GdS: Seven key questions that help understand the investigation into Milan

By Oliver Fisher -

There are seven major questions that must be answered as part of the Milan Prosecutor’s Office investigation into AC Milan, according to a report.

There has been a cloud hanging over Milan since the news broke on Tuesday of the club’s offices being raided, and La Gazzetta dello Sport gave a detailed round-up of what we know so far.

Felice Raimondo picked apart the various cases that could be brought against the club in a fantastic piece, while below La Gazzetta have summarised things by answering seven questions.

1. How did the investigation come about?

On 14 September 2022, a couple of weeks after Milan’s transfer from Elliott to RedBird, Blue Skye presented a complaint to the Italian judiciary concerning the sale of the club’s shares.

Blue Skye, together with the Elliott fund, had granted a €202m loan in 2017 to the then owner of Milan, Yonghong Li, through a company created specifically, Project Redblack. Once Li proved to be insolvent (2018), Project Redblack acquired Milan’s shares as a pledge.

Then in 2022 Project Redblack sold the Rossoneri to the RedBird fund, however without the consent of the minority shareholder (4.3%) Blue Skye and a unanimous vote of the board of directors. Hence the complaint that sets the investigators in motion.

2. What are the prosecutor’s suspicions about the change of ownership?

According to the Milan Prosecutor’s Office, there are indications that suggest that Milan today are not really in the hands of RedBird, but are in fact still controlled by Elliott.

The club’s purchase and sale operation in 2022 consists of two tranches: one of around €600m, raised by the buyer; another for €580m through a vendor loan, i.e. a loan from the transferring company (Elliott) to the buyer (RedBird).

However, the magistrates have doubts about the origin of those €600m, €400m of which were provided by Rb Fund IV, a company which – according to what was declared in the Form Adv – does not appear in the funds managed by RedBird.

According to what was declared to the board of the club itself, the company Rb Fc Holding Genpar Llc is at the top of Milan, based in Delaware at the same address as King George Investments and Genio Investment, majority shareholders of Project Redblack.

Just a coincidence? It doesn’t take a lot of searching to find that thousands of companies are registered at that address, because of how advantageous the laws in Delaware are.

3. What are Furlani and Gazidis accused of?

Giorgio Furlani and Ivan Gazidis are two of the four suspects in the investigation, together with Daniela Itala and Jean Marc McLean, for the crime foreseen and punished by article 2638 of the civil code.

What is that article? Obstacle to the exercise of the functions of public supervisory authorities. This authority, in the interpretation of the accusation, is the FIGC.

In practice, in Milan’s official communications, signed by the CEOs, there would be incomplete or false information on the club’s corporate structure after the change of ownership in 2022.

4. Are Milan involved on a criminal level?

As immediately highlighted by the club’s press release, Milan is third and unrelated to the disputed facts. As a legal entity, the Rossoneri as a club are not under investigation.

5. What are Milan at risk of on a sporting level?

If the accusation were confirmed, we would be faced with a violation of article 32 paragraph 5 of the Sports Justice Code, which can lead to sanctions (from fines to points deductions).

This could alternatively be accompanied or contested by art. 31 paragraph 1 on violations in management and economic matters, and here too the sanctions range from fines to points penalties.

Finally, the art. 4 on the observation of the principles of loyalty, correctness and probity and therefore art. 6 for direct responsibility of the club.

6. Could proceedings also be opened by UEFA?

The prosecutor’s papers raise the possibility of being faced with a violation of article 5 of the UEFA regulation which regulates the ‘integrity of competitions and timeshare’.

Elliott are also involved in Lille, as a €170m creditor of Callisto Sporting, a company that controls the club’s shares through L Holding.

It must be said that in the last two seasons Milan and Lille have never participated in the same European competition.

Rather, if the Rossoneri were to face sanctions in Italy, UEFA could accuse the club of violating the art. 4 on ‘Admission procedures and criteria’.

7. What do the papers say about Arab investors?

The Milanese magistrates are in possession of a document called ‘AC Milan Investor Presentation’. This is a report that confirms the desire to sell part of the shares to investors from the Arab world.

In particular, on page 52, ‘the opportunity for the PIF fund to refinance 80% of the amount of the vendor loan for 487.5 million and enter Milan with 41.7% of the shares’ is highlighted.


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