AC Milan under the microscope as sale to RedBird probed

March 14, 2024 | 14:56
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AC Milan are the latest Serie A football club to fall under the microscope of Italy's investigative authorities after raids on their headquarters as part of a probe into their 2022 sale to American investment fund RedBird.
AC Milan under the microscope as sale to RedBird probed
Empoli's Polish midfielder #27 Szymon Zurkowski and AC Milan's US midfielder #80 Yunus Musah fight for the ball during the Italian Serie A football match between AC Milan and Empoli at San Siro stadium in Milan, on March 10, 2024. GABRIEL BOUYS / AFP

Police swoops on club offices have become commonplace in recent seasons as financial scandals engulfed Italy's most widely supported team Juventus as part of a broader controversy over player transfer profits in professional football.

Tuesday's raid of Milan's headquarters, a short distance from the iconic San Siro stadium where they play their home fixtures, focussed on their current CEO Giorgio Furlani and his predecessor Ivan Gazidis.

Milan as a club are not on the list of suspects targeted by prosecutors in Italy's economic capital over RedBird's acquisition of the seven-time European champions for 1.2 billion euros (at the time $1.3 billion) from Elliott Management.

Prosecutors reportedly sent Italy's finance police to get material not just from the club's HQ but also at the homes of Gazidis and Furlani.

The pair are under suspicion of hiding from the Italian Football Federation's supervisory body COVISOC that US fund Elliott maintained control of Milan despite the sale to RedBird.

Elliott acquired Milan in 2018 when Chinese businessman Li Yonghong was unable to repay a loan he had taken out when he bought the club from the late Silvio Berlusconi's Fininvest the previous year.

Elliott said on Tuesday that: "This allegation is false. AC Milan was sold to RedBird on 31st August 2022. As of that date, the Elliott funds have had no equity interest in, or control over, AC Milan."

RedBird also denied the allegations on Wednesday, saying it controlled 99.93 percent of Milan's shares, with the remaining 0.07 percent owned by "individual Italian shareholders who are long-time fans of the club".

"The idea that RedBird does not own or control AC Milan is absolutely false and is contradicted by all evidence and facts, including those that allegedly are the basis of the investigation," said a spokesperson.

To help finance the sale to RedBird Elliott provided a vendor loan to its fellow US fund, a common practice in private equity transactions, for 550 million euros at an interest rate of seven percent.

The terms of the vendor loan, which needs to be repaid in August 2025, state that Elliott can have two representatives on Milan's board of directors.

Currently Elliott have one, their managing partner Gordon Singer who is the son of the fund's founder and president Paul Singer, while two of their former employees are on the board.

Furlani originally joined Milan's board in 2018 when he was still a portfolio manager at Elliott while the club's chief financial officer Stefano Cocirio arrived from that same fund in February last year.

RedBird added on Wednesday that Elliott were given "no voting rights" as part of the vendor loan agreement and also denied reports that Saudi Arabia's Public Investment Fund (PIF) could buy the club.

"No discussions are ongoing with any investors who could exercise control of the club. RedBird is the controlling owner of AC Milan and will remain so," finished the statement.

Neither of the two public prosecutors in Milan leading the investigation were available for comment when contacted by AFP.

The probe comes as Elliott battle former minority shareholder Blue Skye, who have contested the sale and have lost a series of civil suits in the United States, Luxembourg and Italy.

In September Elliott launched legal proceedings against Blue Skye in Luxembourg for what a source speaking to AFP called "serious criminal offences" including blackmail, extortion and fraudulent misrepresentation.

Milan, who are currently second in Serie A, won the Italian league championship in 2022 before being acquired by RedBird who also own French Ligue 1 team Toulouse.

The investigation and raids come at a crucial time for Milan as they make moves to build their own stadium in the Milanese suburb of San Donato.

Meanwhile the city of Milan is trying to convince the club and local rivals Inter Milan to take possession of a renovated San Siro, with a feasibility study into the works needed scheduled to be completed before the summer.

Milan have a good chance of reaching the quarter-finals of the Europa League as they lead Slavia Prague 4-2 ahead of Thursday's second leg of their last-16 tie.


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