The International Boxing Association (Aiba) has maintained that its finances are in order amid reports in the Guardian and New York Times that it is facing severe financial difficulties owing to payments claimed by two commercial entities.
The UK and US newspapers have both made the claims that relate to Azeri company Benkons and Chinese firm First Contract International Trade (FCIT). The reports represent the latest troubles Aiba has faced in recent months, but the Guardian, citing insiders within the world governing body, said the new claims are the stiffest challenge to date.
Benkons has demanded that Aiba immediately repay a $10m (€8.78m) loan from 2011. The Times, citing internal financial records, said Aiba had a cash balance of more than $9.5m in only one month during the past year, adding that the current figure is little over $7m.
However, Aiba told The Guardian that it is “capable of reimbursing such guarantee on the basis of the repayment schedule agreed with Benkons”. In a statement, it added: “It must be noted that the bankruptcy of a Swiss association requires under Swiss law an official confirmation, and we are far from having such judgment. Legal proceedings generally take years.”
Benkons states talk of a repayment schedule is “false” adding that it rejected such a proposal earlier this year. In a letter to the Aiba acting-executive director, William Louis-Marie, dated July 19, Benkons writes: “We have not agreed any repayment schedule nor have we signed any written agreement. We hereby demand full repayment of the $10m loan to Aiba, which president (Ching-Kuo) Wu personally guaranteed on behalf of Aiba, and which was due in 2013. If we do not receive immediate and full repayment of the $10m from Aiba we will instruct our lawyers to take legal action against Aiba and its president for recovery in the Swiss courts.”
The Guardian said Aiba has also been served documents by FCIT in Hong Kong demanding it pay back an 18.99m Swiss francs (€17.2m/$20.1m) investment into Aiba’s marketing arm, BMA. FCIT has also questioned Aiba’s signing of a partnership with the Alisports arm of Chinese e-commerce giant Alibaba Group.
The latter deal, signed in May, takes effect from January 1 and will lead to “significant investment” into Aiba competitions, media and digital platforms, as well as the creation of an internet television channel. “These actions have already seriously breached all business ethics and even the Swiss law,” FCIT chairman Di Wu said. “The reality turns out to be far away from what the president Wu committed.”
In response, Aiba has said it took action after FCIT only committed 18.99m of the proposed 35m Swiss francs in investment. The governing body added: “FCIT’s loan against BMA is subordinated to all un-subordinated debt of BMA and that, in case of bankruptcy, the loan is waived to the extent the liquidation proceeds are not sufficient to repay it. Based on these assertions and the validity of the subordination agreements, we remain confident that the claim to reimburse the 18.99m is not valid.
“The term ‘mismanagement’ is also disputed. The current financial crisis of BMA results from several factors and we would like to point out that all strategic decisions have been approved by all BMA board members including Mr Di Wu, but the fact FCIT did not complete its investment appears to be one of the main factors having led to the financial crisis of BMA.”