The Corriere della Sera newspaper claims Milan owner Yonghong Li is insolvent and his assets will be auctioned off on Taobao (the Chinese version of eBay).
This is certainly not the first time questions have been raised on the financial status of the businessman, as the New York Times and financial paper Il Sole 24 Ore also ran investigations pointing to a lack of funds.
However, this latest report suggests the situation has precipitated to the point where Yonghong Li is essentially bankrupt.
Packaging company Zhuhai Zhongfu, valued at €60m and of which his holding company owns 11.39 per cent, has been ordered on sale via an auction by the tribunal in Futian to repay the Jiangsu and Canton banks.
A few days ago, the China Securities Regulatory Commission also announced the start of an investigation into illicit practices from his holding company Shenzhen Jie Ande for hiding their bankruptcy for months.
He spent €740m to buy Milan from Silvio Berlusconi, who had been at the helm for over 30 years, but was only able to complete the purchase via a massive high-interest loan from vulture fund Elliott Management.
Now it’s claimed Yonghong Li not only can’t repay that loan, but he is also being sued for unpaid debts by two banks and the tribunal will put his assets up for auction via Taobao.
The Corriere della Sera reports Yonghong Li only had €100m of his own assets to begin with, funding the purchase through €300m from Elliott and €340m in offshore funds.
The timing outlined by the report suggests Yonghong Li was already insolvent by the time he was completing the Milan takeover in April 2017 and the original ruling to sell Zhuhai Zhongfu came in February 2017, but was held up by appeals.
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