‘Papers to the FIGC’ – second chapter of investigation into Milan begins

The second chapter of the investigation into the transfer of ownership of AC Milan will begin now, after the FIGC (Italian Football Federation) requested the documents from the Milan Prosecutor’s Office, who partially sent them.

According to La Gazzetta dello Sport (seen below), the search decree carried out last week as part of the investigation into the sale of Milan from Elliott Management to RedBird Capital in August 2022 was sent to federal prosecutor Giuseppe Chinè.

The 12 pages of the decree contain the hypothesis of a crime against Giorgio Furlani and Ivan Gazidis, the current and previous CEO of Milan, which is the obstacle to the exercise of the functions of the public supervisory authorities.

The reference is precisely to the Italian Football Federation, which the prosecutors Polizzi and Cavalleri consider a body governed by public law in the exercise of their supervisory activity. And here a parallel game is being played.

The risks

Before talking about this, let’s take a look at the possible outcome at the level of sporting justice, starting from the fact that in the criminal proceedings Milan are a third party and risks nothing.

If the Prosecutor’s hypothesis were verified, there would be a violation of article 32 paragraph 5 of the Sporting Justice Code on communication obligations, directly linked to article 20 bis of the Noif which regulates the ‘Acquisitions and sales of corporate shareholdings in the professional’.

Based on what the documents demonstrate, the administrative offence – defined by article 31 paragraph 1 – could also be contested. These can be combined with art. 4 on ‘loyalty, correctness and probity’ of the subjects of the Federation, and article 6 on the responsibility of Milan.

The sanctions in the cases discussed range from fines to points deductions in the standings.

The crimes

It is obviously early to understand what will happen because the investigation must play out. On the one hand, the obstacle to the exercise of the functions of public supervisory authorities is not the only potential crime on which the Prosecutor’s Office focuses.

It should not be forgotten that in April 2023 searches were carried out in Luxembourg (in the offices of Project RedBlack and Rossoneri Sport) with bankruptcy as a possible crime. Previously there had also been talk of embezzlement. On the other hand, the suspects can open a new front with the re-examination.

The review

The art. 322 of the Code of Criminal Procedure says that against the seizure decree issued by the judge, the accused and his lawyer, the person from whom the things were seized and the person who would be entitled to their return can propose a request for review.

Article 324 sets the deadlines at ten days from the date of execution of the provision. In essence, the lawyers would ask to evaluate whether the Prosecutor’s Office could order last week’s seizures. Can Furlani and Gazidis request a review? Will they do it? These are pending questions.

If this front were opened, relations with the public prosecutors would worsen and a first, rapid decision from the court would be reached, which could annul, reform or confirm the order under review. A crossroads which obviously can continue the investigation or, on the contrary, change its course.

Another possibility, which should not be ruled out, is that Furlani and Gazidis – through their lawyer – present the request for review to access the documents and then decide to renounce. We will know by the end of the week, at the beginning of next week at the latest.

What next?

The development of the investigation remains complex and difficult to predict. The PM they suspect that Elliott still control Milan, despite the closing of the sale on 31 August 2022 with the official transfer of shares to the RedBird fund, created by Gerry Cardinale.

It was a sale with which Elliott lent €560m to RedBird to be repaid in three years, therefore by autumn 2025 (vendor loan). After the closing, RedBird chose to appoint Giorgio Furlani and Stefano Cocirio as CEO and financial director respectively, two Elliott men. Gordon Singer, Elliott’s key man, still sits on the Rossoneri board of directors.

These are circumstances that have always made this sale very partilcular. RedBird, meanwhile, publicly defended themselves against the accusations last week: “The idea that RedBird does not own and control Milan is absolutely false.”

Interesting files

The choice of the Prosecutor’s Office to intervene with the searches is not causal. The Prosectutors Polizzi and Cavalleri took action following press rumours about the possible takeover, with minority or majority shares, of an Arab investor.

In short, the prosecutors feared that a new transfer of ownership (to PIF?) would make the status quo obsolete and would not allow us to see clearly. Hence the searches at the Milan headquarters and at Furlani’s home.

And now? The files and chats copied by the Financial Police are many and not easy to analyse quickly. It will take time, and the FIGC patiently waits.