Juventus admit risk of exclusion from national and international competitions

Juventus have issued two statements concerning the investigation, one on the potential financial implications amid the club’s plans for a capital increase, and another on the sporting aspects.

The Bianconeri are under investigation for false accounting, which could clearly have serious consequences on and off the pitch.

Their president Andrea Agnelli is among those investigated and the same is true of Pavel Nedved and former club director Fabio Paratici, now at Tottenham Hotspur.

Last week, Guardia di Finanza, the Italian Financial Police, arrived at Continassa, confiscating documents regarding transfers worth over €50m between 2019 and 2020.

The Turin Public Prosecutor’s Office opened a dossier after CONSOB and COVISOC investigations into the capital gains cases in Serie A.

Juventus confirmed that, on November 24, the FIGC Prosecutor asked the club to pass on their financial documents and the the ‘accounting documentation concerning rights to the sports services of certain footballers.’

The Serie A giants also confirmed that Cristiano Ronaldo’s transfer from Juventus to Manchester United is under scrutiny.

Negotiations are ongoing, but Juventus explained all the possible scenarios in two different statements published on the club’s official website.

“The Company believes that the search and seizure order and the news of the existence of an investigation by the Public Prosecutor’s Office of the Court of Turin do not constitute, as of the date of this Supplement, a material adverse change whose occurrence would trigger the withdrawal rights of the Managers under the Underwriting Agreement in light of the initial stage of the investigations concerning the alleged offences, which are still being investigated by the competent authorities,” a statement read.

“However, as of the date of this Supplement, there is a risk that the Managers may deem the events described above (i.e., the search and seizure order and the investigation by the Public Prosecutor’s Office of the Court of Turin) to meet the conditions for the exercise of their withdrawal rights under the Underwriting Agreement.”

This means there is a risk to see some Juventus shareholders withdraw from the capital increase, a mere cash injection, which, in the worst case scenario, would worth €255m and not €400m.

“If no New Shares other than those covered by the EXOR Underwriting are subscribed following the Right Auction and the Managers were to exercise their withdrawing rights under the Underwriting Agreement, taking into account that the capital increase carried out in connection with the Offering is divisible and the EXOR Undertaking, the Company’s share capital would be increased by Euro 255 million only (of which Euro 75 million already paid by EXOR on account of a future capital increase on August 27, 2021) compared to the maximum amount of the Offering equal to Euro 400 million,” Juventus continue.

“If the Offering were to be only partially carried out, limited financial resources would flow to us. In such event, absent further actions promptly taken by the Company to support the implementation of the Updated and Confirmed Development Plan [Ed. i.e., the Company’s development plan for the 2019/20 – 2023/24 fiscal years], we may not be able to continue our business as a going concern.”

In a separate statement, Juventus highlight the possible consequences if the club and their representative are found guilty.

“If the outcome of the investigation is to be prosecuted and the ensuing proceedings are to result in a final conviction, there may be significant negative impacts on reputation and economic situation, Capital and financial position of the group.

“Regarding the allegation of false social communications provided for by art. 2622 cod. civ. disputed to the Issuer, the administrative pecuniary sanction from 400 to 600 units, with a unit value of between a minimum of €258 and a maximum of €1,549 for a total amount between €0.1m and € 0.9m.”

Regarding the sporting consequences, Juventus admit that in case a negative outcome of investigations, the club ‘can’t exclude the occurrence of even significant negative impacts on the reputation and financial position of the Issuer and the Group adding that ‘The system of national and UEFA licences provides for compliance with certain economic and financial parameters, as well as certain infrastructure and organisational requirements, the serious violation of which may result in the removal of Juventus from national and international competitions.’

This doesn’t mean that Juventus will automatically be excluded from competitions if found guilty, but it’s the worse case scenario that the club had to highlight also because they are listed in the stock exchange.

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