Documents leaked from Cyprus reveal a series of secret payments by Russian oligarch Roman Abramovich, the former owner of Chelsea Football Club. John Pico Benaki, Eden Hazard’s former agent, also struck a multi-million dollar deal with a post box company owned by Abramovich in the British Virgin Islands.
One of the most important revelations in the Cypriot secret investigation concerns international football. The leaked documents question the spending of the English Football Club Chelsea when it was still owned by the Russian oligarch Roman Abramovich (57).
The billionaire bought the club in 2003 for the equivalent of 160 million euros. Under Abramovich, Chelsea have won trophies. His tenure at the club only ended after the Russian invasion of Ukraine. The UK and EU placed the oligarch on the sanctions list, forcing him to sell his successful club in 2022.
The documents we are now releasing, in collaboration with the International Consortium of Investigative Journalists, among others, Watchman And Paper mediaIt reveals a pattern of multi-million euro transactions by Abramovich’s offshore companies in Cyprus and elsewhere over a decade. The question is whether these payments do not contravene the rules of football e.g Financial fair play (FFP) of UEFA, the governing body of European football. These 2011 rules simply mean that a club may not spend more money than it earns.
Eden Hazard
On May 28, 2012, Eden Hazard announced his transfer from French club Lille to Abramovich’s Chelsea. Chelsea reportedly paid €35 million for the top player. According to the British newspaper The Telegraph, Hazard’s agent at the time, John Pico, requested compensation equivalent to 7 million euros. Less than a year later, on 29 March 2013, Pico, in his capacity as director of Gulf Value FZE in the UAE, signed a “consulting services contract” worth €7 million. This is clear from the leaked documents. The payment was supposed to come from Liston Holdings, Abramovich’s subsidiary in the British Virgin Islands, and, according to the document, was compensation for five years of services “related to research and consulting in the field of sports.”
Around the same period, Pico appeared in a role other than a football agent. On 19 April 2013, a Dubai investor, Gulf Dynamic Challenge, acquired White Star Woluwe, a club playing in the Belgian second division. Officially, Biko was just an advisor to White Star Woluwe, because football agents are not allowed to hold official positions at the club.
Biko later announced that he was ceasing his activities as a real estate agent to become “general manager” of White Star.
White Star and Lowe’s
In April 2015, White Star and Lowe threatened to lose their Football Association license to participate in the 2015-2016 season competition in the second division. The club appealed. During oral arguments on the licensing case before the Belgian Court of Arbitration for Sport, Pico claimed to have concluded a cooperation agreement with Chelsea. But the document he submitted to the arbitration court turned out to be unsigned. However, White Star managed to maintain its license.
In July 2015, the contract between PICO and Abramovich was amended. The leaked document indicates that Pico agreed to receive a sum of 300,000 euros less than what was initially agreed upon. It is not clear whether this is linked to Chelsea’s previous intervention to help White Star and Lowe obtain a license in Belgium.
In April 2016, the Football Association’s Licensing Committee rejected another application from White Star and Lowe’s. During the new petitions before the arbitration court, Pico once again invoked a promise from Chelsea. This time it was an email from Abramovich’s right-hand man, in which he promised nearly half a million euros to the player from White Star and Lowe’s. But the Licensing Committee indicated that there is no contract for that yet. Result: The club ultimately did not obtain a license.
After another two months, the agreement with Gulf Value in the UAE ended. According to leaked documents, Pico has already received 6.55 million euros from Abramovich. Pico again waived the amount owed, this time 150,000 euros.
In 2017, White Star Woluwe was liquidated. Last month, Eden Hazard announced his retirement from professional football. As Chelsea captain, he won six domestic and European titles in seven glorious years.
Cost saving
The deal with Pico is just one of many multi-million dollar transactions described in leaked documents about Abramovich. The expenses – which have remained secret until now – were routed through external companies and appear not to have been included in Chelsea’s annual accounts. The club must submit this every year to the Premier League, the Football Association and UEFA.
Chelsea’s new owners have already admitted that “incomplete financial information” was provided under Abramovich. The European Football Association (UEFA) then imposed a fine of 10 million euros on the club for violating financial fair play rules. The Premier League is still investigating possible violations. Not only a financial fine may be imposed, but a sports penalty may also be imposed.
Three prominent sports lawyers told our media partner Watchman The secret payments that have now emerged may have violated several rules. By routing payments through his own companies, Abramovich may have artificially saved costs that should have been counted towards Chelsea’s spending limits. In this way, the club may have spent more than allowed, according to sports lawyers.
Chelsea responds
A Chelsea spokesman responded to The Guardian that the club now has new owners, and that the accusations date back to the previous period. He added: “It is based on documents that have not been presented to the club and do not relate to any individual currently working at the club.” The new owners became aware of “potentially incomplete financial reporting in relation to historical transactions” under the previous owners, the spokesman said. “Immediately after completing the purchase, the club proactively communicated these matters.”
Roman Abramovich did not respond to requests for comment. Eden Hazard, whom we contacted through an intermediary, did not want to respond. We were unable to reach John Biko, despite attempts to speak to him on four different numbers.
Abramovich secretly paid 115,000 euros to a Belgian lawyer
Belgian lawyer Jean-Louis Dupont achieved international fame with the Bosman judgment in 1995, a ruling issued by the European Court of Justice. It has put an end to transfer fees in football when players complete their contracts.
In 2013, DuPont set his sights on UEFA’s Financial Fair Play. Under these rules, football clubs must ensure that their expenses do not exceed their income during a certain period. On behalf of the player’s agent, Daniele Striani, DuPont filed a complaint against the Financial Fair Play rules with the European Commission and with the Court of First Instance in Brussels.
On February 17, 2014, according to leaked documents, Jean-Louis DuPont of Luxembourg signed an agreement with Liston Holdings Limited, a small company owned by Roman Abramovich in the British Virgin Islands. Leiston expresses its willingness to finance part of the “legal costs and fees incurred by JLD in connection with the proceedings” before the European Commission and the Court. The amount of €115,000 will be transferred in ten installments.
The lawyer was not allowed to raise the luxury tax as an alternative. The contract itself was to remain secret.
DuPont retreated before the European Commission and the court: the FFF remained in place. Roman Abramovich did not respond to our requests for comment.
We’ve contacted Jean-Louis Dupont and Danielle Striani for comment. “In a legal battle of this size, you have to be able to count on outside support, although I contributed as much as I could to the costs,” Striani said. DuPont responds that Striani knew and agreed that additional funding was needed.
Learn more about the International Consortium of Investigative Journalists (ICIJ): www.icij.org.
