(Adds company investigation unit declines to comment in third paragraph.)
Feb. 2 (Bloomberg) -- Two-time European soccer champion Porto’s financing of a player signing via companies whose ownership is unclear is “a very serious matter” and requires an investigation, U.K. lawmaker Damian Collins said.
Pearl Design Holding Ltd. and For Gool Co. provided funds to sign Brazilian striker Walter da Silva for 6.2 million euros ($8.1 million) in 2010, according to the stock market-listed Portuguese team’s latest quarterly statement. Gianni Infantino, secretary general of European soccer ruling body UEFA, said last week there is a risk of money laundering in such cases because it’s unclear who owns the so-called letterbox companies, which have mailing addresses in the U.K. and seemingly nothing else.
Collins, a Conservative who sits on a Department of Culture, Media and Sport committee, said he would raise the issue in a Feb. 9 debate about soccer governance. The U.K.’s Company Investigations unit, which probes possible misconduct, said in an e-mail it can’t comment on individual cases.
“Football could easily be vulnerable to people who want to launder money, abusing the transfer system, which is why knowing the source of funds” is important, Collins said in an e-mail. “The bank of a football club has to know where the money it receives comes from and whether there is any risk that it is coming from a disreputable source.”
As banks make it harder to borrow, clubs are seeking alternative ways to raise funds, often in return for a share of a player’s future transfer fee, said Sandalio Gomez, who teaches sports management at IESE business school in Madrid. While the third-party ownership of transfer rights is banned in the English Premier League it is not illegal for U.K. companies to invest in them in other championships.
Manchester-based R2 Asset Management Ltd., which is regulated by the Financial Services Authority, and London-based Doyen Capital Partners Ltd. are among funds that invest in transfer rights of players in Portugal and Spain and other European leagues. Zurich, Switzerland-based soccer ruling body FIFA allows the practice, provided investors don’t interfere in transfers and, according to Javier Tebas, a former vice president of the Spanish league, the investment model can work if regulated properly.
Mark Quirk, a co-owner of Rochdale-based For Gool’s parent company Kirkdelta Ltd., didn’t respond to letters sent to three business addresses last month. Mario Queiroz, the only listed shareholder of London-based Pearl Design, didn’t respond to an e-mail. UEFA’s Infantino said the Nyon, Switzerland-based governing body doesn’t have the power to investigate the companies.
Quirk is a director of 21 U.K.-based companies and has resigned from 74 since 2005, according to Companies House records. Queiroz is a director of 45 companies in the U.K. and 35 in Spain, including Spanish Fiscal Representation S.L., according to Companies House and Madrid-based Registro Mercantil.
Porto spokesman Rui Cerqueira didn’t respond to e-mails and telephone calls.
Porto signed Da Silva from Uruguay’s Club Atletico Rentistas less than two months after his last game for Brazil’s Internacional de Porto Alegre, and without him having played for Rentistas, according to transfermarkt.com, which tracks soccer player trades. After scoring two goals in six games this season, he was loaned to Brazil’s Cruzeiro last month.
Soccer authorities should be allowed to ask banks about the source of team funding, Collins said, and there should be a complete ban on outside ownership of transfer rights because it creates incentives for trading “regardless of the interests of the player.”
--Editors: Christopher Elser, James Hertling
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