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AS Monaco owner Rybolovlev allegedly concealed illegal funding into the club – Football Leaks/Mediapart

French outlet Mediapart report this morning as part of a new dump of Football Leaks revelations that AS Monaco owner and Russian billionaire Dmitry Rybolovlev attempted to hide a massive, illegal amount of funding into the team with a fictitious marketing contract and through the involvement of a series of offshore companies in the British Virgin Islands and Hong Kong.

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The French outlet claims that Rybolovlev put in €326m into AS Monaco over a time period of two years, in direct violation with UEFA regulations, which since 2010, have stipulated that such cash injections on the part of club owners infringe upon Financial Fair Play.

Mediapart detail how Monaco agreed to a marketing deal in June 2014 that was in reality to be a yearly sum of €140m given by Rybolovlev, concealed by arranging the payment through the British Virgin Islands and Hong Kong. The scheme fell through when a disagreement occurred between Rybolovlev and Bernard de Roos, the Dutch head of Swiss-based sports marketing agency, AIM.

de Roos notably threatened to activate a “nuclear bomb”, which is understood to have been revealing the scam to UEFA, and so Monaco concluded discussions amicably to avoid any fallout.

Despite the club coming close to liquidation before Rybolovlev swooped in to save it and the subsequent attempted fraud, Monaco received a minor penalty from UEFA during that investigative cycle, of a paltry €2m.

Mediapart alleges that the CFCB Investigatory Chamber, charged with investigating FFP violations, omitted a series of disturbing findings when trawling through Monaco’s finances, in their final report. Behind the scenes, Monaco are understood to have executed a successful lobbying campaign that included a Michelin-star restaurant experience in Monaco, after which the head of UEFA’s FFP programme agreed to help prepare the club for their CFCB Investigatory Chamber hearing.

AS Monaco responded to allegations about its work with marketing agency AIM:

“As the project proposed by this company turned out to be too ambitious and ultimately unachievable, AS Monaco made the decision to terminate the collaboration with the AIM agency while informing the sporting authorities of this breach of contract.”

In the summer of 2014, Rybolovlev was uncertain about pivoting to a strategy of offloading players, which the club has since paid enormous financial dividends for ASM. In the face of FFP pressure and the fact that Monaco had run up losses of €170m in the previous three years, he decided to instruct his board to do everything in their power to abide by UEFA’s regulations.

The difficulty in winning sponsorship contracts was highlighted by Monaco’s tiny population and the club’s 18.5k capacity ground – sponsors showed little interest, underlined by the fact that ticket sales & sponsorship deals made just €14.4m in revenue for the club in the 2013/14 campaign. This was in conflict with the club’s €125m annual budget and the CFCB Investigatory Chamber began to take notice and club Vice President Vadim Vasilyev launched a campaign to find “a political solution” with the body, much like PSG and Manchester City sought out.

Vasilyev wrote to middleman Filips Dhondt, to get the head of CFCB Investigatory Chamber, Jean-Luc Dehaene to agreed to a meeting, to “spend some time in Monaco together” along with the head of the FFP programme, Andrea Traverso.

Mediapart then go on to describe a meeting on March 13th 2014, when Dmitry Rybolovlev sat down with Michel Platini & Gianni Infantino at UEFA headquarters in Nyon, Switzerland, in which AS Monaco’s marketing director told Rybolovlev to “build a closer personal relationship with UEFA President Michel Platini, the big promoter” of Financial Fair Play regulations. This individual proposed to Rybolovlev that he should explain the club’s project and “obviously not even give the slightest indication” that Monaco had violated the regulation.

The marketing director then astonishingly added that the Rybolovlev might “only if appropriate and to show that our president is well-informed” mention to Platini that he knew that his son was an employee at PSG – “close to a conflict of interest”.

AS Monaco have since informed Mediapart that Rybolovlev did not follow the “inappropriate” advice.

AS Monaco clearly felt that the proposed AIM marketing deal was necessary after that meeting, drawing up a contract in June 2014 under which the agency was to manage sponsorship and marketing for the club, which was to rent state of the art advertising boards from AIM for €350k a year. In return, AIM was to ensure that the club received annual revenues worth €140m for 10 years – a crazy number, more than the club’s annual spending of €125m and five times larger than the largest sponsorship deals brokered by Real Madrid & Barcelona.

Monaco structured the deal whereby if their income (excluding TV rights money) would amount to less than €140m a year, then AIM would be obligated to pay the difference. This was particularly absurd as ASM in the year previous had made just €14.4m in income, which would have forced AIM to pay €125.6m to Monaco.

Rybolovlev’s lawyer Tetiana Bersheda warned Monaco VP Vasilyev that the deal “did not make sense economically” – but was ignored. The contract was signed between June 16th and 20th 2014, just in time to be able to include a down payment from AIM, allowing Monaco to reflect such a deal in the balance sheet, meaning they posted a profit of €11m instead of losses of €116m.

The CFCB Investigatory Chamber opened an investigation into the AIM contract with Monaco did not receive the first payment that they were due, on October 3rd, of €9m. They didn’t receive it quite simply because Bernard de Roos, the head of AIM, did not have it. The deal was set-up in Hong Kong, allegedly for reasons relating to Rybolovlev’s divorce proceedings, but the final stage of the offshore set-up is arguably the most shocking. Under the investment agreement finalised on 31st October, a company registered in the British Virgin Islands, called City Concept Ventures, agreed “to invest” in AIM Digital Imaging €140m a year for 10 years, exactly the amount that the company was to pay AS Monaco. The deal also stipulated that City Concept Ventures would pay €2.2m to de Roos’ agency, his personal profit for participating in the scheme.

Mediapart allege that City Concept Ventures was a front for Monaco owner Dmitry Rybolovlev, with its contract details managed by a law firm called Neocleous, which also manages his trusts in Cyprus. In other words, the allegation is that Rybolovlev was set to use AIM as a vehicle to pump more money into Monaco, using the front of fictitious sponsorship contracts to do so.

When Monaco officials travelled to UEFA’s headquarters for their FFP hearing on November 7th, Mediapart claim that they lied about their new partnership agreement, claiming that half of the €140m a year guaranteed by AIM was made up of real sponsorship deals, when in reality they made up less than 10% of that sum.

The scheme ultimately fell through as de Roos refused to participate, angry that Monaco had sold their top players and reduced the club’s brand value.

But Mediapart claim that the real reason for the deal’s collapse was that AIM did not receive the €140m it was due to receive from City Concept Ventures, because Dmitry Rybolovlev had just fallen out with Prince Albert of Monaco over other matters, and decided to suspend all investment into the club as a result. Football Leaks documents show that Rybolovlev had indeed stopped funding the club, and Monaco were months away from liquidation as a result, likely as a power move by the Russian oligarch.

The club was forced into looking at borrowing money against the guarantee of Champions’ League involvement payments. Macquarie, the Australian banking group, refused to lend any sum until AIM began making payments to Monaco.

In the end, Monaco reached a sweetheart agreement with UEFA over their FFP infringements, a fine of just €2m, on the basis that the club had pledged to introduce a new economic model based on the sale of players and the AIM scheme never took off, with UEFA never finding out that it was merely a front for Rybolovlev to invest more money into ASM, until now…

The rest of this story can be read on Mediapart.