Owner Michael Glazer tried to hide finances before Man United IPO

Manchester United owner Malcolm Glazer is so loathed by fans that some once burned an effigy of him. They might hate him even more if they learn how he tried to hide the true state of the club's finances before their August initial public offering.

The struggle to keep secret the material risks the club face is detailed in letters between United executives and the US Securities and Exchange Commission before its August IPO. The SEC demanded and got more disclosure about team losses, debt and benefits for Glazer and members of his family.

What investors and fans were not able to see until a month after the club raised US$233 million selling shares, was the resistance of the owners behind-the-scenes to disclosing more transparent earnings data, details about Glazer's debt and what the IPO money was to be used for.

The full story of the correspondence, posted on the SEC's website without fanfare in September, has not been previously reported to investors or fans.

"The Glazer names are still toxic among hard-core United fans who are well aware of what they have done to Manchester United," said Duncan Drasdo, who runs the 187,000-member Manchester United Supporters Trust. "Despite more recent purchases over their tenure they have created a ticking time bomb of under-investment in players."

The SEC-United letters show seven Glazer family members have kept almost total control of the club after the IPO, saddling the team with higher taxes to evade potential shareholder lawsuits by incorporating offshore. The club reported a loss in their first quarterly financial results after the IPO as the team failed to win a trophy either in domestic or European competition this year.

The negotiations between the SEC and the club, the world's most valuable sports brand, according to Forbes magazine, are typical of the regulator's reaction to an initial IPO prospectus that is found wanting in alerting investors to the risks of buying new shares.