Újpest FC, the second oldest professional Hungarian football club is facing bankruptcy, the threat of dissolution and possible relegation.
If there is a conversation about Hungarian club football, one can not ignore Újpest FC. Although the team is not the most successful in Hungary, it is still one of the most important Hungarian clubs. As the second oldest football team, Újpest played the most matches in the first league, has 20 league titles and 8 cup wins. Moreover, Újpest has nothing to be ashamed of in Europe: they won the Coupe des Nations in 1930, finished the Inter-Cities Fairs Cup as runner-up in 1969, and won the Mitropa Cup two times (1929, 1939). But now, this team is on the verge of dissolution and relegation. The question arises: how did Újpest FC get here?
After their most successful period in the 1970s (7 league titles in a row),Újpest entered into the phase of decline. The 1980s and 90s only brought them mediocre results, the last time the team won the league was in 1998. The home ground, The Szusza Ferenc Stadion was renovated in 2001, and the owner invested some money into the club later, but the major successes eluded them. In the meantime, the debts of the club increased and eventually it was sold in 2011 October. The buyer was a Belgian businessman, Roderick Duchatelet, who paid a total sum of 1 euro for the club. He also took over the club’s debts, which at the time were about 1 million Euro. After this, the story became quite interesting.
Csongor Visontai, the legal representative of Újpest FC, summed up the story to Nemzeti Sport : “When Roderick Duchatelet took over the football club in Újpest, he knew that the Cyprian offshore company Spontefor Limited is the seller. This meant that certain debts and commitments should be paid; however, after some time new offshore companies which were not included in the contract turned up; and, as it was revealed later, their demands were questionable or not valid. (…) Roderick Duchatelet was paying for two years, which caused HUF 1.8 billion debt in 2012 and HUF 2 billion in 2013 to the football club. When a new Cyprian offshore company claimed another 620.000 Euro with a debt recognition letter signed by the manager, Mr Duchatelet said it is enough. He decided that he is not willing to pay millions for questionable demands from offshore companies.”
After all this, Duchatelet sent every contract to Belgium, where a graphologist examined those, and came to the conclusion that all of those were signed by the same man in the same time, even though the actual dates on the papers showed it differently. In the meantime, NAV (National Tax and Customs Administration of Hungary) started to investigate in 2012. The findings of the investigation support Duchatelet’s claims. It appears that a network of offshore companies were built around Újpest FC, which demanded money from the club with fake contracts, fictive accounts and committed other crimes (such as the cheating with valued added tax, VAT). NAV found out that before Duchatelet’s takeover, between 2008 and 2010, the companies that owned Újpest FC were owned by offshore companies located in Cyprus and the Seychelles. This means that the actual owners of the club were all offshore companies, although the players and István Csehi (manager) all named Sándor Tolnai and dr Péter Kovács as owner. These companies had many things in common: same location and managers, the accounts were at the same banks. All those accounts were handled by people connected to Újpest in one way or another, for example, by the aforementioned István Csehi and Dr Péter Kovács, as well as Tibor Kukorelli and Dr Ildikó Budai. The companies only made businesses with each other, although sometimes provided money for private purposes to Sándor Tolnai his wife. The investigation revealed that all of these efforts were made to conceal the origin of the money.
Obviously, the other side of is convinced that Duchatelet is only about to evade tax paying. István Csehi states in a press release that Ducahtelet is responsible for the recent debts and all demands were included in the original contracts. He also denies the accusations of forgery.
So shortly, a foreigner businessman bought a football club for a symbolic sum, also took over the debts of the club. He naively paid every request, but after some time the demands became questionable, so he decided not to pay. The problem is that as soon as theses companies realized that Duchatelet is not willing to pay any more, they initiated the dissolution procedure. If this claim will be approved and become legally binding, Újpest will lose the licence to play in the first league, and can only start the next season in the third division. To tackle this outcome, Duchatelet initiated the transferring of the the license from Újpest FC Kft. (the current owner) to Újpest 1885 Kft., a new company, which has no debt to offshore companies. This maneuver is possible because the law regulating the licence of football clubs was modified last year, thus giving more possibilities to transfer licenses.
Right now, the fate of Újpest FC is in the hand of the Hungarian Football Association (MLSZ), which is in the position to approve or disapprove the request for transferring the licence. So far, there is no decision in the case; however, Duchatelet announced on Friday at a press conference, fighting his tears, that he will leave Újpest if MLSZ decides to relegate the club.
The MLSZ will judge the case next week.
based on the articles of atlatszo.hu, nemzetisport.hu, csakfoci.hu
by Oliver Tamasi