According to Italian daily Corriere della Sera, Milan owner Yonghong Li has declared himself bankrupt and his assets will now be auctioned off on Taobao – the Chinese version of Ebay.
Questions had been previously asked of Yonghong’s financial stability, with the New York Times and Italian financial paper Il Sole 24 Ore having already carried out investigations pointing to his lack of funds.
However, the latest reports suggest the situation has now culminated to the point where the owner has had to declare himself bankrupt.
Days prior, the China Securities Regulatory Commission also announced the start of an investigation into illicit practices from his holding company Shenzhen Jie Ande for hiding their bankruptcy for months.
Li bought the club from Silvio Berlusconi last year for €740m. However, the businessman was initially unable to stump up the required funds and consequently took out a high-interest loan from hedge fund Elliott Management. Now, the report claims he is unable to repay the loan and is also being sued two banks for unpaid debts.
Furthermore, the report claims that that Li was already insolvent by the time he took over full control of the club last April.
Packaging company Zhuhai Zhongfu, valued at €60m and of which his holding company owns 11.39 per cent, has been consequently ordered on sale via an auction by the tribunal in Futian to repay the Jiangsu and Canton banks.
The company was ordered to be sold in February last year – prior to the Milan takeover when Li was found to be insolvent – but was held up by the appeal process.