Amateur boxing’s governing body, AIBA, faces the risk of bankruptcy amidst a civil war within the organization. The president, Wu Ching-kuo is also under scrutiny after an official has accused organization of ‘mismanagement’.
One concern is a letter from the Azerbaijani company Benkons, demanding AIBA immediately repay a $10m (£8m) loan from 2011. That is over £2m more than AIBA has in its accounts, a source has stated to The Guardian.
In a letter to the AIBA acting-executive director, William Louis-Marie, dated 19 July and as reported by The Guardian, Benkons writes: “If we do not receive immediate and full repayment of the $10m from Aiba we will instruct our lawyers to take legal action against AIBA and its president for recovery in the Swiss courts.”
A senior AIBA figure told the British daily: “If Benkons are allowed to foreclose on that debt, we are no position to pay it. We will be bankrupt.”
To make matters worse, AIBA has also been served documents by the Chinese company First Contract International Trade in Hong Kong demanding it pay back an 18.99m Swiss francs (£14.65m) investment which it put into Aiba’s marketing arm, BMA.
As per the report, the FCIT chairman, Di Wu, accused AIBA of “mismanagement” and “greatly infringing on my rights” in another letter obtained by the Guardian. He also questions why Aiba signed a new agreement with another Chinese company AliSports. And why the BMA’s board of directors decided to wind up the BMA after it was several million pounds in debt.
“These actions have already seriously breached all business ethics and even the Swiss law,” Di Wu writes. “The reality turns out to be far away from what the president Wu committed.”
The revelation comes amid an increasingly bitter civil war inside AIBA, which has led to the resignations of its treasurer and finance director following claims they were sidelined by the president, Wu Ching-kuo. Earlier this month an executive committee member was also removed by Wu after raising questions about possible “deficiencies and irregularities” in Aiba’s finance and governance before being dramatically reinstated by Swiss courts earlier this week.
In May, AIBA’s treasurer, David Francis, resigned citing differences with the leadership. Shortly afterwards Aiba’s financial director, Rob Garea, also resigned, before suggesting he was not consulted on key contracts and was worried about accounting irregularities at Aiba.
Earlier this month Terry Smith, the AIBA Welsh executive committee member who had written to president Wu and other senior members of Aiba to demand answers to some of the concerns raised by Garea, was removed.
However, shortly afterwards Smith was removed from AIBA’s executive committee – with Wu claiming it was because he was no longer an honorary member of Welsh Boxing. Smith immediately took AIBA to a Swiss court and was able to overturn the decision.
All in all, it is believed that the federation does not have enough money on hand to repay either the loan or the investment. And the questions about Wu’s autocratic leadership are also emerging amidst all this.