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Subsidiary pulls Nike Europe into a fraud probe
France - 17 May, 2006
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A fraud probe involving the French club Paris Saint-Germain has led that country’s authorities to start legal action against the Nike European affiliate.
The US-based sportswear manufacturer sponsors Paris Saint-Germain.
Nike Europe was placed under investigation – one step shy of formal charges - for alleged fraud and the use of fraud and complicity in hiding employment at the Paris club. Officials spoke under the condition of anonymity due to an ongoing case.
The case centred on player transfers from 1998 to 2003. But investigators uncovered a plot involving bogus royalty payments to players, allowing the club to avoid charges paid by companies for health and welfare services for workers in France.
Investigators suspect Nike may have paid royalty bonuses to certain players for special contracts to promote the company, allowing the club to dodge payments.
“(Nike Europe) contests these allegations, and will continue to cooperate with the French judicial authorities,” said Massimo Giunco, a spokesperson for the European division, told The Associated Press.
Three former officials of subsidiary Nike France were placed under investigation in the case last fall. The French division, which has been an official Paris Saint-Germain sponsor since 1989, was placed under investigation in January.
The US-based sportswear manufacturer sponsors Paris Saint-Germain.
Nike Europe was placed under investigation – one step shy of formal charges - for alleged fraud and the use of fraud and complicity in hiding employment at the Paris club. Officials spoke under the condition of anonymity due to an ongoing case.
The case centred on player transfers from 1998 to 2003. But investigators uncovered a plot involving bogus royalty payments to players, allowing the club to avoid charges paid by companies for health and welfare services for workers in France.
Investigators suspect Nike may have paid royalty bonuses to certain players for special contracts to promote the company, allowing the club to dodge payments.
“(Nike Europe) contests these allegations, and will continue to cooperate with the French judicial authorities,” said Massimo Giunco, a spokesperson for the European division, told The Associated Press.
Three former officials of subsidiary Nike France were placed under investigation in the case last fall. The French division, which has been an official Paris Saint-Germain sponsor since 1989, was placed under investigation in January.
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