Middlesex have been plunged into further controversy after it emerged they were embroiled in a bitter legal battle with Richard Goatley, their former chief executive, over alleged unauthorised payments to himself totalling tens of thousands of pounds.

The county have spent recent years in a state of grave financial uncertainty and were sanctioned by the England and Wales Cricket Board this month after they were found to have “been financially mismanaged over a number of years”.

They have now confirmed they have opened legal proceedings against Goatley, who branded the claims “spurious and denied” and has threatened to counter-sue for breach of contract. It is understood that Middlesex had hoped to reach an amicable settlement with Goatley, who is battling with ill health, but that now appears unlikely.

In a statement on the club’s website, they said: “There are ongoing legal proceedings between the club and its former CEO. Unfortunately, we consider that improper attempts are being made to influence those proceedings by leveraging, and indeed misleading the media.”

In 2021, Goatley left Middlesex after 16 years – including six as CEO – having suffered a minor stroke. By then, the club’s financial issues were beginning to become evident.

Middlesex recorded a loss of £952,000 up to the end of 2021, which reduced their net assets to £179,000, down from around £2 million two years earlier.

The club made an error in pension payments, which saw employees’ pensions wrongly paid for 12 years, which eventually cost Middlesex £500,000 at a time when the coronavirus pandemic was already causing a pinch on their resources.

As a result, this month, Middlesex were effectively placed in “special measures” by the ECB after a long investigation concluded that they had breached financial regulations. 

The investigation is understood to have found that Middlesex had used funds from the governing body ring-fenced for the recreational game and players pathways on the men’s first team.

Most of the punishments were suspended (with the exception of a £50,000 fine), pending the club adhering to an ECB-imposed business plan over the next two years.

A Middlesex statement expressed disappointment with the outcome but expressed a desire to “draw a line” under the matter.

The ECB are understood to have been aware of Middlesex’s allegations against Goatley almost a year ago – before they opened their investigation into the club’s financial management – raising questions about what action, if any, they had taken since.

As both chief executive and financial director, Goatley was, for a time, the sole signatory on Middlesex’s accounts, in a breach of best-practice corporate governance.

The club recently concluded a long search for a new chairman by appointing Richard Sykes, the man originally charged with leading the process to fill the position.