Super League club Salford have three victories taken away by RFL, which says: "This is in line with the regulatory backdrop and competition framework applicable in 2013. With no relegation or promotion, a points deduction would have affected only a club’s finishing position."
Tuesday 3 November 2020 19:08, UK
Salford have been deducted three wins by the Rugby Football League following the club's failure to meet the terms of a financial commitment they agreed to almost eight years ago.
The punishment goes back to January 2013 when the Salford Football Club (1914) Limited entered into a Company Voluntary Arrangement (CVA) and the RFL approved an application for membership by a new company, Salford City Reds (2013) Limited, on condition that the club fulfil the terms of the CVA.
The agreement was that, if the CVA failed, then the new club would be deducted six points in the playing season in which the default occurred and confirmation came on October 22 when a certificate of non-compliance was issued by a licensed insolvency practitioner.
The sanction became three wins rather than six points following the RFL's decision to determine league placings by win percentage and takes immediate effect, dropping the Red Devils from eighth to 10th in the table.
It means Ian Watson's team can no longer finish seventh and, therefore, will no longer be on standby for the expanded play-offs announced earlier on Tuesday by the Super League board.
In 2015 - following the reintroduction of relegation and promotion - the RFL increased the sanction for financial irregularities from six to 12 points but the updated policy applies only to insolvency events since 2015.
The RFL statement read: "Salford Red Devils have been deducted three wins (the equivalent of six points during a season decided on points rather than percentage wins) following the club's failure to meet the terms of a financial commitment agreed to in 2013.
"In January 2013 the Salford Football Club (1914) Limited entered into a Company Voluntary Arrangement (CVA). An application for RFL membership by a new company, Salford City Reds (2013) Limited, was subsequently approved by the RFL Board. A condition of the membership was that the Club fund the CVA of the old company and that, if the CVA fails, then "the new Club would be deducted 6 points in the playing season in which the default occurs".
"The CVA has now failed, as confirmed by a 'certificate of non-compliance' issued by a licensed insolvency practitioner on October 22, triggering the RFL Board sanction. It is important to note, however, that this 'insolvency event' does not relate to Salford City Reds (2013) Limited and does not impact any of that company's debtor or creditor relationships.
"The three-win deduction takes immediate effect. This is in line with the regulatory backdrop and competition framework applicable in 2013. With no relegation or promotion, a points deduction would have affected only a club's finishing position. Salford finished in 14th (bottom) in Super League and therefore a sporting sanction at that time would not have affected the club's final position.
"In 2015 the RFL Board amended its Insolvency Policy following the reintroduction of relegation and promotion, increasing the sporting sanction from six to 12 points (with strictly limited exceptions). The updated policy applies only to insolvency events since 2015."
