Corinthians threaten to shift power balance

Published on tribalfootball.com, February 27 2005

Seismic changes are afoot at Sao Paulo’s biggest club Corinthians. Andy Brassell looks into the mystery surrounding the ‘Brazilian Chelsea’

It won’t be news to you that David Beckham is far more lucid with a ball at his feet than when addressing the world’s media, but even taking that into account, his recent comment that what Chelsea are currently doing ‘is great for football’ was perhaps more questionable than most. Yet any reservations the press may have had about the nature of the Stamford Bridge club’s rise have been murmured. Let’s face it, Chelsea make great copy, and as a one-off have an amount of freakshow fascination value too. Except maybe they’re not a one-off after all.

In November the British businessman Kia Joorabchian signed a ‘partnership deal’ with Brazilian side Corinthians on behalf of Media Sport Investment (MSI), which despite the official wording of the agreement has been more widely reported as a takeover. The deal is initially to last 10 years, with MSI pledging at least US$35 million to the club, while claiming 51% of any profits and offsetting any losses that might be incurred. On top of this, Joorabchian gave the club a ‘pleased to meet you’ gift when the deal was ratified in December. He spared no expense – the gift was the signing of Carlos Tevez, the impressive young top scorer of Argentina’s Olympic triumph, from Boca Juniors. The fee? US$22 million (around £11.4 million) – by some distance the heftiest transfer outlay ever by a Brazilian club. The story of the journey from near-bankruptcy (around $20 million of the MSI money will go to paying off the club’s colossal debts) to clutching cigar and glass of finest port, gazing down on the masses, is thoroughly familiar. To say there was an echo of Roman Abramovich’s takeover of Chelsea would be beyond understatement. However in a culture where clubs now exist to sell for subsistence, the word ‘shock’ could never cover what the rest of Brazilian football was feeling.

Perhaps this is why Joorabchian and MSI have received such a lukewarm welcome in Brazil. Abramovich shook up the Premiership but it wasn’t the first time a Premiership club – or even Chelsea – had seen their prospects transformed by a large investor. However, in context, the Corinthians deal seemed just too good to be true. Firstly, very little is known about MSI, either in Brazil or even in the UK, where the company is registered (to the address of an accountancy firm in central London). It was only set up in August, initially at least with the specific aim of formally entering into negotiations with Corinthians. Secondly, the identity of Joorabchian is about as clear. The mystery surrounding MSI’s frontman in the deal showed in the Brazilian press in the days and weeks following the completion of the deal, when he was variously described as Iranian, Canadian and British (he was in fact born in Tehran and lived in Canada before studying in Britain, where he holds a passport). His details in the register at Companies House in London give three variations of his name, two different birthdates and two different nationalities.

What sections of the media and many Corinthians fans have found most concerning is Joorabchian’s steadfast refusal to name any of the investors behind MSI. He insists this is normal investment practice, but it’s just given rise to rampant speculation as to the source of the money financing the deal. The most persistent rumour has been that Joorabchian’s backer is Boris Berezovsky, the powerful Russian oligarch and former business partner of, that’s right, Roman Abramovich. Joorabchian was unknown in 1999 when he headed an investment fund, American Capital, which bought a majority stake in the main independent Russian daily newspaper, Kommersant. Editor Raf Shakirov was sacked, claiming Joorabchian was a stooge for Berezovsky. Joorabchian denied this but transferred ownership to Berezovsky within a month. He denies that Berezovsky is involved in MSI. The general consensus in Brazil is that the money is from Russia however. Given Roman Abramovich’s determination to forge links with continental clubs, it’s no surprise that his name has been linked with MSI. Spanish sports daily Marca even claimed in December that Abramovich held a 15% stake in the company, though this has been denied.  

Following the two widely-documented and high profile CPIs (Parliamentary Commissions of Inquiry) in recent years, into the relationship between the CBF (the Brazilian Football Confederation) and Nike and also into the state of the national game - both of which uncovered layers of corruption and double dealing throughout the game – Brazil is highly sensitive to any suggestions of skullduggery. So ABIN (the Brazilian Intelligence Agency) have been liaising with Interpol to fully check the deal out. PPS agent Romeu Tuma Jr. has spent the last few months compiling a dossier on the Corinthians deal. São Paulo monthly Caros Amigos said in its February edition that Tuma’s suspicions about the deal increased when he obtained a document in December originally from the British Government and sent to the intelligence agencies of both Brazil and the US (ABIN and the FBI) asking them to monitor the financial investments of Joorabchian. He was also interested and newspaper reports suggesting that Tevez could be resold to Chelsea and the possible purchase of the ex-Palmeiras striker Vagner Love from CSKA Moscow. Abramovich was of course cleared by UEFA of a conflict of interests earlier this season over his company Sibneft’s shirt sponsorship of CSKA – Sibneft being the company he made much of his fortune in working alongside Berezovsky in the late ‘90s.

Negotiations over Vagner Love’s transfer have been protracted despite the player’s eagerness to return to São Paulo, with MSI willing to pay $12million maximum for his signature, according to sports daily Lance! Joorabchian’s Brazilian spokesman Fernando Mello says this proves there is no connection between the clubs. Tuma however is not convinced. He has in mind the case of Flamengo, the biggest club in Rio and indeed Brazil as a whole. The club entered into a similar partnership to the MSI-Corinthians one, with a Swiss sports marketing company, ISL. The CPI into Brazilian football uncovered strong evidence of money laundering during the period of this partnership, and this week former president Edmundo Santos Silva - who, Alex Bellos recounted in his book Futebol, broke down in tears while giving evidence to the CPI - was hit for a claim of R$300 million (around £57.6 million) compensation by the club. Silva is the subject of ongoing civil and criminal proceedings. Under his stewardship, the club spent profligately and lost $80 million in 14 months of high-profile signings like Denilson before ISL slipped into bankruptcy.

Tuma claims there could be similarities in Corinthians’ dealings. He told Caros Amigos: ‘If MSI’s objective really is money laundering, the transactions involving Tevez and Vagner Love would fit perfectly. In the case of Tevez, the laundering would be completed with his sale to Chelsea, as well as the purchase of Vagner Love from CSKA also for an astronomical sum, though they’re not yet completed.’ While the signing of Tevez was presented by Joorabchian as a present to the club, outside the terms of the formal agreement, the spending hasn’t stopped there. The highly-gifted young striker Carlos Alberto has returned to his homeland from Porto – at an estimated £6 million cost – and as well as Vagner Love, MSI is actively pursuing the signings of Kleberson and another top-class young Argentine, Javier Mascherano of River Plate, who is said to have received the close attentions of Real Madrid, Manchester United, Arsenal and, of course, Chelsea among others. MSI are already thought to have offered $15 million for him. Joorabchian has talked of creating a superteam, a sort of South American answer to Real Madrid, as he aims to cash in on the name of the second-best supported team in Brazil.

While there is no evidence to suggest that players are being sold between clubs with the same owners, Joorabchian’s failure to give the deal any semblance of transparency looks as if it may cost him. On February 4, the Departments of Immigration and Work and Employment instructed the Federal Police to ask Joorabchian to leave Brazil, due to his ‘illegal management practices’. Although Joorabchian entered Brazil legally on his British passport, he doesn’t have the necessary authorisation from the Department of Work and Employment or the Federal Police to do company business or sign documents on behalf of MSI. The Coordinator General of the Department of Immigration, Hebe Teixeira Romano, claims that this mean the contract between MSI and Corinthians is null and void. An MSI statement said this was simply an oversight and Corinthians president Alberto Dualib, the main broker of the deal in the face of stiff opposition from much of his board, pledged his support to Joorabchian.