LONDON, Sept 29 (Reuters) - Manchester City used "sham" commercial contracts as part of schemes to inflate revenue and understate costs by more than £900 million over nearly a decade, the Premier League said on Tuesday after an independent commission ruled the club guilty of serious breaches of financial rules.
The commission found City guilty of all charges relating to breaches of the league's financial rules over nine seasons, between the 2009-10 and 2017-18 campaigns, as well as three of four charges concerning their failure to co-operate with the investigation.
The club, which denies wrongdoing, said in a statement it would appeal "on the basis that the opinion contains clear material errors, of law, principle and fact, and is unsafe".
No sanction has yet been imposed, leaving unresolved the potential consequences for a club that has dominated English football over the past decade.
A significant punishment could affect past and future title races, European qualification and the distribution of tens of millions of pounds in prize money. The case has also raised wider questions about financial governance, competitive integrity and the Premier League's ability to hold its most powerful clubs to account.
'SHAM CONTRACTS'
An independent commission found that City arranged “sham” contracts that misrepresented the true agreements with several commercial partners and relied on similar agreements with others to inflate their revenue and reduce costs artificially, the league said.
It found that several sponsors were required to pay only part of the fees recorded in the relevant agreements, with the balance supplied by the club's owner Abu Dhabi United Group Investment & Development Ltd (ADUG).
The commission also identified arrangements funded by ADUG that allowed City to record lower operating expenses.
The schemes inflated City’s revenue and reduced their costs, creating the appearance that the club complied with financial regulations, the league said.
The report also found that a number of the club's witnesses presented false evidence at the hearing, which ran for 42 days, and some knowingly misled the commission.
The commission concluded that City would have breached both the Premier League’s and UEFA's spending limits “by a very substantial amount” had the agreements been reported accurately.
“The core decision... details how the club systematically broke Premier League Rules for nearly a decade," said Richard Masters, the chief executive of the Premier League.
Masters described the case and decision as “the most significant in Premier League history” but said key elements remained unresolved, most notably the sanction to be imposed.
"Now we have the Commission’s decision, we are committed to moving swiftly through the remainder of the process, to provide certainty for the League, our clubs and fans,” he said.
CITY TO APPEAL
City said they were disappointed and surprised by the commission's opinion.
"The Club is innocent of the accusations made by the Premier League and a comprehensive body of irrefutable evidence exists in support of all of its positions, relating to this case," the club said.
"Manchester City FC will now pursue the appeal avenues open to it, on the basis that the opinion contains clear material errors, of law, principle and fact, and is unsafe."
The club has until Friday to lodge an appeal. When asked by Reuters whether an appeal by City would automatically suspend any sanction, a league representative said they could not "get into the process" due to confidentiality.
'A SINGLE FALSE ACCUSATION'
City chief executive Ferran Soriano addressed staff in a video in which he rejected the allegations and accused the commission of supporting the league's "conspiracy theory".
"The whole Premier League case against us is based on a single false accusation, that the owner's personal money was somehow and secretly put into the club via some sponsors from Abu Dhabi," Soriano said.
"This is just not true. Irrefutable evidence has been provided to the Premier League commission that shows it could not happen and that it did not happen."
The announcement came near the end of the European Football Clubs general assembly in Copenhagen, leaving representatives of English clubs checking their phones during the closing minutes.
Representatives of Arsenal and Nottingham Forest declined to comment when approached. A Manchester United representative also declined to comment when contacted by Reuters.
EFC Chairman Nasser Al-Khelaifi reserved judgment on the case and praised Soriano's work as an EFC board member.
"His knowledge, you know, throughout his career is fantastic. That’s why I think they did a lot of positive things also," Al-Khelaifi said.
'LET ROUND TWO BEGIN'
British sports minister Lisa Nandy said the league's report was "incredibly stark" and called for a swift and fair conclusion to the case.
"This is not only causing a lot of concern for Manchester City fans. It's also obviously causing a lot of concern for all fans of Premier League football," she told the BBC.
"Premier League is one of our crown jewels. We need to see the investigation concluded swiftly and fairly, but swiftly particularly because we need to uphold the integrity of the game."
Yasin Patel, a barrister specialising in sports law at London's Church Court Chambers, said he expected City to fight "with all their legal might."
"Round one was to the Premier League, let round two begin," he added.
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