LONDON • The Chinese group that owned MP & Silva is suing the founders of the collapsed European sports rights firm after losing hundreds of millions of dollars.
The consortium, which includes state-owned Everbright Securities, filed a claim in the High Court in London, alleging commercial fraud, according to a legal filing.
The document named MP & Silva founders, Andrea Radrizzani and Riccardo Silva, as defendants but provided no further information.
The Chinese investors, who bought control of the company in a 2016 deal valued at US$1 billion (S$1.35 billion), had sent letters to the former owners, alleging their sports rights contracts could not be easily renewed, according to people familiar with the matter.
They are looking to recoup losses after MP & Silva was wound up in October, the people said, asking not to be identified as the deliberations were private.
Radrizzani is the chairman of English Championship club Leeds, while Silva owns media group SportBusiness as well as Miami FC, who play in the second tier of American professional football.
Both, however, declined to comment while representatives of Everbright Securities did not immediately respond to questions about the lawsuit.
Some of the allegations concern the way that MP & Silva, under Chinese ownership, lost key contracts, such as the Italian Serie A, one person said.
The Italian duo believe that the company collapsed because its new owners did not grasp the complexities of the industry and failed to hang on to a sufficient number of experienced deal-makers, the people said.
The firm also went through three chief executive officers since the acquisition, while the consortium failed to participate in an emergency rights issue in the summer of last year.
The buyout of MP & Silva came at a time when Chinese investors were being encouraged by government authorities to invest in sports businesses, especially football related.
Chinese investors took over or acquired stakes in European football teams, including Aston Villa, West Brom, Wolves, Southampton, AC Milan, Inter Milan, Atletico Madrid and Slavia Prague.
Not all the investments were deemed successful, and some have been reversed, with the Atletico stake subsequently being sold, and billionaire Tony Xia giving up control of Aston Villa.