Singapore-based Red Card Global exits deal with Lithuanian football club FK Riteriai

SINGAPORE – Less than three months after Singapore-based sports marketing and player development firm Red Card Global entered into an agreement to acquire FK Riteriai on Jan 20, the deal is now off the table, leaving the Lithuanian top-tier club on the verge of bankruptcy.

The club’s woes will also impact Singapore footballer Ryhan Stewart, who recently left Singapore Premier League side Albirex Niigata to join the Knights on a two-season contract and made his debut on April 5.

Responding to The Straits Times’ queries, Red Card Global said on April 7: “We are accountable to our co-investors, including institutional partners, and take that responsibility seriously. The decision to disengage was made with their best interests in mind, based on the facts uncovered.

“Additionally, we will be initiating legal action against the sellers for misrepresentation, breach of agreement and the unauthorised use of funds committed in good faith. We are working closely with legal counsel to ensure that our position is defended and that appropriate remedies are pursued.”

On April 4, Riteriai said on their website that they are experiencing financial difficulties and attributed the situation to “investors’ unfulfilled obligations”.

They claimed that according to their agreement with Red Card Global, which is represented by founder and former Singapore international R. Sasikumar, “the investors were obliged to transfer €150,000 (S$222,000) for the club’s current payments, but so far €50,000 has not been transferred”.

“In addition, the investors had provided a guarantee for another €350,000, but this obligation has also not been fulfilled,” added the club.

The Lithuanian side claimed that they are unable to pay players, coaches and staff, adding a demand that “the investors immediately transfer the remaining amount of €50,000 and provide guaranteed funds so that the club can continue its activities”.

A day after the club’s statement, a report on the Baltic Football News website gave a different version of what is happening behind the scenes. Citing sources, the report said that the money had been transferred to the club’s bank account but Riteriai did not pay the salaries or accommodation expenses of the players “since at least February”.

Red Card Global said in a statement that it had paid €150,000 to the club on Jan 21 “in support of the acquisition process”.

“However, no shares were ever legally transferred or registered in our name. Despite this, we have been inaccurately referred to as the club’s new owners in various communications and media reports,” it added.

“From the outset, the transaction was presented to us on the basis that we would be acquiring a debt-free club. However, based on both the due diligence process and the recent conduct of the sellers, we are no longer confident that this core condition of the legal agreement can or will be upheld.

“It was subsequently brought to our attention that some of our funds were used to settle pre-existing obligations that were outside the scope of our engagement. This occurred without our explicit approval under the agreed financial oversight process.”

Red Card added that the club’s February salaries were fully paid through its funding.

Riteriai’s former sports director Vytautas Masaitis told ST that “to my knowledge” the first payment of €150,000 was made by Red Card Global.

Noting that “the club’s situation was already difficult last year”, he said that he had roped in Sasikumar as an investor.

He added: “The audit revealed information about potentially significantly higher debts of the club than previously indicated. These circumstances, of which the investors were not fully informed, led to justified doubts about the accuracy of the information presented by the former owners and resulted in the suspension of the entire process in order to seek clarity.”

In an interview with Lithuania’s TV3, Lithuanian Football Federation president Edgaras Stankevicius said: “There is some truth on both sides. I am now modelling various options on how to help Riteriai, but the financial situation is not good, and the obligations that were guaranteed... one part has been transferred, but it is not enough, it has already been spent.”

For Stewart, the future remains uncertain.

The 25-year-old, who plays as a right-back or winger and has 25 caps for the Lions, was on the bench for their 2-1 loss at FC Hegelmann on March 29, before making his debut on April 5. He came off the bench to replace Andrius Kaulinis in the 65th minute and helped spark a 3-1 comeback win against FK Panevezys.

It was Riteriai’s first win of the season and the result lifted them to seventh in the 10-team league with five points from five games, seven behind leaders Hegelmann.

When contacted, Stewart said he was happy to make his European football debut but needed to have a clearer picture of the club’s situation before making further comments.