AIBA, the global governing body for amateur boxing has announced that it has agreed to a deal with one of its creditors of which it owes $10,000,000 to in loans taken out by AIBA. AIBA and Azerbaijani firm Benkons confirmed a deal which effectively prevents probable bankruptcy fears lodged at the door of AIBA. The deal halts all legal actions taken by Benkons against AIBA to recoup the money owed, with plans to begin repayment in part to Benkons to commence in 2021.
AIBA and Benkons have been embroiled in legal battles over debts owed to Benkons, of which loans were agreed upon by the organisation under the watch of former disgraced AIBA president CK Wu. Wu was forced to resign from the organisation as president due to claims of miss-handling of funds, bankruptcy fears along with allegations of corruption in office and across boxing competitions of which it officiates including the Olympic games.
On January 28th, AIBA, recently appointed Kazhkstan’s Gafur Rahimov as new interim president of the organisation following Franco Falcinelli’s decision to stand down from the which he held since November following CK Wu’s resignation from office. Falcinelli does remain within the organisation as the AIBA’s executive vice president. However Rahimov’s appointment has gone down with a sour taste, who is currently under US sanctions due to links with organised crime within Kazakhstan and the former Soviet bloc of nations.
AIBA’s debts to various organisations are rumoured to be much higher than the debt currently owed to Benkons.
AIBA published a press release confirming the settlement with Benkons, which is published below:
AIBA’s newly named Interim President and Executive Vice President have announced that an out-of-court settlement has been reached to end a legal fight over a critical $10 million loan by one of the biggest creditors to WSB Americas Operation that had been guaranteed by the International Boxing Association (AIBA).
“The settlement that AIBA has reached with Benkons represents a significant step toward restoring the financial confidence and proper governance at AIBA because if the matter had been left open we could have faced bankruptcy,” said Gafur Rahimov, AIBA’s Interim President, and Franco Falcinelli, the Executive Vice President, in a joint statement.
The agreement calls for the reimbursement of part of the funds, beginning in 2021, while another portion of the amount will be converted into sponsorship.
“This will effectively reduce and delay AIBA’s overall cash payments at a time when we are cash-strapped,” said Rahimov, who led the effort to achieve the agreement well before he was named as the Interim President. “And it will put an end to the single biggest challenge that AIBA has been facing.”
Benkons, the company that extended the loan seven years ago, confirmed the settlement on Wednesday and said, “We had already initiated legal action against AIBA, but we agreed to the AIBA proposal as it is favourable for both parties.”
The boxing federation has been plagued by financial mismanagement and a lack of transparency, which led to the resignation in November of AIBA President CK Wu. Accounting irregularities at AIBA also raised concerns with the International Olympic Committee (IOC), which in December asked AIBA to submit a plan to address its governance and financial issues by January 31st.
“Clearly we are pleased to announce that this settlement has been reached,” said Falcinelli. “This news, of course, is included in our overall report to the IOC, which also provides a detailed update about the six issues they asked us to address: governance, management, financial, judging, refereeing and anti-doping.”
Rahimov was named Interim President at the AIBA Extraordinary Congress in Dubai on January 27th. “Our message to the IOC and to the world of boxing is that AIBA is turning over a new leaf and we intend to demonstrate our responsibility to all National Federations and our commitment to the sport we all love,” he said.