Chelsea FC face fresh questions over how its former owner Roman Abramovich funded the club’s success, after leaked files revealed a string of secret payments that may have breached strict football rules, including those on “financial fair play”.
Experts said the transactions, uncovered through a joint investigation by the Guardian and international partners, could lead to the Premier League imposing punishments on Chelsea, such as a deduction of points.
Beneficiaries appear to include the agent of the star player Eden Hazard, an associate of the title-winning manager Antonio Conte and Chelsea FC officials. Other payments appear to have been connected to the purchase of the players Willian and Samuel Eto’o.
The payments have come to light thanks to an international investigation known as Cyprus Confidential, a cache of 3.6m offshore records leaked to the International Consortium of Investigative Journalists (ICIJ) and Germany’s Paper Trail Media, which shared access with the Guardian, the Bureau of Investigative Journalism (TBIJ) and other media.
Chelsea’s finances are already being examined by the Premier League in an investigation that runs from 2012 to 2019, after the west London club’s new ownership regime voluntarily reported that “incomplete financial information” had been submitted during Abramovich’s tenure.
The Football Association confirmed to the Guardian that it is also investigating Chelsea while Uefa, the governing body of European football, has already fined the club £8.6m over the admission, although its powers are limited because it can only look at evidence going back three years.
Now documents, dated during and outside the period under scrutiny, raise fresh questions over whether Abramovich repeatedly flouted the rules of football to benefit Chelsea, as the club ascended to the pinnacle of the global game.
Roman Abramovich bought Chelsea for £140m in 2003 and quickly flooded the club with cash in a relentless push for success.
The “Roman empire”, as some fans dubbed it, only fell when Russia’s 2022 invasion of Ukraine led to Abramovich being placed under sanctions by the UK, ultimately forcing him to sell.
Files analysed by the Guardian and TBIJ as part of the Cyprus Confidential investigation shed light on apparently hidden payments linked to pivotal moments in his trophy-laden tenure. The material, which comes from a Cypriot offshore services provider called MeritServus, was shared with the ICIJ by the nonprofit group Distributed Denial of Secrets.
On 18 July 2017, the files show, an Abramovich-owned company called Conibair Holdings, based in the British Virgin Islands (BVIs), signed an agreement with Federico Pastorello, an Italian football agent.
The Italian has been described in multiple reports as being close to Antonio Conte, the former Chelsea manager, and has spoken about the manager’s contract negotiations in the media.
Conibair agreed to pay Pastorello £10m for a 75% stake in Excellence Investment Fund (EIF), a business based in the US state of Delaware, documents suggest.
That same day, Chelsea announced that Conte, who had just guided the club to the Premier League title, had signed a new £9.6m-a-year contract.
Pastorello declined to comment on whether the two deals were linked but said: “Antonio Conte is not our client.”
During Conte’s title-winning season, Hazard scored 16 goals, a high point in a glittering seven-year spell that included him captaining the club and winning six domestic and European trophies.
Hazard had joined Chelsea in 2012 for €35m, in a marquee signing that followed fraught negotiations with the player’s agent, John Bico-Penaque, who reportedly wanted a sizeable commission worth about £6m.
On 29 March 2013, documents suggest, BVI-based Leiston Holdings, owned by Abramovich, agreed to pay €7m to a Dubai-based company called Gulf Value FZE for “advisory services […] related to […] sport research and consultancy”.
The contract was signed on the company’s behalf by Bico-Penaque. It is unclear whether the payment was declared to footballing authorities including the FA and Bico-Penaque did not return requests for comment.
On another occasion, Leiston paid £1m to Association des Jeunes Espoirs de Bobo, the former club of Bertrand Traoré, via a contract signed by Traoré’s brother, David. The contract is dated two months after the full-back signed for Chelsea.
The files also reveal at least €7m in payments made between 2005 and 2017 to companies linked to Zoran and Vladica Lemić. The latter, a key adviser to Abramovich, was reportedly a pivotal figure in the arrival of stars such as Arjen Robben, Branislav Ivanović, Nemanja Matić and the double-winning coach Carlo Ancelotti.
Separate documents show a £250,000 payment to the former Chelsea sporting director Frank Arnesen. Arnesen told the Guardian he would usually have expected the payment, a discretionary bonus, to have come from Chelsea rather than another company, but was unaware of any rule breaches and had declared it for tax purposes.
Four leading sports lawyers told the Guardian that some of the payments may have broken rules including Premier League and Uefa regulations on financial fair play (FFP).
FFP was introduced by Uefa at the start of the 2011-12 season – with similar restrictions adopted two years later by the Premier League.
The measures are partly aimed at preventing reckless spending that might put clubs’ future at risk. But the rules have also been adapted in response to a trend of wealthy benefactors – including Abramovich and nation states such as Qatar and the United Arab Emirates – pouring their own cash into clubs to buy success, in a practice dubbed “financial doping” by the former Arsenal manager Arsène Wenger.
Samuel Cuthbert, a sports barrister at Outer Temple Chamber, said: “If a club were to hide outgoings […] by paying those sums through other entities, it is conceivable that they could be in breach of the FFP rules.
“You would effectively be circumventing your regulatory requirements, which limit your ability to spend, and spending instead through an offshore company.
“Any opportunity to gain an unfair advantage skews the competition in favour of a particular club, and undermines the integrity of football, on a fundamental principled level.”
Three other lawyers, who asked not to be named due to potential conflicts of interest, gave the same opinion.
They also said some of the transactions may have broken Premier League rules that require the submission of accurate accounts, another provision demanding that clubs act in good faith, and the Football Association’s rules requiring disclosure of payments to agents.
The football finance expert Kieran Maguire, the author of The Price of Football, said Chelsea’s huge spending meant the club had habitually flirted with hard limits on financial losses.
“If there is proof that the club has used third party transactions to circumvent the profitability and sustainability rules then sanctions would be either financial or a points deduction,” he said.
0“The latter is more likely as any commission investigating a club’s circumstances will want to put out a deterrent that dissuades others from repeating such behaviour.”
Clive Betts MP, the chair of the all-party parliamentary group on football, said FFP should be “one of the key issues” for the new independent football regulator being set up by the UK government.
“It’s no use having FFP rules if you don’t enforce them, otherwise they’re a smokescreen for clubs spending as much money as they want,” he said.
The files also suggest that Abramovich secretly bankrolled efforts to overturn the FFP rules through the courts, ultimately unsuccessfully.
In February 2014, Abramovich’s Leiston Holdings agreed to pay £100,000 to a lawyer named Jean-Louis DuPont, who was challenging the legality and validity of FFP before the European Commission.
Leiston, which is understood to have been acting on Chelsea’s behalf, had a “business interest” in the outcome of the case, the contract shows.
A company owned by Abramovich also made payments that appear to have benefited the owner of a club that sold two players to Chelsea shortly afterwards.
The fortunes of Anzhi Makhachkala, a now defunct outfit from Dagestan, were briefly transformed when the Russian billionaire Suleiman Kerimov bought the club in 2011 and bankrolled big-money transfers.
But in 2013, Kerimov pulled the plug on his free-spending strategy and slashed Anzhi’s budget, plunging the club into financial turmoil and forcing a fire sale of players.
That summer, Chelsea signed two stars from Anzhi in two days. The Cameroonian striker Samuel Eto’o was the first to arrive, followed – somewhat controversially – by the 25-year-old forward Willian.
The Brazilian, who went on to win multiple trophies with Chelsea, had been on the verge of signing for its London rivals Tottenham Hotspur until Abramovich reportedly hijacked the deal, via a personal phone call to Kerimov.
Two months earlier, the Abramovich-owned Leiston Holdings agreed to pay two companies connected to Kerimov for “services in […] relating to football, including scouting and other football-related advice”.
Tobeo Services Inc and Fernington Invest Corp, both based in the BVIs, were each to be paid €12m, documents dated 10 June 2013 suggest.
A Chelsea FC spokesperson said: “These allegations pre-date the club’s current ownership. They are based on documents which the club has not been shown and do not relate to any individual who is presently at the club.”
The spokesperson said that during the purchase of the club – by a consortium led by the US investor Todd Boehly – the buyers became aware of “potentially incomplete financial reporting concerning historical transactions during the club’s previous ownership.
“Immediately following the completion of the purchase, the club proactively self-reported these matters to all applicable football regulators.
“In accordance with the club’s ownership group’s core principles of full compliance and transparency the club has proactively assisted the applicable regulators with their investigations and will continue to do so.”
The Premier League declined to comment while its investigation is ongoing. An FA spokesperson said: “We are investigating.”
Representatives of Roman Abramovich did not return requests for comment. Lawyers for Suleiman Kerimov did not return requests for comment. A request for comment from Bertrand and David Traoré, sent via Aston Villa FC, went unanswered. A request for comment to Top Sports Consulting, whose director is Zoran Lemić, went unanswered.
https://www.theguardian.com/world/2023/nov/15/chelsea-fc-face-new-questions-over-how-roman-abramovich-funded-success 
