Company Formations International (CFI) is located on 22 Northumberland Road in Dublin 4, a short stroll from both the Grand Canal and the affluent village of Ballsbridge. Like the rest of the street, the building is Victorian in style; with a front garden converted into off-street parking and its red brick exterior extending to three stories. Its neighbours include a mix of small professional services firms, media agencies and rental accommodation – some plush, some bedsits.

CFI specialises in incorporating Irish registered companies, and, according to its marketing blurb, it provides this service “quickly, efficiently and with the minimum of fuss”. It is one of a number of firms that has carved out a lucrative, and entirely legitimate, niche aiding foreign companies to incorporate in Ireland. And, once registered, its secretarial division will ensure that the full suite of statutory forms, company registers and resolutions are prepared and lodged.

In February 2003, it incorporated a company called Media Partners & Silva on behalf of Italian businessmen Ricardo Silva and Andrea Radrizzani, best known as the owner of Leeds United Football Club.

Sean Kavanagh, a shareholder and director of CFI, sat on the board of the company (it was one of 227 companies he has been a director of or secretary to) and CFI’s sister company, Porema, acted as company secretary.

The Irish business was owned by a related company in Luxembourg and formed part of the wider MP & Silva Group, a sports rights agency that was busy hoovering up expensive television rights to sports across Europe and them flipping them onto to broadcasters, mostly in Asia, for a premium.

And for the first 15 years of its existence, MP & Silva’s Irish operation was a veritable cash cow, recording bumper profits and dispensing hefty dividends. In 2014, it paid a dividend of €45 million, adding to the €90 million it had coughed up for the previous 24 months. By 2016, it was funnelling €279 million through Ireland in revenues, booking a profit of €18.1 million in the process.

Ricardo Silva and Andrea Radrizzani: Founders of MP & Silva

Now, however, the Irish company is bust, and being wound up by a court-appointed liquidator. Its parent company, valued at €1 billion just three years ago, is bust too, a collapse that is regarded as one of the biggest disruptions to Europe’s sports industry in decades.

With creditors scrambling for cover and a myriad of international insolvency practitioners trying to unpick the collapse, the activities of the Irish company are now under intense scrutiny. 

It has now been referenced in litigation in Singapore, London, Monaco and China. An agency acting for Serie A, Italy’s top-flight league, even dispatched a battalion of lawyers to the Irish courts seeking to freeze assets in Dublin, while financiers in Monaco have been actively seeking to channel money from other group entities to the Irish subsidiary.

So, just how did it all happen? How did an obscure company in Dublin 4 become part of a global asset hunt? And what happens next? Confidential documents, court judgements, affidavits and international filings reveal the real story behind the collapse of MP & Silva, and the role of Ireland in its operations.

The Irish money trail

To really understand the collapse, you have to understand the business and the role of the Irish operation in the money chain.

MP & Silva spotted an opportunity in the market; one that involved buying up the rights to sports events in Europe and then selling them on to national broadcasters.

It paid vast sums for top-flight British, Italian and German soccer, Grand Slam tennis and Formula One racing. Crucially, it started buying just as the Asian love affair with European sports began.

It also made Silva and Radrizzani a fortune. Documents would later reveal much of the proceeds were routed through Dublin.

By 2016, it had caught the attention of Chinese suitors, and the two owners sold most of the business to China’s Everbright Securities and internet entertainment company Beijing Baofeng Technology for €1 billion. UBS advised MP & Silva on the transaction, a deal that ultimately sowed the seeds of destruction for the business.

The Irish company was central to the operation, advancing and receiving huge sums from around the world. An analysis of documents from seven jurisdictions reveals the extent of the money trail and the role of the Irish-registered company.

Documents for other years show a similar pattern, with the Irish vehicle acting as a facilitator for multi-million euro flows of fees, loan and licensing deals between its global outposts.

Take its relationship with MP & Silva PEE in Singapore. Both owned by the same Luxembourg parent, the Irish company paid €42.2 million to its Singaporean sister firm in 2016 for consultancy and agency agreements, on top of a €6 million payment in 2015. In return, it received a loan for US$7.7 million from the Singapore entity.

In the same year, it made payments of €3.7 million to a related company in Luxembourg and sold “licence fees” of €296,000 to a company registered in Hungary. It provided a loan to a group company in Dubai for US$7.3 million, as well as selling licensing fees worth millions of dollars in over the course of 2015 and 2016.

It also had massive dealings with a related company in Monaco, selling licence fees worth €15 million and picking up the bill for legal fees for the same company. It also provided a third-party guarantee for a London company on its gleaming modern office in London’s prestigious Mayfair district.

Documents for other years show a similar pattern, with the Irish vehicle acting as a facilitator for multi-million euro flows of fees, loan and licensing deals between its global outposts. All entirely legal, it was what the company was established to do, and part of Ireland’s sales pitch to international financiers.

But it also meant that the company would be under increased examination in the event of the collapse.

And that collapse was just 24 months away.

Serie A Scramble

Last year, on October 16, lawyers for Infront Partners went into the High Court in Dublin seeking a mareva injunction, preventing MP & Silva’s Irish operation from reducing its assets below €18.5 million. It was, in effect, an application for a freezing order, and was just one of a number of legal applications being made around the world.

Infront had the contract to collect money due to Serie A, the top tier of the Italian football league, around the world. MP & Silva had bought the rights to the league to sell internationally and owed the league some €18 million. However, it did not have the money to pay it back.

Under Chinese control, the business had lost its way, and was struggling to buy new rights and pay for existing deals.

Without its founders flexing their muscle and availing of their rolodexes, it was floundering.  The French Tennis Federation triggered the formal collapse, petitioning the courts in London over an unpaid debt. This, in turn, triggered similar petitions globally, with creditors seeking to secure any available funds. 

And that, in turn, led them to Dublin and to the Irish company that had facilitated the financing of the global operation.

Serie A, acting through Infront, was first in the door, seeking to freeze funds in an AIB bank account, and asking for an order to ensure it would receive priority treatment during the liquidation – it received a European Payment Orders (EPO) from a judge in Milan hours before arriving in Dublin.

At this time, Kavanagh of CFI resigned as a director – there is no suggestion whatsoever of any wrongdoing on his part or of his company in the MP & Silva case.

The courts gave a temporary order, with both AIB and the Irish firm notified not to reduce the assets of the business. 

Agents of Italian football were not the only ones to arrive in Ireland, however. By February, six other companies had notified the court they were owed more than €5 million and were also seeking EPO orders from international courts. A seventh creditor claimed to be owed €724,000. 

All were seeking access to the funds in Dublin, which at the time totalled around €4.3 million.

However, the court liquidators appointed to the London wing of MP & Silva had a different idea, and quickly applied to the courts to have the Irish subsidiary wound up with its assets ring-fenced as part of the liquidation process.

In effect, they were seeking to get the funds for the company and then divide the proceeds equally amount creditors. This was equitable to everyone, but would not have aided Infront, as their end payment would be massively reduced.

The fickle nature of the business was also central, with the group paying massive sum to secure Italian rights to the World Cup last year. Italy did not qualify and it cost the company an estimate €90 million.

Seeking court approval, PwC accountant Zeif Hussian, joint UK liquidator of MP & Silva, said the Irish subsidiary owed €62.6 million to creditors, and he was making his application in order to prevent a “scramble” for the €4.3 million in its Irish bank. He said the company was owed $37.5 million, and that there had been no management of the Irish operation since the global collapse.

His said the Dublin firm was insolvent and should be liquidated. His Irish affidavit also shed more light in the collapse, with Hussain citing losses on a number of onerous contracts, and debts and the “loss of material rights contracts with Serie A”.

The fickle nature of the business was also central, with the group paying massive sum to secure Italian rights to the World Cup last year. Italy did not qualify and it cost the company an estimate €90 million.

He sought the funds from Ireland to benefit the creditors overall and not one in particular. Hussain had some visibility on the company – he had been drafted in June to help the business before it went bust, but quickly realised it needed $100 million to survive. That was never going to happen. All that was left was to round up the assets, most of which lay in an AIB bank account in Dublin.

The High Court said it would make its ruling on May 15, 2019, a move that would decide who would get control of the millions nesting in Ireland. As Mr Justice Robert Haughton prepared his decision however, moves were going on in Monaco that could have scuppered the whole process by advancing tens of millions to Dublin.

Drama in Monaco

Two days before the judgement was due to be heard, world filtered back to Infront that a related company in Monaco had told the courts in the principality that it actually owed €57 million to the Irish company, a move that it claimed would “materially affect” the solvency of the Irish unit. It was, in effect, a land grab by a one of the remaining units in MP & Silva to get the Irish cash.

By attempting to prove its solvency with the money, it could stymie the liquidation process.  

At this point, three different parties were seeking control of the Irish money: the liquidators, Infront and the Monaco company. The move was notified to the Irish courts on May 13. 

The courts, however, remained nonplussed. Judge Haughton ruled that all of the companies were effectively insolvent and there was no evidence to suggest that the Monaco company could advance the sums required to prove solvency, given it had assets of €103 million and liabilities of €197 million.

With the dividend not forthcoming from Monaco, he placed the company into liquidation, ruling that the money go to the liquidator and not to the agents of Italian football.  

More recently, the agency’s Chinese owners have filed a claim in the High Court in London, alleging commercial fraud, according to a legal filing. The document names Silva and Radrizzani as defendants, but provided no other information.

Over in China, however, more actions were emerging. Headquartered in Futian District of Shenzhen in Guangdong, China Merchants Bank was the first commercial bank wholly owned by corporate legal entities in China.

It had also helped finance the 2016 Chinese buyout of MP & Silva, and now, three years later, was seeking the $506 million it claimed it was due. As part of the action against Everbright, it is seeking access to the Irish company’s records.

The MP & Silva bankruptcy has already resulted in several other lawsuits among the various partners in the deal. Everbright Securities has filed its own lawsuit against Baofeng Group in a Beijing court, demanding tens of millions in compensation.

Shanghai Huarui Bank has filed two pending cases against Everbright Securities, demanding a payment of €96 million to the principal, investment return, penalty, legal and arbitration costs, according to Everbright Securities’ annual report.

More recently, the agency’s Chinese owners have filed a claim in the High Court in London, alleging commercial fraud, according to a legal filing. The document names Silva and Radrizzani as defendants, but provided no other information.

Chinese investors have sent letters to MP & Silva’s former owners, claiming that the sports rights contracts they took on could not be easily renewed and also expressed concern at the way in which the agency lost significant contracts, such as Italian soccer’s Serie A. Again, the role of the Irish company will be examined.

Meanwhile, in Dublin, liquidators from KPMG will begin to examine the company and its operations as part of the winding up process.  The findings will relate to the Dublin operation, but the implications will travel much further – from Singapore to China, and from Monaco to Serie A.