June 6 (Bloomberg) -- The first Indian investor in Spanish soccer is losing his luster among fans of Racing Santander.
Ahsan Ali Syed, who owns Bahrain-based financial-services company Western Gulf Advisory, missed a payment that was part of the sale agreement to acquire the top-tier team, according to the regional Spanish government of Cantabria. Players are protesting about 1.7 million euros ($2.5 million) of unpaid wages and the coach quit last week. Ali Syed said in an interview that he halted some payments until the previous owner resolves a family dispute that could trigger a legal challenge to his purchase.
Ali Syed follows previous investors in Racing who have seen a chance to boost their profile and network at matches against bigger clubs like Real Madrid and Barcelona, according to Ana Carrera, a former team executive who is an economics professor at the University of Cantabria. The 38-year-old Indian arrived on a private jet, checked into the swankiest hotel and hired a fleet of Mercedes for his entourage, Fernando Ortiz, president of Racing fan group Pena Zalo, said.
“He seemed to be the real thing: a big fish,” said Ortiz, who shook hands with Ali Syed and chatted with him through a translator when he arrived. “Now we are worried things aren’t what they seemed.”
Racing is based in the northern 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 May 22. Ali Syed, who ended negotiations to buy Blackburn Rovers last year, says buying Racing “suited his pocket” better than the English Premier League team. He says he sees an opportunity in a growing popularity in soccer in India and the Middle East.
As part of the deal to buy Racing from Jacobo Montalvo, Ali Syed agreed to pay 6.7 million euros the team owed to the regional government, said an official said, who declined to be identified in line with government policy. The government of Cantabria activated a bank guarantee after Ali Syed missed an installment last month, the official said. Ali Syed said there was “no default” because the government received his payment via an escrow account.
Santander’s Mayor Inigo de la Serna said it appeared the regional government had been “politically negligent” by not checking Ali Syed’s finances before the sale, according to an April 28 statement from his office. The regional administration says its contract with Ali Syed allows it to cancel his acquisition of Racing if he fails to meet further installments, the government official said. Ali Syed said he intends to meet all his obligations.
“There is no need to be in a panic situation in all,” Ali Syed said in a telephone interview. “In any fresh takeover there can be issues and there are minor tweaking issues we are trying our level best to resolve.”
Ali Syed said he has paid about 2.5 million euros to the government and 1.4 million euros of the club’s tax debt. He said he hasn’t paid the wages owed to players dating back to last year because he’s waiting for Montalvo to resolve what he called a family dispute that was “hidden” from him until the night before his acquisition.
Racing Santander officials couldn’t provide contact details for Montalvo and an e-mail sent to his father Javier’s secretary wasn’t returned.
Coach Marcelino Garcia blamed Ali Syed’s delays when he quit on June 3.
Ali Syed “deceived us and took us for a ride,” Garcia said in a televised press conference. “Because of a guy from India, the club has come to a standstill.”
Ali Syed’s delay in payments has given some fans doubts.
“We thought a gentleman was coming with a lot of money, but now there’s nothing,” said Pedro Cava, president of the Aupa Racing fan club.
Ali Syed said supporters’s expectations were too high.
“I have never promised to invest exorbitant amounts in the club: don’t expect me to invest heavily or aggressively because I cannot,” Ali Syed said. “I cannot build Rome in one day.”
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