On the 3rd of June, 2013, FC Barcelona signed Neymar from Santos FC in a transfer deal that has been mired in legal controversies ever since, with allegations of fraud, corruption and tax evasion having been made against both the player and the club.

These legal charges spring principally from the circumstances under which the player was signed from the Brazilian outfit. At the heart of this controversy lies the transfer figure itself—€57m, as quoted by the club initially—which quickly escalated to €86.2m upon closer inspection and subsequent declarations made by the club.

Why did FC Barcelona therefore, seek to conceal this crucial piece of information?

Both Neymar and FC Barcelona never made an attempt to conceal the fact that other, more lucrative offers had been made for the Brazilian which were duly rejected in favour of the Catalan club.

Barcelona seemed to celebrate the fact that they had been able to sign a prospect like Neymar for a transfer fee that was then considered to be an excellent bargain in Europe. In fact, at €57m, the transfer fee was projected by the club as an indication of the lure of their brand.

Juventus FC vs FC Barcelona

Money is OK but happiness takes priority

Speaking shortly after signing a 5 year contract with Barcelona, the Brazilian was quoted by BBC as saying: “Money is OK but happiness takes priority. We decided to come to Barcelona. I had a lot of offers but I followed my heart.

An official club statement following the player’s arrival too highlighted the fact that Barcelona’s offer was indeed not the highest amongst other offers put forth by rival suitors. Both Neymar and the club stressed on the fact that money was not a motivation for the player. “Money is OK but happiness takes priority”, seemed to be the message from both the parties.

However, subsequent investigation revealed that Barcelona had misrepresented the actual costs incurred by the club while signing Neymar from Santos.

Curiously, in May 2013, rivals Real Madrid revealed that they only dropped out of the race to sign the Brazilian as the deal would have cost the club €150 million. Perez reportedly told Cadena Ser (via Goal.com) that Madrid had the opportunity to sign the Brazilian in 2010 and that the club had now withdrawn from negotiations as there were ‘lots of conditions now’.

This statement was released a month before Barcelona actually completed Neymar’s transfer in June 2013.

Therefore, reports and rumours suggesting irregularities pertaining to the player’s transfer were already doing the rounds much before Barcelona were formally accused of concealing information with regards to the transfer.

These charges were initially brought forth by Jordi Cases, a Barcelona club member who alleged that club president Sandro Rosell had misappropriated funds amounting to €40m related to Neymar’s transfer.

While Cases later dropped the charges against the club, his initial allegations opened the lid on what was considered to be an open secret in the press—that Barcelona had paid more than €57m to bring Neymar to the club. Further investigations supposedly approximate the actual transfer fee to be in the region of €83.3m.

NEYMAR'S TRANSFER FRAUD TRIAL

The player recently appeared in court with regards to the allegations brought forward by DIS.

So what started off as an internal feud between the Barcelona club members, soon spiraled into a succession of legal charges that continue to haunt the club and player alike. Neymar and Barcelona find themselves embroiled in three different legal cases, all of which have direct links to the circumstances under which he completed his transfer from Santos FC in 2013.

In order to completely understand the technicalities of the situation, we must first look at the transfer deal that brought Neymar to Barcelona three years back.

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3rd June, 2013: Neymar signs for Barcelona

Barcelona completed Neymar’s much-anticipated move in a deal that was then valued by the club at €57m. A statement released by the official club website admitted that this total sum of €57m would be distributed amongst three companies (DISC, TEISA, N&N), along with Santos FC. The individual amount received by the four shareholders were held confidential.

The report also revealed that Barcelona were initially only willing to pay €40m for the Brazilian and that they were forced to increase the offer to €57m ‘due to interference from other clubs’. While the initial agreement was to sign the player after the 2014 World Cup, Barcelona decided to move his transfer forward by one year which contributed to the increased costs.

Josep Maria Bartomeu went on to reveal that Neymar’s release clause was set at €190m, a price that was met by Manchester United last summer according to the player’s father.

21st June, 2013: Was Neymar’s dad paid €40 million?- Marca

Marca carried a report that claimed that Santos only received €17m out of the total €57m that was spent by Barcelona on signing Neymar. The report further claimed that the €17m received by the club was to be shared with two other companies– DIS (€7m) and Teisa (€1m)—leaving Santos FC with just €9m.

Since there were only four shareholders, as specified in the aforementioned club statement, the report concluded that the unaccounted €40m was paid to the third company—N&N—the chief benefactor of which remained the player’s father.

9th December, 2013: Rosell accused of embezzling €40 million in signing of Neymar- Marca

On the 9th of December, 2014, Marca reported that Barcelona president Sandro Rosell had been accused of ‘misappropriation of funds’ amounting to €40 million. The case was brought forward by Jordi Cases who contested the figures quoted by Barcelona with regards to the total expenditure incurred by the Catalan club while signing Neymar from Santos FC.

14 January, 2014: FC Barcelona demand legal action over Neymar signing be dismissed- Club Statement

Audiencia Nacional judge Pablo Ruz reportedly (ESPN) began investigating the case as Barcelona demanded that the legal action be immediately suspended. A club statement questioned the need to investigate the case as it argued that the alleged embezzlement of €40 million, as accused by Jordi Cases, was already included in the total fee (€57.1m).

20th January, 2014: Barca ‘may have paid €95m for Neymar’- El Mundo (via ESPN)

Citing El Mundo as the primary source, an ESPN report claimed that Barcelona might have paid a total figure of €95m in order to sign Neymar in 2013. El Mundo is believed to have understood from leaked court documents that ‘three different payments of millions of euros’ were made to Neymar and his family between 2011 and 2013.

El Mundo reported that the full breakdown of the 95 million euros includes 40 million euros to the Neymar family, 17 million to Santos, 7.9 million for rights to three further young Santos players, nine million euros for two friendly games between the clubs, 8.5 million euros in commission to Neymar senior, 2.6 million euros in other agents’ fees and a signing-on bonus of 10 million euros.

22nd January, 2014: Judge agrees to formally investigate the matter

Just two days after El Mundo’s report was published, ESPN reported that investigating judge Pablo Ruz had declared that there was sufficient claim in the charges to merit a complete investigation by the court.

23rd January, 2014: Sandro Rosell resigns as president of Barcelona with immediate effect- Guardian

Following the court’s decision to formally investigate the club, Sandro Rosell immediately resigned from the president’s post while naming Josep Maria Bartomeu as his successor.

An official club statement read: In recent days an unfair and reckless accusation of misappropriation has resulted in a lawsuit against me in the Audiencia Nacional. From the beginning I have said that the signing of Neymar Junior has been correct and his signing has caused despair and envy in some of our adversaries. 

24th January, 2014: Detailed figures of Neymar transfer revealed by the club

Shortly after Rosell’s resignation, Barcelona president Bartomeu revealed the ‘detailed figures’ of the transfer saga in order to absolve the club of any wrong doings. In what can be read as an admittance of guilt, the club revealed that it incurred a total expenditure of €86.2m while signing Neymar which was previously concealed by the club. Categorized under several different, and rather suspicious subheadings, this difference of 29.1m was labelled as operational costs by the club. However, the club still maintained that the ‘global cost’ of the transfer remained €57.1m, including provisions for a €2m bonus should Neymar finish in the ‘top three of the Ballon D’Or’.

The club also provided a detailed breakdown of the player’s salary following his arrival from Santos FC.

The total salary cost to the Club is 56.7 million Euros (gross), which is divided into three concepts: 2.7 million Euros as agent commission (5%, rather than the 10 or 15% paid by other clubs), a 10 million Euro signing on fee and a guaranteed salary of 44 million Euros.

Here is the complete breakdown of the transfer deal.

Barcelona official statement Neymar transfer detailed feesTotal transfer fee: 57.1 m (€40m compensation paid to N&N and €17m to Santos FC.)

Salary: €44m (€8.8m x 5)

Signing Bonus: €10m.

Agent commission: €2.7m

Amount paid to Neymar’s father for scouting purposes: €2m

An agreement with Santos FC over three future players: €7.9m

Neymar’s charity: €2.5m

Marketing: €4m

Total: €130.2m (€86.2m, without the guaranteed salary)

Did Neymar come into an agreement with Barcelona before 2013?

Sid Lowe, in an article published by The Guardian in January 2015, revealed that Barcelona paid an advance of €10m to N&N which appeared in the club’s accounts in 2012 even though the transfer actually took place in 2013. This goes to suggest that Neymar entered into a prior agreement with the Catalan club much before his actual transfer from Santos FC was completed, for which he received an advance payment of €10m.

Moreover, the €40m received by N&N was termed as a ‘penalty clause’ which would come into effect in the event of the agreement being breached by either shareholder.

Sid Lowe claims: The public prosecutor’s report concluded that there are grounds to suspect that the contract signed between the club and the player may be “simulated”‚ with the details and descriptions of payments failing to accurately reflect what they were.

Here, the definition “penalty clause” comes under scrutiny. The public prosecutor insisted that the cash amount received by Santos remained “unclear”. 

DIS- Neymar broke the contract

In June 2015, Spanish authorities accepted a complaint brought forth by DIS, a company which previously owned 40% of the player’s rights at Santos FC. The company alleged that it was deprived of its economic entitlements following Neymar’s sale in 2013. This was the first instance in which the player himself was officially named in a legal complaint following the controversies surrounding his transfer.

Daily Mail reported that the court sought details from clubs like Chelsea, Manchester City, Bayern Munich and Real Madrid for any offer that was made to the player between 2009 and 2013.

FC Barcelona training

Did Neymar come into an agreement with Barcelona before 2013?

DIS went on to claim that Neymar signed a deal with Barcelona despite being under contract at the company. Terming this agreement as an alleged ‘robbery’, owner Delcir Sonda said that he was ‘morally and economically betrayed’ by the player’s actions. The company further alleged that the presence of a pre-contract agreement between Barcelona and Neymar inhibited other European clubs from making an offer for the player which in turn had a significant effect on his final transfer fee.

On the 5th of June, 2015, Epoca [via Mirror] reported that Neymar was being investigated on charges on tax evasion in Brazil. The report claimed:

N&N was founded in October 2011 and received a payment – apparently a loan – of US$44.8m from Barcelona two months later, six days before the Blaugrana beat Neymar’s Santos side at the Club World Cup.

Barcelona then paid US$25.4m to N&N in October 2013 and US$5.4m in February 2014 – a transaction that prompted the Receita Federal to investigate.

Thus, according to this report, Neymar had already signed an agreement with Barcelona in 2011 for which it received a ‘loan’ of US$44.8m.

Tax Fraud-Barcelona  

On the 20th of February, 2014, BBC reported that FC Barcelona had been officially ‘accused of tax fraud’ while signing Neymar from Santos FC the previous year. The club went on pay €13.5m shortly after being charged by the Spanish authorities while simultaneously absolving itself of any wrongdoing.

On the 13th of March, ESPN reported that the court had accused ‘Barcelona president Josep Bartomeu and his predecessor Sandro Rosell for tax fraud and fraudulent administration’.

The court statement read:

“These seven contracts were designed with different ends, but taken together they were used to cover up or hide the higher cost of the player’s transfer for FCB.

“All of them also had the goal of eluding or lowering payments to the Tax Office in a surreptitious manner.”

Tax Fraud- Neymar

Neymar was subsequently accused by Brazilian authorities of tax evasion amounting to £10.5m between 2011 and 2013. As reported by the Guardian in September last year, the presiding judge claimed that the Brazil international concealed certain ‘sources of income’ with FC Barcelona being suspected as the alleged source of the ‘unreported’ income.

The judge accused the 23-year-old of “omitting sources of income from abroad”. Barcelona Football Club was cited as the source of unreported money.

The frozen assets were in the name of the Brazil player and three companies in which he and his father are the principal owners. Neymar’s total assets were given as 244.2m reals.

The player recently appeared in court with regards to the allegations brought forward by DIS. All three cases remain under investigation.

 

 

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