The head of the Central Court of Instruction number 5 of the National Court, Santiago Pedraz, has proposed sitting the former president of Granada CF on the bench for a crime against the Public Treasury Enrique Pina; but also to the Italian businessman Gino Pozzo Linda, as the “real owner” of the club; to the “main collaborator” of the previous one, Jordi Trilles Pardo; already Raphael de la Riva, which is the owner and administrator of the Luxembourg company Fifteen Securitisation SA. This firm, which supposedly lent money to the club for its signings, was actually used to “empty the treasury” of the sports limited company and defraud the 2013 Corporation Tax, according to an order dated November 7, which has been EL PERIÓDICO DE ESPAÑA, from the Prensa Ibérica group, had access.
Sources of the defendants have defended before the questions of this newspaper that Quique Pina only dealt with the sports management of the club and that Pedraz’s resolution has already been appealed before the Criminal Chamber of the National Court. In the same sense, they highlight as positive that the judge has given up charging them with a crime of money laundering. They also warn that they have presented an incident of annulment of the proceedings that could prevent them from being seated in the defendant’s dock.
“The reality is that this alleged financing granted by the Luxembourg entity to the club involved a very high cost, which can be quantified in absolute terms at more than forty-five million euros, and in terms of the interest rate, almost 50% per year”, highlights the instructor. Between 2011 and 2018, the firm Fifteen Securitization SA contributed around seventeen million euros to Granada CF SAD, while it received more than sixty-two million euros, which makes the cost for the football club of this external financing model exceed 50% annually, continues the magistrate.
The magistrate concludes, therefore, that the investigations carried out have provided “solid indications” that the person under investigation Gino Pozzo Linda launched “a criminal plan” which, after gaining control of Granada CF SAD in 2009, allowed it to avoid taxation of capital gains obtained by the club on player transfers.
From Luxembourg
Through a “complex strategy” they “artificially transferred to Luxembourg” the funds, with which they obtained “a notable economic profit to the detriment of the public Treasury”, completes the judicial resolution, which places fraud at 9,441,897 euros.
The order also includes as defendants the Sports Limited Company of Granada CF and the Luxembourg company Fifteen Securitisation SA, who supposedly financed the signings of the club, which is now a member of the Second Division. In exchange for advancing these payments, the club undertook to transfer 95% of the amount that would be obtained in the future for the transfer to a new professional football club. A supposedly round business for both parties.
However, the reality was very different, according to Judge Pedraz. In 2009 the defendants gained control of Granada CF, and at that point began to deploy a set of “opaque structures” to hide the true owners of the funds they disbursed.
To gain control of the bankruptcy process, the investigated Gino Pozzo Linda acquired a significant percentage of the credits of the sports entity, making use of the Spanish company Daxian 2009, SL, which was key in the operation. The Italian businessman controlled this firm, as he was formally a majority shareholder in the capital, and the Luxembourg Albanos Trust SAused in operations under suspicion.
pina, administrator
The plan to control Granada CF is confirmed in the content of an email dated June 25, 2009 whose sender is the investigated Raffaele de la Riva, y whose recipients are Jordi Trilles Pardo and Gino Pozzo Linda. The aforementioned message contains a calendar of actions designed for this purpose. Thus, that same day it was agreed to transfer the shares of the company Daxian 2009 to Enrique Pinawho was appointed administrator.
The following instructions reveal crossed credits, which complicated the investigations of the Judicial Police. At the end of the entire process, the aforementioned Daxian 2009, which was in the name of Enrique Pina, was transferred to the Albanos Trust, represented by De la Riva: “The strategy is completed with the granting of full powers both in sports matters and in the ordinary management of Granada CF to the investigated Enrique Pina“, stressed the magistrate.
On August 2, 2011, Daxian 2009, SL subscribed 34,910 Granada CF shares for a total of 5,236,500 euros, representing 98.13% of the capital of the sports limited company, which amounted to a total of 5,336,100 euros. Already at the head of the Andalusian club, the defendants took a second step. They bought, using the company Orange Chiffon Trading Limited, based in the United Arab Emirates, the rights of several professional players of the Granada CF squad for a joint price of 8,600,000 euros.
“Accounting Artifice”
According to the instructor, this operation “can only be described as an accounting device. […] With this transfer, the club obtains a substantial capital gain of 8,600,000 euros, at the same time that it will see its equity balance reduced and with it the minimum share capital of the future sports limited company”, completes Pedraz, who recalls that the judge who in charge of the bankruptcy process reached the same conclusion, since it described the operation as “an accounting artifice whose real purpose was reduce the amount of the share capital of the future sports limited company and not get rid of the federative rights over the players”.
Once this first phase of the plan is completed, the judge continues in his story, the fraud strategy so that Granada CF SAD would not pay Corporation Tax for capital gains that it could obtain with the transfers of its players.
For this, the defendants resorted to the alleged financing of the Luxembourg securitization entity Fifteen Securitisation SA. They signed a joint account contract, which would allow the club to undertake the signing of a group of players in exchange for 95% of the amount that in the future was obtained by its transfer.
7.5 million
The promotion in 2011 of the club to the First Division allowed those investigated to increase their volume of income. Pozzo Linda made numerous transfers between his companies so that Granada CF could solve his financial problems, for which he came to have an amount close to seven and a half million euros in his treasury.
With positive accounts and the predictable increase in income for the team, which was already playing in the First Division, Granada CF did not need external financing to buy players. However, those investigated formalized several operations with entities linked to Pozzo Linda, which reduced the treasury of the ‘Nazari’ club to a minimum.
The judge also points out that Pina and the rest of those investigated They made “a strategic movement” that sought to protect themselves from the Treasury. Thus, shortly after Pozzo took control of the club, the investigated Jordi Trilles raised a query to the General Directorate of Taxes that sought to protect itself against a possible administrative action of tax verification.
hid information
But in the aforementioned consultation, the club hid relevant information that would have changed the meaning of the Treasury’s response. For example, the real owner of the club and the Luxembourg company that is used to finance the transfers is the same person, the investigated Gino Pozzo. There is also no reference to the use of four companies from the United Arab Emirates; but above all it is not mentioned that the funds that are invested come, in a very important part, up to 5,900,000 euros, from the club itself.
In addition, Granada CF SAD did not follow the criteria that the advisory body provides in its response, since it also concealed in its annual accounts the financial expenses incurred and their “extremely high amount”.
“In short, it hides that the only thing that exists is a structure made up of a multitude of merely instrumental entities. which allows the club’s treasury to be emptied to create a need for external financing and, based on this alleged financing, transfer the capital gains obtained with the players outside our country”, highlights judge Santiago Pedraz.
I didn’t need it
In this scenario, every time Granada CF acquired or sold the rights to a player, it received or transferred the funds to the Luxembourg entity. “If that figure is compared with the funds that come out of the club’s treasury for no other purpose than to create the need for external financing (7,100,000.00 euros), the only conclusion must be that the club did not need that external source of financing and he could have faced this difference with resources that would have been generated in the course of those four seasons”, continues the order, which even recalls that the funds that the Luxembourg company gives to Granada CF for the signings came mostly from the own club.
This conclusion is obtained from the analysis of a document called ‘Utilizzo fondi dal 28.10.2011 al 15.03.2013’ that contains the information on the movements of funds that are invested in the club both to gain control and to sign players.
Most of these funds (5,900,000.00 euros) came from the club’s treasury “with no other purpose than fabricating the need for external financing”, says Pedraz. And for this they designed a strategy, which began with the club’s money, which first went to two companies; then four others from the United Arab Emirates, and finally the Luxembourger who lent the money to Granada CF.
As an example of this operation, the club transferred €4,000,000 to Orange Chiffon Trading Limited and invested €1,900,000 in a bond issued por otra firma luxemburguesa: Wealth & Capital Securitisation SA.
Arab Emirates
From these two entities the money was sent through various companies in the United Arab Emirates to return Fifteen Securitisation SA. This used the money from Granada CF for the alleged financing of the club in the acquisition of the rights of the players. The last Luxembourg company, when it receives the rights of the players, issues bonds backed by those rights, which are acquired by various companies owned by Gino Pozzo Linda, who thus becomes the beneficial owner of all investment.
The judge concludes that the The Pozzo family owns the club, but also the English team Watford and the Italian team Udinese. He also highlights that an audit links the Luxembourg Fifteen Securitization SA to the supposed majority shareholder of the club (Gino Pozzo, but through Raffaele Riva, manager of the Luxembourg company and president of Watford).
However, the club’s management specified in an audit that as of December 31, 2014 this Italian family was not the owner of the club, a fact that Pedraz regrets that he cannot verify since the audit did not have access to the shareholding structure of the club.
9 months in jail
According to the newspaper El País, Pina and several of his relatives recently agreed to a sentence of 9 months in prison after admitting that they promoted “various asset emptying maneuvers” to avoid their million-dollar debt with the Treasury. creating a whole network of “front men” and “instrumental” companies.
To questions from this wording, a spokesman for the club has assured, literally: “The events that are investigated in the referenced proceedings occurred before 2016, when the current owner acquired Granada CF. Granada CF will defend your rights throughout the procedure“.