waterfront ballot and given the stark choice of facing a bleak future at Goodison Park or
progression with the Destination Kirkby stadium many Evertonians still chose to reject the clubs
proposals. It was clear to most observers that the club could not sensibly claim to have a mandate
when such a large proportion of our fan base was opposed to the move. Furthermore, the result of
the ballot was not conclusive and the Destination Kirkby proposals would not have been carried had
just 2,382 fans voted to reject the Kirkby proposals rather than support it.

3.0 The Objective of Convening an EGM

3.1 The purpose of the EGM was to allow shareholders the opportunity to discuss the proposed move
to Kirkby once the facts concerning the ground move had come to light through the planning
application. Evertonians and Shareholders had numerous questions about the reality of the
Destination Kirkby scheme whilst an EGM afforded the Board of Directors the opportunity to praise
the benefits of the scheme and allay Evertonian concerns.

3.2 The intention was for the board of Everton to allow shareholders a traditional ‘show of hands’ vote
at the end of the evening as had been the case on previous occasions. We expected that the club
would welcome debate on the issue after all it was an issue of utmost importance as the club and
Evertonians will be affected by the move for many years to come.

3.3 Our objective was to request that the club go back to the fans and hold a fresh ballot now that the
notion of a ‘World Class’ and ‘Effectively Free’ stadium had been disproved by the information
detailed in the planning documents. As discussed in Section 2.4, I felt that the club had a very weak
mandate which was obtained through aggressive public relations tactics and frankly, what many
perceived to be emotional blackmail. We had also noted the results of internet polls which showed
that people no longer favoured the move to Kirkby and we anticipate that if a new ballot was
conducted the result would be dramatically different. We expect that if the club went back to the
fans with another ballot over the issue the fans would resoundingly reject the Destination Kirkby
proposals.
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3.4 It was hoped that if the Board of Directors were exposed to our concerns during the EGM then they
may agree that the proposals were not beneficial to Evertonians and Everton’s long term prosperity
and as such would withdraw from the scheme. We hoped that a rejection of the scheme by
shareholders would give the company the opportunity to free itself from the restrictive exclusivity
deal with Tesco and Knowsley Council.

3.5 We had also hoped that the media attention generated by the EGM would alert other Evertonians
and the wider community to the concerns with the Destination Kirkby proposals.

3.6 I understand that KEIOC would be prepared to pay for a further ballot should planning approval be
granted and should the club wish to re-consult with fans. Unfortunately, I do not believe that the
board will approach the fans again having fought so hard to secure their ‘mandate’.

4.0 The Process of Convening an EGM

4.1 Prior to issuing correspondence to shareholders both Tony Bennett, the co-sponsor of the EGM
petition and myself met in private with representatives of the two shareholder associations in order
to gain universal support from the committee’s of both associations. Unfortunately, as a result of a
disagreement, members of the original 1938 Shareholders Association felt compelled to set up an
alternative shareholders group, the 2006 Shareholders Association. I believe that this event was
detrimental to the well being of the club and was influenced by the Board of Everton Football Club in
order to create a division amongst shareholders and weaken any potential opposition to the current
board. Having discussed the situation with prominent members of both associations we thankfully
received the support of the committee’s of both shareholder groups to press ahead with our petition
for an EGM to discuss the Kirkby debate. As a result of this process we hope that the two
shareholder associations will soon be reconciled to offer shareholders a united and powerful voice.

4.2 In order to raise support for our petition to shareholders I wrote and issued a 6 page document 29
addressing both mine and Tony’s concerns regarding the Destination Kirkby proposals and we
included a requisition form to all shareholders that were identified on a shareholder database at the
end of June 2008. The packs went out with stamp addressed envelopes for shareholders to return
their completed requisition forms.

4.3 In order to force the club to convene an Extraordinary General Meeting we required the support of
at least 20% of the shareholders of the company. This meant that we required the support of at
least 290 shareholders of the 1,400 or so shareholders. We issued approximately 1,200 packs but
given the costs involved we refrained from issuing packs to those shareholder accounts held in the

29
Appendix XXIX - Copy of the Pre EGM Requisition Form and Literature, dated June 2008
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names of trustees and executors. Unfortunately, our records were also outdated and we had
numerous problems with EGM packs being returned to us as some shareholders had since moved
since the list was compiled. In addition, it later transpired that we were unaware of the 100 or so
new shareholders that had acquired shares in the company since our list was produced. Despite
this, I believe that the level of support for the EGM was very good and we had over 330 signatories
endorsing our petition when it was submitted to the club and at the last count, we had received the
support of over 400 shareholders.

4.4 The petition was presented to Martin Evans, the Company Secretary, on the morning of the 18th
July 2008. The document was carefully hand delivered to the club in a waterproof Tesco carrier bag
for added protection and the individual paginated requisition forms collated in alphabetical order
with a referenced summary sheet to make verification of the validity of the document much easier
for the club to check.

4.5 Upon submission, the club provided a receipt for the document and advised that they would
respond to us in due course. On the 5th August 2008 I received a call from Robert Elstone who had
just been appointed Acting CEO following Keith Wyness’ sudden and unexplained departure 30 from
the club. Mr Elstone confirmed the date when the EGM was to be held and also suggested that both
Tony Bennett and myself attend Goodison Park to discuss the etiquette to be observed on the night
of the EGM.

4.6 A meeting took place between Robert Elstone, Acting CEO of Everton FC, Sue Russell from
Halliwells LLp representing the club, myself, Tony Bennett and Philip Treanor from Pannone LLp
who was representing both Tony and myself. During the course of the meeting Mr Elstone made it
clear that the EGM was convened purely to discuss the Kirkby issue and warnings were given that
the EGM would be cut short should the meeting stray to other matters such as the delay in David
Moyes signing his contract, lack of investment etc.

4.7 During the course of the meeting Robert Elstone and Sue Russell made it clear that the Board of
Directors would not allow a traditional ‘show of hands’ vote on the Kirkby issue but would rather go
straight to a poll vote which would lead to guaranteed success for the 3 major shareholders with
their combined 75% shareholding. We argued that the clubs own Articles of Association 31 state that
a “A resolution put to the vote of a meeting shall be decided on a show of hands unless before, or
on the declaration of the result of the show of hands a poll is duly demanded.” but this was
dismissed by the Club. We believed that the club could not go to a poll vote until there had been a
show of hands however the club was adamant that the meeting would move straight to a poll vote.

30
Appendix XXX - BBC Sport Article ‘Everton Chief Executive Resigns’, dated 30th July 2008
31
Appendix XXXI - Articles of Association (since amended)
KEIOC/P/3 Proof of Evidence - Mark Grayson Page 9 of 12

4.8 As minor shareholders we were advised that we had little influence over proceedings and that our
only recourse would be to inconvenience the Board into attending further EGM’s. In light of the
clubs intransigence and as we were powerless to take any further action we duly advised the club
that if they failed to offer shareholders a ‘show of hands’ vote we would be forced to issue a further
petition to discuss the general off-field running of the club. We subsequently issued a further
petition 32 with further literature updating shareholders of the events since we submitted the original
EGM petition. 5,000 copies of an extended version of this document were circulated amongst
Evertonians at the home game with Portsmouth on the 30th August 2008.

4.9 As Liverpool City Council passed a unanimous, cross party, resolution to endorse the proposals that
Liverpool City Council would do everything it could to help Everton Football Club find a solution to
its stadium needs within the city boundaries, we invited both Warren Bradley, Liberal Democrat
Leader of the City Council and Joe Anderson, Labour Leader of the Opposition to speak at the EGM
to which they both agreed to do and both attended. Their contribution to the EGM can be found in
the transcript.

4.10 The process of convening an EGM appeared to be a contributing factor to the mysterious and as
yet unexplained departure of former Chief Executive, Keith Wyness. Arcadia Retail boss Sir Philip
Green 33 has long since been linked with a behind the scenes influence at Everton FC however
recently published articles have attributed Wyness’ departure to the growing influence of the
Arcadia Retail Billionaire 34 .

5.0 The Outcome of the EGM

5.1 The outcome of the EGM was a formality with the wishes of the majority shareholders carried on a
poll vote basis. The votes of Bill Kenwright controlling 8,753 shares, Robert Earl (8,146), Jon
Woods controlling (6,622), Arthur Abercrombie (1,935) and Sir Philip Carter controlling (714), with
their combined shareholding of 26,170 shares won the day and the result was 26,553 against our
resolution with 622 for 35 .

5.2 Regardless of the fact that our motion was defeated it was clear that the moral victory was ours.
The majority of returned voting forms endorsed our calls for the immediate withdrawal from the
Destination Kirkby scheme. Had there been a traditional show of hands vote as we requested our
resolution would have been passed. The Directors of the club are now under no illusion that
shareholders do not support the Boards Destination Kirkby proposals. Sadly, the use of the poll vote

32
Appendix XXXII - Copy of the 2nd EGM petition and Accompanying EGM literature
33
Appendix XXXIII - Evening Standard ‘Green at Heart of Everton Battle’, dated 27th October 2006
34
Appendix XXXIV - Daily Mail ‘Wyness Exit Leaves Green to Hold Sway’, dated 2nd August 2008
Liverpool Echo ‘Everton FC, Blues Fans and the Credit Crunch’, dated 5th August 2008
The Times ‘Disquiet Grows over Keith Wyness Exit’, dated 6th August 2008
35
Appendix XXXV - Everton FC Official Website ‘EGM Resolution Defeated’, dated 3rd September 2008
KEIOC/P/3 Proof of Evidence - Mark Grayson Page 10 of 12

makes a mockery of the notion that Everton FC is ‘The Peoples Club’ and it was disappointing to
see Robert Elstone exploiting the result the following day to imply that the Club have a clear
mandate 36 . The Board of Directors gave themselves the mandate to continue with the scheme, not
the majority of shareholders who voted at the EGM. Everton Football Club is clearly the property of
the major shareholders who will do with it whatever they see fit. They are clearly prepared to push
these proposals through against the wishes of the majority.

5.3 With regards to the events of the evening, the club produced a well choreographed EGM in which
Mr Elstone consumed 30 minutes of the allotted time with a presentation to explain the business
case for Kirkby and why Goodison Park could only be redeveloped at a cost in excess of £200m. As
a Quantity Surveyor I believe that it was clear that what the club were proposing was not ‘like for
like’ with that being proposed in Kirkby. It is apparent to me that the club or at least the clubs
advisors, notably Mr Kierle of KSS, whose company will be awarded up to £30m worth of fit out
work if Destination Kirkby is given planning approval, are trying to play down the prospects for the
redevelopment of Goodison Park, perhaps to ensure that they and their business’ benefit from the
Destination Kirkby scheme?

5.2 I remain unconvinced by the figures presented by Mr Elstone at the EGM and believe that it is
questionable how the club can build a 50,000 seat stadium in Kirkby for a sum in the region of
between £2,000 and £2,600 per seat when what was being proposed for the redevelopment of
Goodison equated to £6,000 per seat. I have asked Mr Elstone to provide a cost sum analysis
explaining how these figures have been calculated but he has declined to provide this information. I
see no reason why the club cannot provide this information to the inquiry unless of course it is
deeply flawed.

5.3 Upon completion of Mr Elstone's presentation and a short statement by Mr Kenwright I was invited
to commence the questioning of the board. Mindful of Mr Elstone's threat to cut short the meeting I
decided to ask a question which I firmly believe is at the heart of this whole affair but associate it
within the parameters of the stadium debate. I posed a question 37 to Mr Kenwright suggesting that
the board are pursuing the Destination Kirkby proposals for their own benefit rather than that of the
club and that should the club be taken over by a new wealthy benefactor as had been the case
twice in the past 18 months with Manchester City, the new benefactor would not even consider
moving the club from a central site to an inadequate location on the fringe of the urban area.

5.4 Mr Kenwright responded passionately and convincingly when he stated that he would sell the club
tomorrow if a billionaire 38 investor was to show an interest in the club. Furthermore, Mr Kenwright

36
Appendix XXXVI - Everton FC Official Website ‘Elstone on Clear Mandate’, dated 4th September 2008
37
Appendix XXXVII - Extract from the verbatim minutes of the 2008 EGM
38
Appendix XXXVIII - Official Everton FC website ‘Kenwright’s Billionaire Wish’, dated 3rd September 2008
Daily Post Article ‘Everton Pledge to Fight on for Kirkby Stadium’, dated 4th September 2008
KEIOC/P/3 Proof of Evidence - Mark Grayson Page 11 of 12

admitted that both he and the club have no money and that he had found it difficult to raise the
funds to buy players during the summer transfer window. Mr Kenwright also admitted that he does
not want to be standing before shareholders in another 12 months, stating that he would sell the
club within weeks if it were possible. Finally, Mr Kenwright stated that he had instructed Mr Keith
Harris of Seymour Pierce to find a buyer for the club.

5.5 Other issues were raised by different individuals during the course of the EGM most notably
concerns were raised over the quality of the stadium and with the business plan as shareholders
remain concerned that the business model will fail once the ‘new stadium effect’ diminishes.
Fundamental concerns were also raised over the inadequacies of the transport proposals and the
issues associated with spectators being expected to walk for 45 minutes to get from their cars and
to the ground. In addition, a more interestingly, questions were asked about Sir Philip Green‘s
association with the club and the possibility that Arcadia will be involved with the retail side of the
Destination Kirkby scheme.

5.6 Having reflected on what was said during the EGM, it is clear to me that the Board of Everton have
nothing to offer Everton FC, they cannot take this club any further and I believe that the club is now
on the limits of its borrowing. I absolutely believe that the board of Everton are now just loitering in
anticipation of selling the club with planning permission 39 and at a premium price 40 obtained through
the £52m subsidy that will add value to their shareholding. In my considered view, this is what the
major shareholders of Everton FC find so appealing about the Destination Kirkby proposals,
increasing the value of the club prior to its sale. Furthermore Section 8.6 of the ‘Proposed Stadium
for EFC’ report by DppLLp confirms that ‘the Directors of the club recognise the need to strengthen
the balance sheet in the short term’. Why would they wish to strengthen the balance sheet just in
the short term?

5.7 Robert Elstone’s comments to this public inquiry, that to the ‘best of his knowledge’ there are no
buyers for the club, fail to address the issue. Let us be clear, Robert Elstone is not selling the club;
the major shareholders, Bill Kenwright, Robert Earl and Jon Woods will privately negotiate the sale
of their own shares. They will do so behind closed doors, in private and away from this inquiry. It is
perfectly logical to conclude that these individuals will benefit by many millions of pounds should
planning permission be granted for this scheme and sadly this benefit will be gleaned from the
taxpayers of the deprived area of Kirkby.

39
Appendix XXXIX - The Observer ‘Everton Sale if Stadium Gets Go Ahead’, dated 3rd August 2008
40
Appendix XXXX - BBC Sport ‘Everton on the Verge of Sale’, dated 10th October 2008
KEIOC/P/3 Proof of Evidence - Mark Grayson Page 12 of 12

5.8 As a result of the EGM, it is alarming to note that the five major shareholders, identified in Section
5.1, with their 75% stake in the company have since amended the clubs Articles of Association 41 in
order to stifle any further debate on this issue.

5.9 The club have also recently delayed the publication of the clubs accounts to the end of May 2008;
these are usually issued to shareholders by late October, early November. Furthermore it would
appear that the Board of Directors have no intention to convene an Annual General Meeting to
discuss the clubs accounts and off-field performance. These meetings are usually held in the first
week of December. This is somewhat disconcerting given the clear instruction from Mr Elstone that
the EGM would only encompass debate on the relocation issue. It would appear at this present
moment in time that the Board of Directors are denying shareholders the opportunity to discuss the
accounts and off-field performance of the club during the 2007/08 financial year. As stated in 5.6 I
believe that the board of Everton Football is exhausted and appears to be running from the fact that
they are acting against the wishes of the majority of shareholders. I would reiterate my conclusion
that the major shareholders of Everton Football Club are awaiting the decision of this inquiry prior to
selling their shares.

6.0 Conclusion

6.1 I do not believe that the Destination Kirkby proposals will be in the best long term interest of
Everton Football Club and its supporters, nor the town of Kirkby and its residents. I believe that
the main beneficiaries of the Destination Kirkby proposals are the major shareholders of Everton
Football Club.

41
Appendix XXXXI - Official Everton FC website ‘Club Statement’, dated 10th September 2008
Liverpool Echo ‘Everton EGM Ruling Grounds to Make a Point’, dated 12th September 2008