LONDON (BLOOMBERG) - A 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, including state-owned Everbright Securities Co., 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 MP & Silva in a 2016 deal valued at US$1 billion (S$1.35 billion), had sent letters to the former owners, alleging that the company's sports-rights contracts couldn't be easily renewed, according to people familiar with the matter.
The Chinese side is looking to recoup losses after MP & Silva was wound up in October, the people said, asking not to be identified because the deliberations are private.
Radrizanni is chairman of English football club Leeds United, near the top of the English Championship. Silva owns media group Sport Business as well as Florida football club Miami FC. Both declined to comment.
Representatives of Everbright Securities didn't 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 Italy's Serie A, one person said.
Radrizzani and Silva believe that the company collapsed because its new owners didn't grasp the complexities of the industry and failed to hang on to a sufficient number of experienced deal-makers, the people said.
The firm went through three chief executive officers since the acquisition, they said. The consortium also failed to participate in an emergency rights issue in the summer of last year, they said.
The acquisition 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 Bromwich Albion, Wolverhampton Wanderers and Southampton in England, Italy's AC Milan and Inter Milan, Spain's Atletico Madrid, and Slavia Prague in the Czech Republic.
Not all the investments were deemed successful, and some have been reversed, with the Atletico Madrid stake subsequently being sold, and Tony Xia giving up control of Aston Villa.