Former Milan owner Li Yonghong has warned Elliott Management that ‘I’m ready to fight’ the ‘careless and predatory vulture fund’ for the club.
Li was recently ousted by Elliott for not honouring a €32m repayment, but in a scathing letter made public by Il Sole 24, the Chinese businessman accused the hedge fund of misleading him with its intentions and preventing him from selling Milan once it became apparent that he could no longer finance the club.
“It is with great regret that, as President, I address this letter to all fans, shareholders and employees of the prestigious AC Milan,” he said in a letter to Il Sole 24.
“Despite the numerous and incorrect rumours that emerged in the Italian and international Press, I can confirm that the Shareholders’ Meeting, called by Elliott for July 21, will sanction my exit and those of the directors I appointed to the club’s board.
“First of all, I would like to clarify the following. My purchase of Milan was neither an rash decision or one dictated by a passing infatuation.
“It stemmed from my passion for the team and belief in the economic potential of an investment in one of the noblest football teams in the world.
“Until June 30, 2018, I had paid almost €880m for AC Milan, of which only €280m was funded through Elliott, while I personally provided the remaining part.
“I was convinced that Elliott was a trustworthy investor and, above all, a partner to share the duties and honours of a stimulating adventure like the ownership of a team who, throughout their glorious history, have won, among other trophies, seven Champions Leagues and 18 Serie A titles.
“I made a mistake and only discovered it to my great detriment during my tenure. Elliott showed itself from the start to not be the partner I imagined but rather a lender totally disinterested in the complex management of a club of Milan’s standing, despite its control of the team’s board.
“All this happened despite repeated declarations from the fund regarding its alleged support for the club.
“in reality, financial support only came from me until that moment. I proceeded with a capital increase for a total of €88m for the benefit of the club under my ownership.
“The anticipated default was due to the failure to repay the €32m paid by Elliott on my behalf in June 2018. However, I would like to clarify the following.
“First of all, the funds needed to buy AC Milan were lower than the sum I paid due to the unfair financial covenants imposed by Elliott, which also has frozen part of the capital I invested in AC Milan, with the aim of obliging me to pay more than necessary.
“Secondly, of the €32m wanted by Elliott, €21m was repaid almost immediately. And that is not all. It was not possible for my staff and I to guarantee the commercial development we had in mind for the club because of the numerous constraints and limitations on corporate governance imposed by Elliott in its financing.
“Despite the obstacles created by the stringent commitments imposed by Elliott’s funding, I never lost my enthusiasm nor missed any ethical commitments to the Milan staff and fans.
“In response to this, Elliott's conduct has always proved to be careless and predatory: in short, the typical behaviour of a ‘vulture fund’, as it has often been described in the past by the international Press.
“I would like to mention, by the way of example, that at the moment Elliott appropriated my shares in AC Milan, I was offered the sum of €2 as compensation for my total investment!
“The above very clearly shows the real nature of Elliott which, orchestrating a default in advance, not justified by a violation of Milan’s covenants, did not allow me to carry out the club’s strategic development or conclude a satisfactory sale of the team to a prestigious buyer who, unlike Elliott, has a real interest and a strategic plan for long-term investment in AC Milan. Also, it did not allow me to keep my promise to Mr. Silvio Berlusconi to increase the value and standing of the team we both love.
“Finally, I would like to address all the Milan fans and all those who have considered me a ghost recently, telling them the following…
“During my time as President, I would like to remind all of you that I have never failed in my commitments and for this, I have proof of over €200m invested by me in the team under my ownership.
“I am ready to fight and I will do it to safeguard my rights and give assurances to the AC Milan shareholders, whom my beloved club deserve.
“Any deliberate and intentional manoeuvres to reduce the value of AC Milan will be prosecuted by law. Thank you for your hospitality and attention.”
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