AC Milan Owner Being Scrutinized About Money, Business Disputes
When Chinese businessman Li Yonghong bought Serie A side AC Milan, "virtually nobody in Italy had heard of him," according to Wee, McMorrow & Panja of the N.Y. TIMES. Nevertheless, Li "seemed to have what mattered most: money." He bought the club in April for $860M from former Italian PM Silvio Berlusconi to clinch China's "biggest-ever" football deal. Today, Li's acquisition of AC Milan "appears to be emblematic of a string of troubled Chinese deals." The club, "bleeding money after a spending spree on star players, is seeking new investors or a refinancing of the high-interest loan" that Li took to buy the club. That loan "comes due in a year." Chinese corporate records show that -- "on paper, at least -- someone else owns his mining empire." That company's offices were empty on a recent visit, and a sign on the door from the landlord cited unpaid rent. A spokesperson for AC Milan said that Li's control of the mining business was "verified by lawyers and banks involved in the transaction." China's emergence as a world economic power came with a "ready checkbook for major brand names." Then, Chinese officials "began to worry that the spending was simply part of an exodus of money from China so vast that it once threatened to destabilize the country's economy." Outside China, some of the deals "led regulators to ask questions about the tycoons behind them." In the case of Li, the mines that he told AC Milan he controlled have been owned by four different people since last year, according to Chinese corporate records. The business "changed hands twice for no money," documents show. Li declined an interview request through AC Milan. The club spokesperson defended Li on his business disputes, saying that "sometimes he was a victim and that sometimes he was not aware of complicated rules." Mark Dreyer, who tracks Chinese football investments on his website, China Sports Insider, said, "There's a lot of ways to invest in football and the sports industry for much less money. People were basically using the government's previous push for sports as a way to diversify into different industries and get their money out of China" (N.Y. TIMES, 11/16).