Valencia This was the trial between LibertadVCF and Valencia for the management of Meriton

Meriton’s management at the head of Valencia Club de Fútbol continues to speak beyond sports. This Monday the Che directive, represented by its lawyer Fernando Badenes, had to go to the City of Justice in Valencia to be present at the trial for the demand that Libertad VCF, represented by Alvaro Sendra, has filed against the entity, considering that various decisions adapted by the club’s leadership are “for the exclusive benefit of Peter Lim and against the interests of the entity.”

Child three aspects key to break down in the lawsuit filed by the association:

The first is the modification of the regulations by the club so that the Meetings can only be attended by shareholders with 3,598 shares or more.

The second, the high rise in management salaries considering it “abusive with respect to the financial situation of the entity”.

The third, the loan that Lim granted to the entity a year ago of 16.5 million euros, keeping as guarantees the rights of six footballers, considering that there is a “conflict of interest”.

The complaint took place on January 10, 2021 and this Monday she was seen for sentencing after a trial in which the following arguments were presented, both by Libertad VCF, represented by lawyer Álvaro Sendra, and by Valencia Club de Fútbol, ​​represented by lawyer Fernando Badenes.

Limit of shares for attendance at the Shareholders’ Meeting

Liberty VCF: The association considers that modifying the statutes of the SAD so that only those shareholders who meet 3598 shares is an abuse of the right that “the only thing he seeks is to avoid criticism”. Libertad focuses not so much on the act itself (which it considers legal since it is a private company), but it does in consequence thereof considering that the club and the shareholders as a whole are harmed since only three shareholders own that number of shares of the 48,341 partners. Despite the fact that the club has facilitated the delegation of actions to attend meetings, the association considers that this tool must be subsidiary not used as a usual rule. They conclude by exemplifying that for a shareholder to be able to attend the meeting (on average a shareholder has 11 shares), they must, in a period of 25 days (from the time the meeting is called until it is held), gather the shares of 317 partners, something that in the previous meeting only specific people could carry out and “not people on foot” he wields, such as businessmen, supporters club members, etc. “It is easier to attend a meeting of Santander and Telefónica than one of Valencia” they conclude.

Valencia CF: The entity’s lawyer considers that There is neither fraud of law nor abuse of rights since according to the law, in a meeting the will of the majority must be respected, something that can be done by delegating actions to certain people. Said article to which they allude (12.39.2) does not go into “specific cases such as the limitation of people”, according to what is argued since “jurisprudence cannot enter into the company’s will”. The club’s lawyer argues that the limitation of actions has occurred to “facilitate the organization of meetings, save costs and enable their orderly development”. In fact, he states that with the new delegation system all shareholders can vote and not only those with 9 shares or more (a limit that existed until a year ago). It is also argued that any shareholder can ask their question before the meeting with a statement to the club and that they are answered. It concludes by noting that clubs like Atlético de Madrid, Granada or Málaga follow a similar process.

Loan from Peter Lim for 16.5 million euros

For this specific point, a large part of the arguments of Libertad VCF were based on the testimony of Joaquin Saleswitness in the case who has participated in the drafting of various documents to which repeated references are made regarding the pledging of players and the loan guarantees of Peter Lim to Valencia worth 16.5 million euros.

Liberty VCF: The association’s lawyer, supported by the testimony of Sales, explains how the loan that was requested from the entity was to pay the debt to BankiaThe club’s main creditor, something that was done in mid-June 2020 to make a payment that was due on July 1, a “speed” that from Libertad they do not understand. The lawyer also points out the short maturityor that he had a loan like the one mentioned, that expired only 4 months laterin October 2020 and insists on knowing who was the interlocutor with Joaquín Sales and his company, if Meriton Holdings or Valencia -to which a conclusive answer is not obtained-. Sendra continues his argument by alluding to a conflict of interests since Joaquín Sales, the aforementioned witness, He is a partner of Germán Cabrera, the club’s lawyerand in fact Sales himself and his company advised Meriton on the club’s takeover in 2014so that doubts that the conditions of the loan are beneficial for Valencia and yes they are for Peter Lim and Meriton Holdings. The lawyer alludes to the pledge of four players as collateral for the loan: Ferran Torres, Mouctar Diakhaby, Gabriel Paulista and Kondogbia, as well as the change of Guedes by Ferran Torres and Wass by Kondogbia, after the sale of the Spanish and the French.

Valencia CF: From the entity they put beyond doubt that the loan guarantees for four footballers are in beneficial conditions for Peter Lim and not for Valencia. They do so, stating that Bankia offered alternative financing to Valencia for the payment of the loan “in less beneficial conditions for the club”because in addition to the pledge of the rights of “several players”, also television rights were included. Furthermore, if Bankia’s option had been accepted, in the event of the sale of a pledged player (as was the case), the club could not change the pledge from one player to another (as was done with Lim’s loan) and the club would have been forced to pay. It is therefore insisted that Lim’s loan is “beneficial for Valencia” and not for Meriton Holdings, so rule out conflict of interestin fact they expose how after the sale of Wass, Lim has not received the corresponding money since the collection guarantees disappeared after the capital increase of 43 million euros. It concludes by clarifying that despite the early original expiration of the loan of 16.5 million euros, it has been postponed: “First from October 2020 to September 2021 and currently the limit is September 2022”.

High salaries of the board of directors

Liberty VCF: The association’s lawyer dismantles the argument made by the defense after the preview in which he alluded to good sports results as a reason for the salary increase of various members of the board of directors. The lawyer points out that sports results do not influence wages and yes it does the economic condition of society: “In the 2019-2020 campaign, when Messrs. Anil Murthy and Kim Koh raised their salaries, Valencia lost 8 million euros, becoming in a situation of cause for dissolution” he explains. Sendra also exposes a conflict of interests between the aforementioned directive and Peter Lim from which Valencia CF is harmed since the appointment and the salary of said board of directors is raised by the maximum shareholderwho is directly related to the persons mentioned. In addition, the lawyer uncovers that despite the high salaries, in the contract of both there are no work obligations that are prescribed as such. Sendra also demonstrates the salary of both:

Anil Murty: 460,000 fixed annual euros plus the payment of rent for the home, his children’s school, international medical insurance, an official car and a flight to Singapore for both him and his family. To the amount mentioned, some variables are added that are based on what the board of directors dictates.

Kim Koh: 200,000 euros fixed annuls plus the payment of 4,000 euros per month for rent of the home, international medical insurance, official car for 3,000 euros and two round trip flights to Singapore. To the amount mentioned, some variables are added that are based on what the board of directors dictates.

Libertad VCF’s lawyer also focuses on the “obscurantism” of the accounts and their “opacity” as they are not defined the ratios of salary variablesas well as that the accounts of Valencia they do not represent the faithful image of the club.

Valencia CF: Badenes repeatedly repeats that it is not possible to assess whether the accounts reflect the faithful image of the club since that is not the demand that occupies them and that he does not understand change of legal basis “Now he says that the trial is for the true image and not for abusive operations, which was his original argument,” he says. In any case, the lawyer rule out conflict of interest since it shows that between Anil Murthy and Kim Koh there is “no contractual relationship between them and Peter Limso Lim’s appointment to the Council does not enter into a conflict of interest”, in fact, he sustains his argument that at the 2019/2020 Board Meriton Holdings was represented by two female attorneys and not Anil Murthy or Kim Koh. On the other hand, the lawyer who defends the club points out that it is in the contract that they are executive directors, so they do have functions. What’s more, justifies the salary of managers based on comparison with “similar clubs” such as Atlético de Madrid or Sevilla, the directors of the first club have a salary of 2% of the net profits, the directors of the second club have a salary of 1% of the net profits: “Valencia is halfway between Atlético and Sevilla” he exposes. Finally, the lawyer clarifies that the board of directors lowered his salary by 20% during the ERTE that Valencia experienced in 2020.

Legitimacy of Liberty VCF

Valencia CF: One of the points where more the Valencia lawyer has stopped has been in the legitimacy or not of Freedom VCF as an association and therefore of the trial that has taken place. It must be remembered that in the preview, the club already wanted to argue that the situation would not go to trial by not considering Libertad VCF as a legitimate claimant because “does not accumulate 1% of the shares to sue”. In fact, the club’s lawyer points out that in total the directors of the association they only have 23 shares and at no time have they shown to have the consent of the rest of the people who have been able to delegate their actions to sue the entity. The lawyer concludes his intervention claiming 16.5 million euros in costs if he wins the trial.

Liberty VCF: “It’s a formal error, is confusing partners of an association with the actions that this represents” he pointed Jose Perez, President of Libertad, at the end of the trial. Both he and the club’s lawyer they didn’t want to delve into the matter given that “In the preview Valencia’s request was canceled” but they did want to point out that “Their main argument is that we have no legitimacy other than to defend the management of the club.” For Libertad, the fact of having taken Valencia and its management to trial is already a “little win” although they concluded their presence at the Palace of Justice stating that “whether we win or lose, we will continue trying to inspect Lim.” Both parties expect a decision of the judge within a period of 30 and 90 days.