SBD Global/June 13, 2013/Finance

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  • Lionel Messi, Father Deny Accusations Of Tax Fraud By Spanish Authorities

    Lionel Messi and his father are accused of tax fraud.

    Barcelona's Lionel Messi and his father "denied wrongdoing" on Wednesday after the Spanish tax authorities "accused them of defrauding the state" of more than €4M ($5.3M), according to Pinedo & Rogers of REUTERS. Messi and his father, Jorge, "allegedly filed fraudulent tax returns" for the years '06-09. Messi wrote on his Facebook page, "We learned about the action begun by the Spanish prosecutor through the media. It is something that surprises us because we have never committed any offence. We have always fulfilled all our tax obligations following the advice of our tax consultants, who will take care of clarifying this situation" (REUTERS, 6/12). The London TELEGRAPH wrote that Forbes magazine listed Messi as "one of the world's highest-paid athletes" with a salary of just over £12M ($18M) a season. On top of his Barcelona wages, he "pulls in a similar amount in endorsements from sponsors," including adidas, PepsiCo and P&G and he is 10th on Forbes' latest list of top-earning athletes (TELEGRAPH, 6/12).

    NO JAIL TIME: The AP reported the complaint said that Messi "circumvented his tax obligations" by using shell companies in tax havens such as Belize and Uruguay. The case "was submitted for trial at the court in Gava, the upmarket Barcelona suburb near the Mediterranean coast where Messi lives." A judge at the court "must accept the prosecutor's complaint before charges can be brought against Messi and his father." University of Navarra Sports finance analyst Professor Sandalio Gomez said that if found guilty of evading tax on his image rights, Messi "could be liable to a fine amounting to 150 percent of the earnings concealed." Gomez added that a guilty verdict "would not carry a jail sentence" (AP, 6/12).

    'TROUBLING ACCUSATION': FORBES' Agustino Fontevecchia reported the case is "a troubling accusation." Messi "must prove that his father didn’t engage in a complicated scheme to hide his earnings from Spanish tax authorities, where he currently resides." In a letter signed by Messi’s “legal and fiscal council,” lawyer Angel Juarez rejected the accusations, noting that he is "responsible for the star’s tax filing and adding they will take all the proper legal steps to put the situation to rest." Juarez confirmed that they "hadn’t been contacted by the prosecution" (FORBES, 6/12).

    UNEXPECTED NEWS: The BBC's Tom Burridge reported Argentina's media "also appeared puzzled by Wednesday's development," with the Clarin newspaper describing it as "unexpected news." Barcelona has "not commented on the allegations." The investigation comes as the Spanish authorities "step up their efforts to clamp down on tax fraud, as the government tries to balance its budget during a continuing economic crisis" (BBC, 6/12). In London, Tobias Buck reported the prosecution said in its filing that the "initiative for the alleged tax fraud came from Mr Messi’s father." It will "be up to a Spanish judge to decide whether the case can proceed but the allegations are threatening to sully the reputation of a sportsman whose career has been almost entirely free from blemish" (FINANCIAL TIMES, 6/12).

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  • Finance Notes: Spanish Basketball Club Lucentum Owes ACB $2.4M For Inclusion

    Spanish basketball club Lucentum has until next Friday to pay €1.8M ($2.4M) to be able to play in the Spanish Basketball League (ACB) next season. Lucentum recently earned one of two promotion spots to the ACB for '14, but owes the league the payment by next Friday before it can be promoted. The fee is related to the club's economic relegation from the ACB in '12 for economic reasons (EFE, 6/12). ... Unionists said on Tuesday that hundreds of workers have been fired from a Cambodian factory making sportswear for Nike "following a series of protests over pay." Unionists denounced the move as "unacceptable" and illegal (AFP, 6/11).

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