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Hearts owner's company goes into administration

SUPPORTERS and politicians have demanded answers after Hearts owner Vladimir Romanov's company, Ukio Bankas, was put into temporary administration.

CAUSE FOR CONCERN: Vladimir Romanov, inset, owns nearly 65% of Ukio Bankas, which formerly sponsored Hearts' team kit.
CAUSE FOR CONCERN: Vladimir Romanov, inset, owns nearly 65% of Ukio Bankas, which formerly sponsored Hearts' team kit.

The Edinburgh club moved to reassure supporters that the legal act by the Bank of Lithuania will not affect the day-to-day running of the club as it is owned by the sister company of Ukio Bankas called Ukio Banko Investicine Grupe (UBIG).

However, concerns have been raised over the close association of UBIG and Mr Romanov as Ukio Bankas was suspended when it was ruled it had engaged in risky behaviour and no longer met finance requirements.

Mr Romanov, who owns 64.9% of Ukio Bankas shares, is chairman of the UBIG board and also reported to be at least part owner of that company.

The stock exchange in Vilnius said it had suspended trading of Ukio shares at the central bank's request.

Alex Mackie, chairman of the Foundation of Hearts, which has a long-standing aim to buy the majority shareholding in the Tynecastle club, said it was due to meet next Monday to discuss its next steps as it weighs up a fresh offer following a previous rejection.

He said: "I want to assess exactly what is going on and what it means for Hearts and for the foundation before I say too much more. But what I would say is this is certainly a major event."

Hearts fan Lord Foulkes and Edinburgh Labour MP Ian Murray called for greater clarity over the future of the Scottish Premier League club, almost one year to the day since Rangers went into administration.

Lord Foulkes said he and Mr Murray "are now in touch with various parties to find out the full implications of today's development and how the interests of Hearts can best be protected and developed".

However, Steve Kilgour, secretary of the Federation of Hearts Supporters' Clubs, is hopeful the problems being suffered by Ukio Bankas will not trigger a domino effect in other parts of Mr Romanov's business empire.

Mr Kilgour added: "I'm pretty confident this will not have any immediate impact on Hearts.

"We are not owned by Ukio Bankas, we are owned by UBIG and the bank is a division of that firm, the same as Hearts are and Romanov's aluminium plant is."

Sergejus Fedotovas, director of Hearts, said: "The board wishes to make it clear that Heart of Midlothian plc and Ukio Bankas are two separate companies.

"Hearts is majority owned by Ukio Banko Investicine Grupe, a multi-national business conglomerate. UBIG is an entirely separate entity and stands alone from Ukio Bankas.

"At a service and operational level, Ukio Bankas does provide the club with some banking services and debt facility and the board is liaising with Ukio Bankas on these matters.

"The supporters of Hearts can be assured that the board of the club continues to be diligent in financial matters and we believe that today's events in Lithuania will have very little affect on our day-to-day business."

UBIG was also said to have last month taken advantage of a new Lithuanian law allowing the company to pledge all of its assets as collateral "for a purpose it has not disclosed".

Last year, Hearts settled an issue with HMRC by agreeing to pay £1.5 million over three years.

Players had to voluntarily defer their wages for weeks. The club have also raised £1m through a share issue scheme. Some 4000 supporters signed up, but there remains a shortfall of almost £800,000.

Fans were despondent on supporters websites, with one posting: "This is the end."

Another wrote: "If UBIG are reliant upon Ukio for its banking and credit facilities there must be a real concern about its ability to continue to operate."

Ukio Bankas reported last October a net loss of around £12m for the first nine months of 2012.

Ukio has had to deal with investor concerns about the quality of its loans, the valuation of real estate it owns, and probes into the alleged laundering of embezzled Russian money through its accounts.

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