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Explaining the Barcelona board approval of the deal in the Neymar case

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Explaining the Barcelona board approval of the deal in the Neymar case

Making sense of the decision and the uproar that followed

After a meeting that lasted more than six hours, the executive board of FC Barcelona has decided to approve the deal that the Club's Legal Services agreed to with the prosecution and the State’s Attorney’s office with regard to the case surrounding the signing of Neymar Jr, currently being heard in the Courts of the Province of Barcelona, a deal which exonerates Josep Maria Bartomeu and Sandro Rosell of any responsibility, while the club assumes two tax offences for the years 2011 and 2013 and will pay a fine of €5.5 million. The decision was between “bad and very bad”, one of the executives is reported to have told Diari Ara’s Albert Llimos after the end of the meeting.

A statement released by the club says that “the agreement involves the recognition by the Club of an error in tax planning for the signing of the player, for the fiscal years 2011 and 2013, when they did not correctly withhold payments resulting from his incorporation. In addition, the Club has been exonerated from responsibility for the fiscal year 2014, which was also part of the proceedings.”

The message sent out by the board is that this is “a positive step, one that puts an end to a situation of legal uncertainty that could have affected the viability of the Club's sporting and economic plan in the coming years.”

In a press conference held after the meeting, president Bartomeu explained that the deal was approved with 14 votes in favor, 2 against (according to Catalunya Radio’s Francesc Garriga these are Carles Vilarrubí and Maria Teixidor) and 2 abstentions. Two board missing were absent and Bartomeu himself left the room when the voting occurred. The management of this situation will be put before the next General Assembly, whether an ordinary or extraordinary one, when the conference delegates must vote on whether they agree with the board’s handling of the issue or not. The approval of the deal itself will not be put to a vote before the Assembly, the president saying that the board was legitimized to make this decision for the club and that “it’s not necessary to ask the socis this question.” What will happen if the Assembly gives a negative vote for the board’s management? “If they tell us that we didn’t do well we will leave,” assured Bartomeu. There could be an extraordinary Assembly called if the board manage to finalize an important sponsorship deal, like for example the shirt deal, that would have to be approved by the club’s supreme governing body, but if that doesn’t happen this vote will happen at the ordinary Assembly in October. “It was the best decision for the club,” Bartomeu stated.

“We would sign Neymar again and in the same way, maybe changing a tax consultant,” the president said, while adding that “in operations like this one a lot of people are involved, so the responsibility is much divided. Signaling just one consultant is difficult…”

One of the reasons why it was decided to pursue this type of settlement was, according to Bartomeu, “the uncertainty of the interpretation of the laws, for example. It was a thing of opportunity; the club’s legal team has worked on this recently. The other road we could have taken might have been worse for Barça.”

He insisted that the issue was about “errors in tax planning” and defended his management and Rosell’s: “Rosell and I did nothing wrong. We had no responsibility. The club did. The prosecution and the State Attorney’s office exonérate us because we had no fault. We just signed a player. We accept the final and we make a deal to stop this process. We have made the best decision for Barça.”

Bartomeu also said that the club would not be in risk of being dissolved by the Spanish authorities in case it committed another criminal offense like this in the future, just that the eventual fine would be higher because the club has priors. “And now we have a special department, with a compliance officer, that makes sure that this doesn’t happen again,” he added.

In an informal meeting with some journalists on Friday, the club explained to them the favorable aspects of this settlement, as we explained here. They were told that in the case of the process continuing, the trial stage would require the club to deposit guarantees of €90 million (the €63 million from the fines and compensations requested by the prosecution from all the defendants plus an additional 30% as required by the law), which would affect the club’s debt ration and the economic management of the next seasons. But these €63 million aren’t exactly like that. The club’s part is approximately €28 million, the rest belonging to the other two defendants. The club would only have to pay the guarantees for Bartomeu and Rosell in case they weren’t able to pay those for themselves, as it was a case of joint liability. Bartomeu confirmed this yesterday: “We would have each had to pay our share. If we couldn’t have covered our part then the club would have had to compensate.” It’s also important to note that all the accusations made by the prosecution of the National Court, as explained here, were no longer valid once the case had been moved to Barcelona. The local prosecutor would have had to draft a new accusation file, that could have been identical to the one issued previously in Madrid or not.

Bartomeu also talked about how this might affect the other pending trial regarding Neymar’s transfer, the one opened after the Brazilian investment fund DIS filed a complaint with the National Court. “The uncertainty about the interpretation of the laws has taken us to an open trial in which the €40 million that we paid to Neymar’s father’s company are considered salary, but in the other case the prosecutor has included this sum in the transfer figure. Now we will know how we will play the game because we can’t forget that there’s a second case involving Neymar’s signing, the DIS case. I think that this decision will help in the other case, because now a criteria has been set: those €40 million are considered salary.”

Reactions to the agreement

Joan Laporta spoke to Rac1 about this agreement saying: “They’re signing a deal to save their ass and they couldn’t care less about the honorability of the club.” He evaluated the actions of Bartomeu and Rosell in this case as “undignified” and he assured that the current board shows “a cowardice that is incompatible with continuing at Barça.”

“We have to react to avoid this deal immediately. Neither the prosecution, nor the State’s Attorney can accept this,” Laporta commented.

“We have to study the actions that are required, efficient actions. The no confidence vote is an option, but beyond everything it would require unity among the members.”

For the former president it would be a question of mobilization “in order to stop this barbarity” that has supposed the exoneration of Bartomeu and Rosell “in exchange for Barça’s reputation.” He also considers that the deal is “very sinister”, because no one knows exactly what it contains. “That Barça accepts guilt for something that the people with responsibility did will have to be explained with more details.”

The former board member and candidate for the presidency Toni Freixa has also been very critical of this deal. He stated that “if there’s an action that deserves a no confidence vote it’s this one.” Just like Laporta, he is also willing to avoiding that this deal becomes effective, through administrative means.

Asked about his participation in the transfer of Neymar Jr., Freixa assured that “my participation was nonexistent. The club was managed in a presidential way, ask the other 18 board members if they felt like they were pushed aside.” He added: “I challenge Bartomeu to a public debate with documents in which we will see who really intervened in Neymar’s signing.”

“Today is a very sad day for the club,” the former club spokesman said. “With the deal with the prosecution and the State’s Attorney Barça accepts the guilt, accepts the crime. Now there will be a convictive sentence. It’s an episode without precedents in Barça’s history.”

He also commented that “the situation is very serious. In his press conference Bartomeu has had a cowardly performance. He caved in under the pressure of being accused. His performance was undignified and deceitful; he painted a picture that doesn’t exist. From my point of view and my position, you always have to defend the interests of the club. His case if one of management failure that he will eventually pay for. It’s a sad day for FC Barcelona’s members. They don’t deserve this.”

According to the Catalan paper El Món, a minimum of four sections of the members would have various actions against the club’s decision prepared. Of these four, three would be planning to take legal action against the board because they understand that its 21 members “aren’t legitimized to unilaterally make a decision that harms the institution and that will leave a mark on it for the rest of its existence,” according to one of them who considers the participation of other socis essential. The options that these groups are managing right now would be a Corporate Liability lawsuit – like the one the current board filed against Laporta’s board – including a contestation of the agreement and its posterior invalidation, a complaint against the board for a crime of disloyal management or the opening of a disciplinary case in the club’s own Disciplinary Committee, which could lead to the loss of membership if the board members would be found guilty, which would mean that they couldn’t be board members and would lead to an immediate call for elections.

According to the club’s statutes, article 74, paragraph g) “any action or omission by the member against the law, the Statutes, the resolutions of the General Assembly or Board of Directors, which causes material or moral damage of consideration to the Club, other members, players, coaches or employees of the Club” is considered a very serious infringement. The sanctions that can be imposed for very serious infringements are, according to article 75 of the same statute: “Prohibition from entering the Camp Nou or other Club facilities for a maximum period of one year and one day to two years; Suspension of membership for from 4 months and a day to 2 years; Loss of membership.”

The association Manifest Blaugrana has issued a statement today saying that it is gathering signatures from members who want to appeal to the club’s Disciplinary Committee about this and that “if like it’s more than predictable, the Disciple Committee will not take measures or won’t open a disciplinary case, we will keep “going up courts” until reaching ordinary justice if we have to.”

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