LONDON: Chelsea owner Roman Abramovich held secret investments in footballers not owned by his club, according to an investigation into banking leaks called the FinCEN Files.
BBC television’s Panorama programme is reporting that the players included the Peruvian winger Andre Carrillo, who turned out against Chelsea in Champions League matches in 2014.
Abramovich held rights in the players through a company named Leiston which was based in the British Virgin Islands. His spokeswoman said no rules or regulations were broken.
The issue for football concerns the infamous system of third-party ownership (TPO) in which investors buy a share of a footballer’s future transfer value from cash-strapped clubs. The practice was banned in the English Premier League in 2008 and internationally in 2015.
An example of the conflict of interest concerned Chelsea’s match against Sporting Lisbon in the Champions League group stage in 2014 when Carrillo lined up for Sporting in both matches.
So in Lisbon in September and Stamford Bridge in December, Abramovich had an interest in 12 players on the pitch.
The controversy began to unravel in December 2016 when a suspicious activity report (SAR) was filed on Abramovich.
It identified more than $1bn of “suspicious payments involving offshore shell companies” – firms functioning only to manage the money put in them.
The SAR said many of the shell companies were “owned by Roman Abramovich… one of Russia’s most powerful oligarchs with close ties to Moscow & Vladimir Putin”.
The money seemed to be going around in circles between the companies.
Among the transactions were a series of nine payments from a Cypriot company that were split between four other companies before $156m ended up in Leiston Holdings.
Leiston became the subject of public attention in 2018, when it was revealed by German news magazine Der Spiegel as part of the Football Leaks investigation to be an investment vehicle for TPO.
Panorama discovered both the company in Cyprus and Leiston Holdings are Abramovich companies.
As well as being funded with $156m of his money, Chelsea had first option of signing some of Leiston’s players.
In 2011, Leiston Holdings secured 50pc of Andre Carrillo’s “economic rights” when it loaned Sporting €1m (about £850,000) to help them purchase the player from Alianza Lima.
The financial deal contained a number of clauses, as was common in TPO agreements.
It said that if a transfer offer of more than €6m was made for Carrillo and Sporting Lisbon did not accept it, they would have to pay Leiston 45% of the value of the offer.
Sporting agreed to pay Leiston a “risk fee” of more than €127,000 for each season Carrillo played for the club.
The Portuguese club’s accounts showed it owed Leiston €2.6m in 2014-15.
Leiston also owned stakes in two other Sporting players – Gael Etock, who played for the club between 2012 and 2013, and Valentim Viola who was in the squad between 2012 and 2016.
Abramovich’s spokeswoman said: “The fact that transactions may have been confidential, does not mean that they were unlawful or otherwise in breach of then applicable rules or regulations.”
She said they “relate to the period before Fifa changed their rules”.
The spokeswoman added that suspicious activity reports do not mean laws or rules have been broken, saying: “The fact that we are not aware of this issue, confirms that there has been no wrongdoing as no action was taken.”
The FinCen Files is a leak of secret documents. They have revealed how major banks have allowed dirty money to be moved around the world. They also show how the UK is often the weak link in the financial system and how London is awash with Russian cash.
The files were obtained by BuzzFeed News which shared them with the International Consortium of Investigative Journalists (ICIJ) and 400 journalists around the world. Panorama has led research for the BBC.