Malta at the centre of 'paper' footballer transfers

Malta’s jealously-guarded tax rules are once again the focus of new leaks, this time from a leak of a cache of 18.6 million documents on tax avoidance and dirty deals on the sale and ownership of football players.

The massive cross-border investigation is based on documents obtained by the German news magazine Der Spiegel, revealing how football agents, middlemen and club officials are maximising their riches by ‘selling’ footballers… on paper.

The leaks throw a spotlight over a Maltese company’s role in facilitating the mysterious and inflated transfer of Romanian right-back Cristian Manea and the commission allegedly negotiated by the legendary footballer Gheorghe Hagi.

According to the documents, the Maltese company Dito Trading and Consulting was used to claim a consultancy fee that was far higher than the value of the 16-year-old player.

Manea had played only five games for Hagi’s local side, Viitorul Constanta, when he was picked to play for the Romanian national team in a friendly against Albania in June 2014. He was only valued at €300,000 by the website Transfermarkt.com at the time.

Three weeks after the friendly, on 23 June, 2014, Manea was transferred from Viitorul to Cypriot club Apollon Limassol for the handsome fee of €2.5 million – a high figure for an underage player.

The “secret” deal took place without any public announcement, and Manea continued to play for Viitorul as though the huge transfer had never even happened.

What the Football Leaks documents reveal is that a month before the deal, on 15 May, 2014, Viitorul – represented by Hagi as chairman – signed an agreement with the Maltese company Dito to “evaluate” the transfer of Manea’s rights from Viitorul.

In exchange, Hagi accepted to pay Dito the difference of any sum over €1.5 million from the Manea transfer.

So when Apollon offered €2.5 million for Manea, Hagi paid the Maltese company €1 million as a consulting fee – at 40% of the fee, almost double the usual commissions agents are paid.

Viitorul Constanta owner Gheorghe Hagi’s team accepted €2.5 million for Cristian Manea from Apollon Limassol and paid a €1 million consultancy fee to a Maltese company owned by football agents close to the Apollon ownership, but Manea never played for Apollon

So who owns Dito Trading?

The company is tax-resident in Malta, but it is owned by the Maltese legal firm E&S Consultancy (through its subsidiary Solv International) and Swiss football agent Marc Rautenberg.

Rautenberg is the registered director of Lian Sports – which mainly manages players from the Balkan countries – and which is also registered in Malta at the same address as Dito.

TheBlackSea.eu – one of the online newspapers collaborating on Football Leaks – believes the cash paid to Lian Sports, whose owner is Abdilgafar Ramadani, allows him and other associates to use Apollon as a “third-party owner” of footballers.

Indeed, despite the €2.5 million transfer to Apollon Limassol, Manea never went to the club. The transfer move was arguably not intended to sell the ‘player’ but only his ‘rights’. Third-party ownership, as it is known, is now forbidden under FIFA rules.

But as it happens, clubs can sell a player “on paper” to one club, even though he is destined to play somewhere else.

Indeed in June 2015, Reuters announced that the now 17-year-old Manea had signed for Chelsea FC for €3.1 million. But Viitorul also said that Manea’s destination was “still under discussion”. That same year, Manea ended up at Mouscron in Belgium on loan from Chelsea.

But Manea was still not even Chelsea’s or Viitorul’s player: he was still signed to Apollon Limassol.

TheBlackSea.eu suggests that Apollon Limassol appears to be transferring football players for non-sporting reasons. “International football players are bought and loaned out by Cypriot club Apollon Limassol in a scheme where they do not even need to set foot on the island of Cyprus. Instead the Cypriot club buys them out in what could be an ‘investment’ for non-sporting reasons. The players do not become part of the team. Their presence at the club exists only on paper, not on the field.”

From May 2015, FIFA banned the practice of third-party ownership – where a party independent of the player and his club held the ‘economic rights’ to the player. What this means is the ‘rights-holder’ gets to exercise influence over the player’s future movements.

Super-agents calling the shots on ‘paper’ footballers 

Pini Zahavi (left) is photographed here with Lian Sports owner Abdilgafar Ramadani (right)

One of Apollon’s shareholders with 16% is Sliva Trading, an offshore company owned by the Israeli super-agent Pini Zahavi, 73 (pictured left). He has been connected to the Maltese company Gol Football Malta, which paid €8.5 million to bail out the indebted Belgian side Royal Mouscron, and then sold it on for just €10 to another Maltese company, Latimer International Limited, owned by Zahavi’s nephew Adar and Solv International. Two of Zahavi’s relatives, Adar and Gil, sit on the board of directors of Royal Mouscron, where footballer Cristian Manea now plays: the argument is that both Apollon and Royal Excel Mouscron are part of a carousel used by Zahavi’s network to move players from place to place. He is photographed here with Lian Sports owner Abdilgafar Ramadani (right). The person at the centre is unconnected to the Football Leaks files.

Taxman chases Sanchez

Arsenal forward Alexis Sanchez was accused by the Barcelona public prosecutor of evading more than €900,000 in tax

Malta’s system of tax rebates – up to 85% – for foreign shareholders, leaves some €200 million for the State after billions in profits get booked into holding companies on the island. And it is this main attraction that has so many foreign-owned companies registered in Malta.

Arsenal forward Alexis Sanchez was accused by the Barcelona public prosecutor of evading more than €900,000 in tax, when in 2013 he booked a total of €1.1 million in profits in his Malta tax-registered firm.

It is claimed he simulated the transfer of image rights to the company, Numidia Trading, and failed to declare his earnings in full. The Chilean footballer is the 99% shareholder in Numidia Trading, the other 1% held by the Amicorp financial services firm, based in Ta’ Xbiex.

The Barcelona prosecutor accuses Sanchez of “simulating” the transfer of his image rights to a company described as a “purely instrumental entity” used to facilitate “fraud committed against the Spanish Treasury”.