English Premier League team Sheffield United’s Australia-based shirt sponsor Union Standard International Group (USG) has gone into administration during an investigation into its business by the Australian Securities and Investments Commission.
ASIC has been investigating USG’s business in Australia, which includes the foreign exchange and derivatives trading platform USGFX, over allegations the company and its representatives acted unconscionably towards customers, The Sydney Morning Herald reported. ASIC this month suspended USG’s services, and the company entered voluntary administration.
USG has businesses outside Australia, including in the UK, that have so far not been affected by the Australian action. The Sydney Morning Herald reported that UK company records and ASIC filings by USG show the UK and Australian entities share directors. The UK business is majority-owned by Myanmar-based Hein Min Soe, who is also a director of the Australian business.
Sheffield United’s deal is with the Australian business, USG’s administrator, Peter Krejci of insolvency firm BRI Ferrier, confirmed to The Sydney Morning Herald. “The sponsorship is on the Australian balance sheet as a pre-payment to Sheffield United,” he said.
Sheffield secured USG as its main jersey sponsor in June 2019 in a three-year deal that started with the 2019-20 season, which was touted at the time as the largest-ever commercial transaction in the club’s history. The Sydney Morning Herald reported that it was worth about £21m (€23m/$27m).
Two weeks ago, the Premier League club issued a statement acknowledging it was aware of the Australian USG arm entering administration. It mentioned that USG continued to operate in the UK, but did not say how its agreement would be affected by the administration of the Australian arm. “USG Group, known as USG, consists of several companies, including USG AU, USG UK and others,” the statement said. “The news relates only to USG AU and does not influence the financial status or service of USG. The UK operation, USG UK, which is regulated by the FCA is not affected by this situation and continues to trade as normal.”
Last year, ASIC secured orders from Australia’s Federal Court restraining USG’s business in Australia. ASIC told the court it had concerns USG and its two representatives had “systematically engaged in dishonest and unfair conduct in the course of carrying on its financial services business in Australia, including preventing customers from withdrawing money from their accounts”.
Creditors to the Australian-headquartered group have filed claims that show USG owes A$30m (€18.5m/$21.1m). It has assets of about A$6m but may have access to A$40m held on trust in China, according to the report.