Tag: Persepolis

Condemning report by auditors on Persepolis and Esteghlal activities.

General Accounting Office of the Government of Iran submitted its final report after a six monthly regular audit on the activities of the government ministries. This report included the auditing of both Persepolis and Esteghlal clubs as part of government properties. The eagerly awaited audit report on the Tehran clubs takes prominence after the parliament and public outcry created following the public exposure of players and coaches contracts with these two clubs. The astronomical figures that the clubs were paying their staff have shocked the nation that has suffered immense financial difficulties due to economic sanctions. Members of parliaments accused the two clubs of corruption and wastage of public funds while fingers were also pointed at some of the Ministry of Youth & Sport personnel accused of collusion with the management of the two clubs to deceive the public.

The audit report accuses both clubs of financial irregularities, shoddy dealings , unauthorized expenditure , payments to unknown bank accounts for unspecified services , lack of documentation on several large payments ,  violation of the state laws ,   accounting & bookkeeping practices that does not meet the public accounts standards , creating shadow accounts illegally depositing funds from club revenues, and several other minor violations.

 The extensive report which covered the activities of many ministries, including the Ministry of Youth and Sport, as the responsible ministry for both of the government owned sport clubs Esteghlal & Persepolis. The ministry has ordered these two clubs to generate their own revenue instead of depending on government handout and claiming public money at the time when the whole government is exercising belt-tightening policies.

 The damning report cast a shadow on the activities of both clubs that have been for years under poor authority’s oversight resulting in huge financial difficulties. Uncontrolled or unaccountable expenditures left both club in critical debt situation exceeding their ability to pay the creditors or balance the books in the forthcoming years. It is difficult to see how they can survive without a bail-out by the government.

The report included accusation that some of the clubs revenues from commercial activities like advertising and merchandise , were being deposited to unauthorized bank accounts not belonging to the official club bank account(s) on records.

The GAO was also critical about the fact that of those millions of public funds that two clubs have siphoned, little or none was channeled towards infrastructure, building facilities such as football pitches for the younger generation to utilize.  

This is not the first time that GAO has produced such critical reports. It is not clear if any action , will be taken against the culprits  apart from the customary changing of the guards  (chairmen and board members) of both clubs, which has already been carried out with the exit of previous chairmen of Persepolis and Esteghlal,  preempting the GAO report.

All bank accounts belonging to Persepolis Club has been suspended by a court order as a result of creditors’ claims and long over-due nonpayment of various bills including tax due by the government itself.

Olympic team coach start delayed due to legal complications.

Nelo Vingada, the Olympic team head coach was supposed to have started work with the Olympics squad preparing for the competitions ahead especially the Asian Games 2014 Incheon. However , the Portuguese coach has hit a snag.

Explaining the delay in Vingada’s commencement of work with the Olympics team, the Deputy head of the FFIRI , Seyed Hadi Ayttollahei said ” Because of Vingada’s previous stint as the head coach of Persepolis , there is some outstanding taxes that have not been paid. When we reviews the contract between the two parties, it clearly stipulates that Vingada had a two year contract with Persepolis and all taxes for the two years period should have been paid to the government on signing the contract by the club. Therefore Persepolis should have respected this clause and paid its due. This did not happen. Vingada only stayed 5 months with Persepolis and left. The Managers of Persepolis failed to clear the taxes issues and did not contact the appropriate authorities to resolve the issue. Now, the liabilities are even greater, because there is a penalty for non-payment and delays which will cost the club dearly. Persepolis have been very lax  and complacent and this has resulted in issues with Vingada’s current work permit and legal status”

“Unless Persepolis resolves this tax issue with the authorities, Vingada cannot commence his work in Iran. We urge Persepolis to act fast as delays will affect our preparation for the Asian Games.”

Currently , the squad is training under Human Afazeli who is working as a caretaker until the arrival of Vingada.

As if Persepolis does not have enough financial problems , this one regarding Vingada’s tax non-payment , is  added on the rest the club’s complex and crippling financial issues.  Persepolis, one of the most popular teams in Iran , has been struggling to pay it debts , wages , hotel bills and many outstanding bills accumulated through the years. Persepolis has up to today to pay Ajman club for Khalatbary’s remaining transfer fee, else the UAE club will file a suit with FIFA, and finally the tax man in Iran is in hot pursuit of the club for non-payment of many taxes.

 

Persepolis and Khalatbary on the brink of FIFA Sanctions.

Mohammad Reza Khalatbary and his club Persepolis are on the brink of suspension after the Club failed to pay the UAE League club Ajman the reminder of the payment for the player’s transfer.

Ajman has given Persepolis one week ( 15th April) to fork out US$ 250,000 outstanding from the player’s transfer deal. Ajman has claimed that the amount is already six month overdue and will not tolerate any further delays by the Iranian club.

Khalatbary signed a 1.5 Million dollar contract with Ajman last year, however before he even played a single match for Ajman, Persepolis came calling for the Team Melli Midfielder and on the assertion of the former CEO Mohammad Rouyanian , they managed to strike a deal with Ajman for his transfer back to Iran.

The deal raised many questions in the football circles, mainly because Persepolis had acute financial difficulties which were well publicized and known among all concerned. Somehow Persepolis managed to pay the transfer fee for Khalatbary , but the club refused to disclose the source of the transfer fee. This transfer occurred at a time when many Persepolis players and staff wages were not paid for several months. The Khalatbary transfer created some discontent in the dressing room.

Now, it has been disclosed that Persepolis has not paid the full transfer fee to Ajman.  The balance of US$ 250,000 must be paid within 1 week else Ajman will file a complaint with FIFA. If Persepolis fails to adhere to the clause of the transfer agreement, FIFA can rule to suspend Persepolis from football activities, ban it from transfer market (selling or buying players) , deduct points or impose a heavy fine.

While Persepolis is in a perilous position, Khalatbary may also be suspended if FIFA deems it necessary. That would be a severe blow to Carlos Queiroz who is preparing the squad for the World Cup. The rest of the Persepolis players with Team Melli should not be affected by any FIFA ruling against their club and will be allowed to play for Team Melli.

Zamani, the agent of Khalatbary , shed some light on the transfer details. He said that the agreement between the two clubs required Persepolis to initially pay US$ 500,000 then the second payment of US$300,000. Persepolis paid US$ 400,000 initially and then with a lot of delay, it paid US$ 150,000 , which was half the agreed amount it should pay to Ajman. Eventually , Hossein Hedayti , paid the remaining US$ 150,000 “

“However , there is still US$ 250,000 remaining and an additional US$ 50,000 as interest fees due to delays in payment,”

Zamani said that “FIFA usually makes quick decisions when it is faced with cases of nonpayment of contracts. All evidence and document shows that Ajman Club has the full right and as such Persepolis might face heavy penalties from FIFA and might regret delaying the payment.”

Persepolis Club on the edge of disbandment

A panic has ensued in the corridors of power in Persepolis club  as possibilities of Persepolis Club seizing activities has surfaced as result of financial difficulties and default on payments.

Persepolis , like Esteghlal, the two most popular clubs in Iran by far , are owned and run by the government. Both have been facing financial difficulties for many years. Although the government has been tolerant with the clubs demands , in the recent years and especially under the general difficult economical situation of Iran , the government has been reluctant to bankroll their activities, accusing the clubs of failing to generate revenues and operate within a reasonable budget. Although the government has promised for decades to privatize the two clubs, it has failed time and again to stand by its promise. The most obvious and clear calls to privatize the clubs came during the reign of  the ex-President Mahmoud Ahmadinejad, who  during his two terms has strongly promised to act upon the privatization , but he left the office without delivering on that promise.

In a series of developments , an official from the government’s Finance Ministry has recently declared that “the country cannot keep pouring money into the two Tehrani clubs who have failed for years to generate a sizable revenue to sustain their operation.” According to  government official , both clubs situation are getting worse every year with Persepolis facing several court cases due to failing to honor their financial commitments and contractual obligations. Following the public outcry and demand for investigation  fueled by the refusal of Persepolis players to train , the government has sent auditors to Persepolis club. Question of mismanagement , misappropriation of funds and corruption has been previously raised by some members of parliament who pressed the government to act much positively this time. The other motive for the audit was to check on the level of debts. The recently departed  club CEO , Mohammad Rouyanian , has publicly announced that he left the club with an equivalent of  US$ 2 million in debts , but the auditors have discovered that the actual debts of Persepolis, arguably the most highly supported club in Iran , is far higher that what the ex-CEO has claimed and is more like US$ 25 million and getting worse.    This figure, which has not been officially confirmed by the auditors nevertheless, conveniently leaked , is sending shock waves in the entire Persepolis organization and slowly reaching its large fan bases in Iran and abroad. 

While Persepolis player have gone on strike by refusing to train as the result of non-payment of their wages, Ali Parvin , the recently appointed Chairman of Persepolis, did not inject much confidence when he announced in public and private , that he is not promising anything to anyone and has no solution for the financial difficulties of the club!.  With such a statement and the discovery of the larger than expected debts of Persepolis , the situation has reached a critical stage. The bleak situation has lead to rumors of club defaulting on payments to staff and suppliers and hence announcing bankruptcy. The situation will prevent the club from completing its last 4 matches in the league, especially the matches away from Tehran. The only possibility for Persepolis to recover from such a dire situation is a government bail out.

With only a few months left to the World Cup , there is some hope that the government might find the will to help the struggling club,  as a face saving exercise. However , this same government has failed to properly support Team Melli program and inject funds in FFIRI despite all the public support and statements by the ministers and government officials , so what are the chances that Persepolis will be bailed out?

For the good of football in Iran and Team Melli , we hope that a quick solution is reached , else Persepolis and most probably Esteghlal , might seize to exist in this form. The clubs could be disbanded and re-formed into a new entity and very possibly with a new names.