Manchester City’s Champions League future at risk as UEFA investigates possible financial violations

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European football’s governing body is investigating City for possible breaches of its Financial Fair Play (FFP) regulations, UEFA said Thursday.

“The investigation will focus on several alleged violations of FFP that were recently made public in various media outlets,” UEFA said.

Der Spiegel has reported, citing club documents gathered by the independent Football Leaks investigative project, that the club reportedly inflated sponsor fees, if the club spent more than expected, the German outlet said.

CNN has not seen the documents referred to in reports from Der Siegel, which was first to report the accusations of financial improprieties.

City is owned by an investment vehicle of Abu Dhabi royal Sheikh Mansour bin Zayed al- Nahyan; Der Spiegel alleges that investment violated FFP regulations as it was disguised as sponsorship from Etihad Airways, the flag carrier of the Emirate.

Etihad is the club’s shirt sponsor, and also has naming rights for its stadium.

The club also allegedly concealed a player investment fund, which would allow the club to hold equity in promising players — so-called “third-party ownership (TPO), something banned by UEFA and the Premier League — by using a company in the Cayman Islands, the newspaper reported.

FFP rules are supposed to stop clubs getting into unmanageable debt, or allow wealthy benefactors to give top teams an unfair advantage.

In a statement on its website City said it saw the inquiry as “an opportunity to bring to an end the speculation resulting from the illegal hacking and out of context publication of City emails. The accusation of financial irregularities are entirely false.

“The club’s published accounts are full and complete and a matter of legal and regulatory record.”

Major punishment

Should the allegation be proven, the “heaviest punishment” that UEFA could hand down is “exclusion from UEFA competitions,” Yves Leterme, the chairman and chief investigator of Uefa’s club financial control body (CFCB), said earlier this year.
The Champions League, Europe’s flagship competition, is hugely prestigious — and lucrative. Lifting the trophy — something that has eluded City thus far — is estimated to earn the winning club over $90 million.

City currently leads the Premier League table, with 71 points from 29 games, and is battling Liverpool, one point behind on 70, for top spot with nine games to play.

Pep Guardiola’s team is also expected to reach the Champions League quarterfinals after beating Schalke 3-2 in the first leg in Germany. It recently won the League Cup and is still in the FA Cup as City chases a quadruple of titles.

Manchester City forward Raheem Sterling celebrates after scoring against Schalke in the Champions League in February.

The top four teams from the Premier League qualify for the following season’s Champions League; with a 13-point buffer between it and crosstown rival Manchester United in fourth, City is all but guaranteed a top-four finish this season.

Vincent Kompany and Sergio Aguero of Manchester City lift the Premier League trophy following their win over Huddersfield Town at the Etihad Stadium.

Whistleblower to be tried

Der Spiegel’s investigation relied on documents provided to it by Football Leaks, a whistleblower organization, which obtained 70 million confidential and, in some cases, highly sensitive documents.

Rui Pinto, the leaker at the heart of Der Spiegel’s investigation, is to be extradited from Hungary to his native Portugal, according to reports, where he faces cybercrime charges relating to the hacking of emails from Benfica, Sporting Lisbon and Porto, three leading Portuguese clubs.
In an interview with the German newspaper, Pinto said that he is “a citizen who acted in the public interest. My sole intention was to reveal illicit practices that affect the world of football,” and that his initiative was aided by others who contributed documents.

Ahead of his hearing he tweeted that it would “serve as a barometer for what the EU wants: A fight against corruption and tax fraud vs the criminalization of whistleblowers, unfair trials, conflicts of interests and influence peddling.”

Recurring allegations

City was punished in 2014 for FFP violations. At the time the club said it would accept punishments including a fine of €60 million ($67 million), a restriction on transfer spending and a reduction in the club’s squad size for the European Champions League.

Manchester City leaped to prominence on the back of massive investments, signing top players and announcing lucrative sponsorship deals with companies closely linked to its owner, Abu Dhabi royal Sheikh Mansour Bin Zayed Al Nahyan, who owns the Abu Dhabi United Group.

In 2015, China Media Group acquired a 13% stake in City Football Group, the parent company of the Manchester team, for $400 million.



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