EU issues ultimatum to Spanish clubs

http://as.com/diarioas/2014/03/14/english/1394825492_840358.html

The European Union has made formal accusation against seven Spanish clubs (Real Madrid, Barcelona, Athletic, Osasuna, Valencia, Elche and Hércules) in three separate articles published earlier this month in their official journal. Investigations were opened in December, concerning clubs receiving state aid in breach of EU competition guidelines.

At the end of last year, the Spanish government submitted documentation relating to the allegations to the European Commission but their arguments have not convinced the Union’s legislative body who have set April 7 as the deadline for implicated parties to submit their account books.

Three separate investigations are underway: one involving Real Madrid, Barcelona, Osasuna and Athletic Club - all of whom have yet to be converted into public limited companies; the second concerns Hércules, Valencia and Elche who are accused of being the recipients of public-funded loans while the third revolves around the alleged transfer and reclassification of land between Madrid’s regional government and Real Madrid. The Commission states that in all three cases, the clubs may have to return any undue state aid they have received.

Real Madrid, Barcelona, Osasuna and Athletic Club are accused of possible tax privileges as a result of not being obliged to convert themselves into public limited companies in 1992. The former three clubs pay corporation tax at 25%, the latter, at 21% while the rest of Spanish clubs, who are PLCs, pay at the standard 30% tax rate.

A second investigation concerns possible benefits received by Real Madrid for the exchange of land in the Las Tablas district in 1998 which was returned in 2011 because, according to local authorities, it was classified for public use only. The Commission is not wholly convinced that the solution adopted by Madrid’s City Council was the most convenient or opportune for their own municipal budget.

The plot of land in Las Tablas was valued at 595,194 euros when it was transferred in 1998 despite the official accounting quote of 488,000 euros. Three years ago when it was returned, its value had rocketed to 22.7 million euros, 38 times its initial value. The Commission has expressed surprise that no independent evaluation of the land was conducted either in 1998, or in 2011.

The EC also requires a more detailed explanation of guaranteed loans totalling 118 million euros given to Valencia, Hércules and Elche – state-funded credit which the clubs have been unable to return. With regard to Valencia, Brussels is studying claims that the club received a 75 million euro loan from Bancaja which was backed by the State-owned Valencia Institute of Finance (IVF) and which was used by the club’s Foundation to acquire shares in the club.

Hércules and Elche are believed to have benefited from guarantees which allowed them to take out loans while they were suffering financial difficulties.

Each of these clubs should be firing all their lawyers.

way ahead of you, we haven't had a functioning upper management for a year now

i'm wondering what exactly they want to do with valencia as we're going to be sold in the next few months, i'm not sure how the eu will deal with new owners