AIBA announces $10m loan settlement to restore confidence

Gafur Rahimov - AIBA's Interim President - InsideSport

The world governing body for boxing, AIBA’s newly named Interim President Gafur Rahimov and Executive Vice President Franco Falcinelli have announced that an out-of-court settlement has been reached to end a legal fight over a critical $10 million loan by one of the biggest creditors to WSB Americas Operation that had been guaranteed by the International Boxing Association (AIBA).

“The settlement that AIBA has reached with Benkons represents a significant step toward restoring the financial confidence and proper governance at AIBA because if the matter had been left open we could have faced bankruptcy,” Rahimov and Falcinelli have stated in a joint statement.

The agreement calls for the reimbursement of part of the funds, beginning in 2021, while another portion of the amount will be converted into sponsorship. “This will effectively reduce and delay AIBA’s overall cash payments at a time when we are cash-strapped. It will put an end to the single biggest challenge that AIBA has been facing,” Rahimov added further.

Benkons, the company that extended the loan seven years ago, confirmed the settlement on Wednesday and said, “We had already initiated legal action against AIBA, but we agreed to the AIBA proposal as it is favourable for both parties.”

The boxing federation has been plagued by financial mismanagement and a lack of transparency, which led to the resignation in November of then AIBA President CK Wu. Accounting irregularities at AIBA also raised concerns with the International Olympic Committee (IOC), which in December asked AIBA to submit a plan to address its governance and financial issues by January 31st.

“Clearly we are pleased to announce that this settlement has been reached,” said Falcinelli. “This news, of course, is included in our overall report to the IOC, which also provides a detailed update about the six issues they asked us to address: governance, management, financial, judging, refereeing and anti-doping.”

Rahimov was named Interim President at the AIBA Extraordinary Congress in Dubai on January 27. “Our message to the IOC and to the world of boxing is that AIBA is turning over a new leaf and we intend to demonstrate our responsibility to all national federations and our commitment to the sport we all love,” he said.

The IOC had earlier expressed its fear and apprehensions about the future of the AIBA following the decision to appoint Rakhimov, who has been linked to organised crime, as Interim President. The Uzbekistan-born boxing administrator was chosen to replace Falcinelli at the AIBA Extraordinary Congress in Dubai 27 January, after the Italian boxing official had decided to step down. Rahimov has originally replaced C K Wu, who was forced out of AIBA after 11 years following allegations of financial mis-management.

Rakhimov has repeatedly been named as an Uzbek mafia boss in the media with strong links to organised crime, although he has never been prosecuted for anything. He was among 10 individuals announced by US Treasury, they intend to impose sanctions on because they were allegedly associated with the alleged Eurasian criminal entity, the Thieves-in-Law.

The US Treasury claims that Rakhimov has provided “material support” to the Thieves-in-Law, a group born in the Soviet Union’s prisons and which now allegedly operate in an underworld network that has spread beyond Russia to the world’s great financial centers. It is also claimed that Rakhimov runs the group of law enforcement issues, arranges meetings and addresses other problems.
“Rakhimov has been described as having moved from extortion and car theft to becoming one of Uzbekistan’s leading criminals and an important person involved in the heroin trade,” the US Treasury report claimed.

The US Treasury sanctions prohibit any persons from conducting financial or other transactions with these individuals and entities and freezes any assets they may have under American jurisdiction.

The IOC had already ordered AIBA to produce a report by the end of this month to brief them on the situation. IOC also went ahead to withhold any future financial contributions to AIBA, until the required actions have been fully addressed by the federation.