Police raid AC Milan headquarters to investigate football club sale

Unlock Editorial Digest for Free

FT editor Roula Khalaf chooses her favorite stories in this weekly newsletter.

Italian financial police raided the headquarters of Serie A football club AC Milan on Tuesday as part of an investigation into potential irregularities in the 2022 sale of the club to private equity group RedBird by U.S. hedge fund Elliott Management.

Prosecutors allege that Elliott controlled AC Milan despite selling it to the Redbirds, according to a search warrant seen by the Financial Times that authorized a search warrant at the property in the city's Portello district. A raid was carried out at the Casa Milan complex and prosecutors subsequently launched an investigation.

The warrant accuses the club's current CEO, Giorgio Furlani, and his predecessor, Ivan Gazidis, of fraudulently concealing information about the club's ownership structure that should have been communicated to the Italian Football Federation. information.

“It appears that the majority of the funds used to purchase the club came from investment vehicles not owned by the Redbirds. It is suspected that Elliott currently maintains effective control of the company,” the warrant states.

The arrest warrant also claims Elliott indirectly controls French football club Lille, which prosecutors accuse of violating rules set by UEFA's governing body.

Elliott denied the allegations as “false” and added that he no longer controls AC Milan or any shares in the club since the sale two years ago.

The company said: “We are aware of reports this evening that the current and former CEOs of AC Milan are under investigation over allegations that the football club is still owned by Elliott and that this allegation was concealed from the Football Association. “This The allegation is false.”

The Redbirds also denied on Tuesday that the hedge fund controls the club.

The charges are based on documents filed with the U.S. Securities and Exchange Commission and other documents previously seized by Italian investigators, people familiar with the matter said.

According to search warrants, Italian financial police also searched the homes of Fulani and Gazidis, accusing them of obstructing Covisoc, the Italian football supervisory committee.

An AC Milan spokesman confirmed the raid and said the club was not involved in the investigation. “The club is cooperating fully with the investigating authorities,” a spokesman said.

Less than two years ago, New York-based Redbirds bought AC Milan from Elliott for €1.2 billion. As part of the deal, Elliott agreed to provide RedBird with a €600 million loan through a so-called “supplier loan” to fund the deal.

Redbird subsequently appointed Fulani as CEO of AC Milan. He was a long-time portfolio manager at Elliott and managed football clubs for the hedge fund founded by Paul Singer. Current AC Milan president Paolo Scaloni was also appointed by Elliott in 2018. Paul's son Gordon Singer continues to serve on the AC Milan board of directors.

The investigation stems from a complaint filed by former Luxembourg investor Blue Skye of AC Milan, which “raised doubts” about the RedBird deal immediately after the sale, accusing Elliott of a “lack of transparency regarding the terms of the sale,” lawyer Blue Skye said on Tuesday.