Manchester City have confirmed they are appealing after being found guilty on all points by an independent panel in relation to breaches of the Premier League’s financial rules. The club’s statement said the verdict contained ‘clear material errors, in law, principle and fact, and that it was not safe’.
The club announced on Thursday evening that it had submitted ‘a comprehensive body of evidence in support of all its points’. The Football Association (FA) said the verdict against City had ‘significant implications for the integrity of the game’. ‘We are considering the decision and its implications and will take appropriate action,’ the FA said.
On Tuesday, it was confirmed that City were found guilty on all points in relation to breaches of the Premier League’s financial rules between the 2009/10 and 2017/18 seasons. The FA added that, as the process between the Premier League and Manchester City was still ongoing, it was not commenting further at this stage, but would ‘continue to monitor the development of events’. The powers available to the FA could see the governing body launch its own investigation into the matter, with the threat of further sanctions.
A source close to the BBC said City were expected to argue in their appeal that key sponsorship deals were funded by the authorities of Abu Dhabi, not the club’s owners. Among the findings of the independent panel was that City had entered into ‘false contracts’ with a number of commercial partners as part of a scheme to disguise in excess of £830m in funding. The Premier League said City had ‘breached the rules of the Premier League for almost a decade’.
The independent panel found that City ‘used funds’ to ‘mask the true extent of the club’s liabilities’. The findings prompted the Treasury Committee, which oversees the policies and administration of the tax authority, to question whether HM Revenue and Customs had requested the redacted documents contained in the panel’s report. Dame Meg Hillier, chair of the cross-party group, said she would ‘welcome HMRC’s assurance that it is aware of the importance of these issues and the public interest in this case’.
The letter followed a report by Tax Policy Associates which claimed City had not paid £12m in tax due due to a ‘false’ contract with former manager Roberto Mancini. The report stated that City could face a fine that would raise its liabilities to £24m. The panel consisted of three people, each with long experience in the legal field.
The appeal will now be considered by a new three-member independent panel, whose members have a similar legal background. One part of the Premier League’s rules states that the appeal process must be concluded within 12 weeks of the hearing, with the decision to be published within 30 days of that. Twelve weeks from Thursday, when the club said it had appealed, would be 24 December. That deadline could be extended if deemed necessary, so it remains uncertain how long the process will actually take. The relevant rule was added to the regulations this summer.
Previous precedents suggest that sanctions against City will be imposed only after the appeal decision, although this is not guaranteed. Therefore, a second appeal against any sanctions imposed on the club could follow later. The club’s owners, Abu Dhabi United Group (ADUG) – a private investment company owned by the UAE’s deputy ruler and vice-president, Sheikh Mansour – are said to have topped up the value of commercial contracts as part of a ‘hidden funding’ scheme of £830.69m. This, it is claimed, allowed the club to appear compliant with the financial rules of the Premier League and UEFA. The rules of the Premier League allow state bodies to sponsor clubs.
City’s main sponsor, Etihad Airways, said it was considering legal action against the Premier League, claiming the publication of the panel’s findings had ‘detrimental implications... for the airline, which was not named in the redacted published findings’. The UAE’s state-owned airline said it ‘strongly rejects any finding, conclusion or implication that the company was involved in inappropriate commercial arrangements’. Etihad is owned by the L’Imad investment fund, which is headed by the Crown Prince of Abu Dhabi, the son of the UAE’s president.
