Lausanne: Manchester City was "strongly condemned" by a Court of Arbitration for Sport panel for obstructing the investigation into its finances that led to the club being fined ¬10 million ($12 million).
The full 93-page document published by CAS provides fuller detail on the verdict delivered two weeks ago that overturned City's two-year ban from European competitions when findings of financial wrongdoing by UEFA were either rejected or found to have happened too long ago to be investigated.
CAS did not back up UEFA's verdict that City disguised the source of at least ¬204 million of income as sponsorships from companies linked to its Abu Dhabi ownership in order to comply with Financial Fair Play rules to enter the Champions League and Europa League. But the court imposed one of the biggest fines in football history, albeit reduced by two thirds from UEFA's original penalty.
The case was sparked by City's internal correspondence that the club said was illegally obtained by a Portuguese man, Rui Pinto, before being published by German magazine Der Spiegel and published in 2018. CAS said the leaked emails were "admissible evidence."
City's "blatant disregard" for cooperating with the investigation should be "strongly condemned," CAS found, expressing hope the large fine would be a "sufficiently strong deterrent" to other clubs.
"The majority of the panel finds that MCFC's failure to cooperate with the CFCB's investigation is a severe breach and that MCFC is to be seriously reproached for obstructing the CFCB's investigations," CAS said referencing UEFA's Club Financial Control Body.
CAS stressed that UEFA did not instigate "frivolous charges" and had a "legitimate basis to prosecute" City based on leaked emails appearing to show the Abu Dhabi-owned club deceived the governing body by overstating sponsorship deals from 2012-16 and hid the source of revenue linked to state-backed companies in the emirate.
But CAS said UEFA's claim that City's funding was "channelled through unidentified third parties is based on innuendo and does not meet the requisite standard of proof."
City was cleared over its sponsorship contributions from the the airline Etihad, with CAS saying it was "not comfortably satisfied" the the club used the sponsorship to hide the true source of funding.
But CAS found alleged breaches relating to Abu Dhabi communications firm Etisalat fell outside their statute of limitations to be investigated because the payments were received in June 2012 and January 2013.
"The evidence clearly demonstrates that Etisalat and Etihad met their sponsorship obligations in full in return for valuable rights and that the sponsorship payments were not funded" by City's parent company, Abu Dhabi United Group, CAS said.
City was bought in 2008 by Sheikh Mansour bin Zayed Al Nahyan, a deputy prime minister of the United Arab Emirates and a member of Abu Dhabi's royal family. His wealth transformed City into Premier League champions, with four titles won over the last decade.
In a letter provided by City to CAS, Sheikh Mansour said he had "authorized or arranged" payments to Etihad or Etisalat linked to their sponsorship of the club.
But City was criticized for making new witnesses available and presenting evidence to the CAS panel that was not given to UEFA's investigators.
"Allowing clubs to hold onto relevant evidence until the proceedings before CAS would seriously risk turning the proceedings before the CFCB (Club Financial Control Body) into a farce and would render the entire CFCB process very inefficient," CAS said. "This cannot be tolerated or endorsed."
But the fresh evidence convinced the panel to allow City back into the Champions League, with CAS saying UEFA might have reached the same conclusion if they had the same information.
But the heavy fine for obstruction meant City was not completely exonerated after the most damaging period to its reputation in the 12-year ownership under Sheikh Mansour.
"The decision shows how it is possible to tie a governing body up in the knots of its own procedural rules," said sports lawyer Peter Nunn of London-based Mishcon de Reya. "There will always be loopholes in those rules which a well-resourced legal team can exploit.
"Manchester City arguably adopted an attritional approach to the original UEFA investigation " refusing to fully comply with numerous UEFA requests for information and not making witnesses available until this got to the Court of Arbitration for Sport. That approach resulted in a ¬10m fine for failing to cooperate with UEFA's investigation, but may well have helped it avoid more serious censure."
UEFA decided to create the FFP system 11 years ago to stabilize the football economy by monitoring finances of 200-plus clubs that qualify each year for its competitions. Clubs must approach break-even on commercial income and spending on transfers and salaries. Sponsor deals linked to wealthy owners must be set at fair market rates.
"Going forwards," Nunn said, "football's rule makers will undoubtedly seek to close ... loopholes in order to try to reassert their credibility and authority over participating clubs, which has been damaged by the whole affair."