A High Court judge today ordered a hearing into whether the administration keeping Portsmouth afloat as a Premier League team was validly appointed.
The new twist in the rocky fortunes of the club came after a challenge by the taxman to the administration and the judge ruled the "shadow over the appointment should be removed".
Gregory Mitchell QC, representing HM Revenue and Customs (HMRC), told High Court judge Mr Justice Norris Portsmouth is a "well-loved club with a long and successful history", adding: "The question we ask, and supporters and members of the public ask, is how is it possible that this once-great club has become insolvent with liabilities exceeding assets by a figure of £65 million?"
He said HMRC wanted to know how a "succession of owners of the club have allowed such enormous debts to accrue".
"We say that there are serious questions which arise and require a full investigation into the financial dealings between the various owners of the club, which at the moment are shrouded in mystery. If this club can be rescued by a process of administration, then that is to be welcomed by all, including HMRC."
Mr Mitchell said HMRC's support for the plans to rescue the club were qualified by concerns.
"Have these administrators been validly appointed?" he asked the court. "The question of validity is a fundamental issue and that has to be determined one way or the other as quickly as possible."
He said if the administration was invalid, then the administrators could not act for the club. Any funds to support the administration would come from Hong Kong businessman Balram Chainrai who has a controlling interest in the club, he said.
"Our concern is that there should be a full and independent investigation of the position and the transactions between the club and Mr Chainrai.
"We say that if there is no proper evidence of funds having been provided to the administrators to meet the club's financial needs, then there is a real danger the administration will fail to achieve the proper purpose."
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