From the very start, Yonghong Li’s takeover of Milan for €740m has been shrouded in controversy, confusion and very little clarity.
Chinese businessman Yonghong Li completed the takeover from Silvio Berlusconi on April 13 2017 for €740m, including €220m in existing club debt.
He had begun negotiations in August 2016, but was only able to secure the closing after numerous postponed deadlines thanks to a high-interest loan from US hedge fund Elliott Management Corporation of €303m.
From the very start, Yonghong Li’s takeover of Milan for €740m has been shrouded in controversy, confusion and very little clarity.
Chinese businessman Yonghong Li completed the takeover from Silvio Berlusconi on April 13 2017 for €740m, including €220m in existing club debt.
He had begun negotiations in August 2016, but was only able to secure the closing after numerous postponed deadlines thanks to a high-interest loan from US hedge fund Elliott Management Corporation of €303m.
With 11 per cent interest, this must be repaid in full for €380m in October 2018 or the club goes to Elliott Management as one of his repossessed assets.
RAI programme Report found that a few months after the closing, Yonghong Li received another loan worth $8.3m from Teamway, a company based in the Cayman Islands.
David Webb, independent financial analyst for Webbsite.com, said the interest was “originally 14 per cent and has now gone up to 24 per cent. That means Mr Li’s situation is desperate if he was unable to find financing at more advantageous terms than that.”
The mere presence of Elliott Management in the deal already rang big alarm bells, because they are known as a ‘vulture fund’ – who loan money to corporations or even countries in serious financial crisis and then prepare to repossess their assets if they fail to keep up with payments.
New York Times Beijing correspondent Sui-Lee Wee said they had “asked around and nobody knew who Yonghong Li was. I ask myself who did due diligence on Mr Li’s companies – assuming they even did!”
The New York Times also visited Yonghong Li’s business headquarters and found only an eviction notice with half-eaten food.
UEFA cited in their refusal to agree a Financial Fair Play settlement agreement their grave concerns over Yonghong Li’s financial stability.
“There remain uncertainties in relation to the refinancing of the loan and the notes to be paid back in October 2018.”
Now UEFA have excluded Milan from European competition and handed down a fine for violating FFP principles.
The fact this decision comes just days after Yonghong Li missed his first deadline to increase the capital, as he failed to provide the necessary €32m last week, will embolden UEFA in their decision.
That sum was instead sent over by Elliott Management he has until July 6 to pay it back or the hedge fund will begin repossessing his assets.
At the same time, Yonghong Li is currently in negotiations with two potential investors to take over, both based in America.
The favourite is Forbes 400 billionaire and the New York Cosmos owner Rocco Commisso, while Thomas Ricketts (whose family owns the Chicago Cubs) is the other candidate.
Milan will likely have a new owner when the Serie A season kicks off in August, but it’s still not at all clear who that will be.