Serie A: AC Milan in the sights of the Italian financial brigade

Police raids on Italian club premises have become commonplace in recent seasons. A resounding scandal has engulfed Juventus Turin against a backdrop of juicy and controversial profits linked to player transfers in professional football.

The search carried out on Tuesday at Milan's headquarters, near the iconic San Siro stadium where it plays its home matches, targets current general manager Giorgio Furlani and his predecessor Ivan Gazidis.

Milan, as an entity, is not in the crosshairs of prosecutors in the Italian economic capital. The latter are examining the sale of the seven-time European champion club by the American investment fund Elliott Management to another American fund, RedBird, for 1.2 billion euros in 2022.

The magistrates sent the financial police to search for documents not only at the club's headquarters, but also at the homes of Gazidis and Furlani.

The two men are suspected of having helped hide from the control body of the Italian Football Federation, COVISOC, that Elliott retained control of Milan despite its sale to RedBird.

Elliott acquired Milan in 2018 when Chinese businessman Li Yonghong was unable to repay a loan he took out when he himself bought the club from Silvio Berlusconi's Fininvest financial company. in 2017.

“These allegations are false,” Elliott responded Tuesday. “AC Milan was sold to RedBird on August 31, 2022. From this date, the Elliott funds no longer have any interest in or control over AC Milan.”

At the time of the sale, a source told AFP that RedBird had acquired 99.9% of the club's shares, with Elliott no longer owning any capital either in Milan or in RedBird's funds.

To finance the sale to RedBird, Elliott granted a “seller credit” to its American counterpart, a common practice in capital transactions which allows the seller to grant the buyer a credit on part of the purchase price, for an amount of 550 million euros at an interest rate of 7%.

This loan, which must be repaid in August 2025, provides for Elliott to have two representatives on the Milan board of directors.

Currently, Elliott has only one, its managing partner Gordon Singer - son of the fund's founder and chairman, Paul Singer - but two of its former employees sit on the board.

Furlani joined Milan's board in 2018, when he was still a portfolio manager at Elliott, while the club's financial director, Stefano Cocirio, arrived from that same fund in February 2023. Neither prosecutor of Milan in charge of the investigation could not be reached by AFP for a comment.

A source told AFP that the investigation had probably been opened following proceedings brought by former minority shareholder Blue Skye, which contested the sale and lost a series of civil trials in the United States, in Luxembourg and Italy.

In September, Elliott began legal action against Blue Skye for what the source called “serious criminal offenses.” These offenses would include blackmail, extortion and fraudulent declarations, with Blue Skye being suspected of having submitted false documents in order to win his case.

Milan, currently second in Serie A, won the championship in 2022 before being bought by RedBird, who also own French Ligue 1 side Toulouse FC, while Elliott once owned the Lille club.

The investigation and searches come at a delicate time, with Milan fans unhappy with their team's performance and attacking coach Stefano Pioli, who led the team to the last Scudetto.

Milan have a good chance of qualifying for the Europa League quarter-finals on Thursday, after beating Slavia Prague 4-2 in the first leg of the round of 16 tie.