Spanish Soccer Team Hit by Crisis, Confusion Amid Dispute Over Ownership

Racing Santander, a soccer team in Spain’s top division, is entangled in an ownership dispute that’s left its Indian owner saying he was unaware of the hiring of a new manager and its players waiting for some of last year’s pay.

Ahsan Ali Syed, who controls Bahrain-based financial- services company Western Gulf Advisory, bought Racing in January from Jacobo Montalvo, who has interests in construction and real estate. The former owner is trying to get the sale canceled, saying Ali Syed defaulted on payments tied to the 15 million- euro ($21.2 million) purchase.

With about five weeks to go before the new season, Ali Syed says he won’t spend more on the team because of the uncertainty, and said he isn’t being told of the team’s operations. He said he was told coach Marcelino García planned to quit a day before he left and had no idea the team hired former Inter Milan and Valencia manager Hector Cuper until he read media reports.

“I cannot run the team like this, nobody can,” Bahrain- based Ali Syed said in an interview. “I cannot keep on investing in the club as long as my ownership is in dispute. Today they don’t even allow me to have a say in the club.”

In a June 13 letter sent to the Indian, Montalvo said he was terminating the deal and transferring all shares in the club back to his Dumviro Ventures S.L. holding company because of missed payments. Ali Syed said he’s missed the payments because his ownership is being disputed.

Blackburn Rovers

Last year, Ali Syed said he was prepared to invest 300 million pounds ($483 million) in former English Premier League champion Blackburn Rovers. He never bought the club and moved on to Racing.

The Spanish team was put up for sale after the former owners couldn’t pay debt owed to players and the local government.

“He first arrived on a private jet, with five white Mercedes, five bodyguards, three translators, five or six friends and a financial director,” Montalvo said. “The number of people accompanying him diminished with each visit until it was just him, and now not even he comes anymore.”

Last week Francisco Pernia, Racing’s president, put the team into bankruptcy protection. The move helps it to avoid being demoted to the second-tier because of unpaid wages of about 1.5 million euros it owes its players.

Under Scrutiny

Buying into the world’s most popular sport has led to scrutiny of Ali Syed’s affairs. He denied claims of financial impropriety made against him by individuals and media in the U.K., Australia and other parts of Europe. The British Broadcasting Corp. said Ali Syed left unpaid debts in the U.K. and Australia’s Sydney Morning Herald has accused him of “duping” clients. Ali Syed said he’s the victim of “one gentleman who was not happy with us.”

He says his business has more than $1 billion in assets, most of it generated by his family operations in money-lending and agriculture in Hyderabad, India. Ali Syed acknowledged his family is not well-known despite in India its wealth.

“We are a population of 1.2 billion people and there are so many millionaires, so many landlords, so many agriculturalists, so many industrialists,” Ali Syed said. “It does not mean everybody knows each other. I’m definitely not like the Ambanis or the Tatas, who are the paramount families in India. But that doesn’t mean there are no other Indians who are reasonably affluent.”

Botin a Fan

Racing is based in the northern Spanish city of Santander, which has a population of 180,000, and counts Banco Santander SA Chairman Emilio Botin among its fans. The team finished sixth in the 20-team La Liga as recently as 2008 and came 12th last season, which ended in May. Ali Syed said he remains determined to lead the club into the new season.

“I’ve no interest in selling this club to anyone,” he said. “I want to make this club a seriously recognized team in the world of football.”

To contact the reporters on this story: Tariq Panja in London at tpanja@bloomberg.net; Alex Duff in Madrid at aduff4@bloomberg.net.

To contact the editor responsible for this story: Christopher Elser at at celser@bloomberg.net

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