By Payam Younesipour
April 30, 2020
In the autumn of 2019, just a few months before Mehdi Taj resigned from the presidency of Iran’s Football Federation, a private company was registered under the name Football Federation Financial Group (FFFG).
According to the news outlet Tabnak, the “parallel” legal entity lay outside the Federation’s organization and its director-partners were individuals from both inside and outside the Federation. No further details were reported.
The so-called Football Federation Financial Group was registered on October 9, 2019. Its registered office address is at 10 Aftab Street, Mahtab Avenue in Tehran’s Ararat neighborhood. Directors of Iranian football clubs sometimes met privately at this address in the early to mid-2000s.
On the company’s certificate of incorporation, its first directors – those who held office from the day the company was established – are named as follows: Sadegh Doroodgar, head of the real Football Federation’s Financial Department, Mahmoud Eslamian, a member of the Federation’s board of directors and senior advisor to the former president and – significantly – Esmail Khalilzadeh, chairman of the Board of Tehran Esteghlal FC.
Within the company’s stated domain is every possible activity that would be considered illegal by the Federation itself. In its own paperwork, the FFFG describes itself as a company that would, in effect, monopolize and devour all the financial resources of Iranian football. The scope of its activities is listed on the certificate of incorporation as follows:
“Performing all services related to contracts for financial support and branding, setting the environment in stadiums where football events take place, creation of content, value-added networks of physical and online discount and credit stores for football and football clubs’ fans (fan and consumer items, entertainment items, medical items and services), apps in the area of football and football fans, ball sponsorship, football gear and equipment, natural and artificial turfs, activities around the football field within the rules of the Federation and of the Football League Organization, production of merchandise with the Federation’s brand, merchandise or football symbols and balloons and products that laws and regulations allow, utilization of special league titles to attract sponsors, placing a stand in the entrance of football league’s building for introducing financial sponsors, all activities related to the stand, ceremonies and the programs for awarding the championship cup for the Pro League, Knockout Tournament and super leagues, messaging system and fan club for fans of Football League Organization or for supporting Iran’s Football Clubs League, holding Football League Organization ceremonies, gathering and training workshops, bringing international football figures and renowned foreign teams for observing and holding competitions, selection of the week’s best players during Pro League competitions and the awards given to them by sponsors, choosing best spectators with cultural suggestions and selecting the best spectators by holding verbal competitions among fans on the organization’s website.”
In other words, the Federation under Mehdi Taj has left no opportunity for any third party to make a penny in the field of football in Iran. If a fan of Esteghlal, Persepolis, Tractor Sazi, or Sepahan Football Clubs sent a message to their favorite team or on its platforms, a percentage of the cost would go straight into the pocket of the directors who have illicitly registered this firm. At the same time, its establishment through these first directors is a clear violation of FIFA rules.
Violating All Laws and Statutes
The management of FFFG is made up of two current members of Iran’s Football Federation and the senior director of a football club.
FIFA’s bylaws strictly forbid any “conflict of interest” involving managers, coaches, agents and players in their dealings with world outside football, including business partnerships between football managers. This is in order to prevent “money laundering”, “collusion” and “betting gangs”: in effect, to prevent match-fixing.
By means of a hypothetical example, Herbert Hainer, chairman of the Bayern Munich FC Supervisory Board, cannot enter into a business partnership with a senior official of Germany’s Football Federation. If such a partnership is proven, the German authorities would take legal action against both entities and FIFA would exact a penalty on German football. Similarly, it is against the rules for Esmail Khalilzadeh, as chairman of the Board of Tehran Esteghlal FC, to enter into a business partnership with two high-ranking officials of Iran’s Football Federation.
In addition, neither of these two high-ranking officials, Sadegh Doroodgar and Mahmoud Eslamian, are permitted to create such a company. Officials of a national football federation or a country’s league organization are not allowed to form independent businesses that run parallel to a football federation and benefit from its cooperation. Furthermore, to prevent collusion, these officials are also banned from participating in betting activities and from entering into partnerships with sponsors of FIFA’s member federations.
So why, when both Iran’s Football Federation and FIFA already have a defined “financial department” in their own organizational charts, should a “parallel” company be getting its hands on the Federation’s monthly revenue – which totals more than $7 million?
The Iranian Federation’s own charter has no provision for forming such companies. According to Article 43 of the Federation’s charter, the Iranian National Football Team’s activities fall under the control of its own technical committee. And according to Article 53, all financial activities of the Federation must be approved by its marketing committee.
What FIFA (Hasn’t) Told Us
IranWire contacted FIFA in an attempt to better understand the situation. In an email to FIFA, we summarized the situation as follows:
“In the past 10 years, Iran’s Football Federation has launched private parallel entities for running the Iran’s Pro League, futsal and the National Football Team.
“Now it seems the newest such entity is to work directly with the Financial Department, meaning procurement of the budget and of financial sponsors, a function that was previously performed by the Federation’s own marketing and financial committees.
“We must also point out that the partners of this private company are real people who have parallel responsibilities on the Federation’s board of directors. They are close to Mehdi Taj, the former president of the Federation.”
In short, what we asked FIFA was: Is this company registered legally, and do its directors have the right to hold parallel responsibilities within the Federation and Iranian football clubs?
FIFA’s answer was even shorter: it directed us straight to its own statutes.
It took us a day to review the content. Below is the follow-up letter we wrote to FIFA, again summarizing our own understanding of the matter:
You asked me to refer to FIFA’s statutes to find more information about commitments by member federations. In fact, I had studied FIFA’s statutes before sending my first email. I was particularly interested in Article 15.I, which clearly explains one of the commitments by member federations: “to avoid conflicts of interests in decision-making.”
Article 15.I is relevant to one of the very serious cases of violation by Iran’s federation throughout the years.
My question was simple and now I put it in even simpler terms: does registration of a parallel company with the participation of members of the football federation and an official of Iran’s football clubs violate this provision of your statutes?
At the same time, I must bring up the following points.
First, can I assume from your reply that forming a business entity that works parallel to Iran’s Football Federation when its partners are officials of the same federation is a clear example of “conflicts of interest” as defined by Article 15.I of FIFA’s statutes?
Second, if my assumption is wrong, please inform me as soon as possible since I am writing a report that is based on this assumption, meaning a breach in the rule governing “conflicts of interest”.
Third, if I do not receive a reply from the International Football Federation, can I assume that the federation’s action violates that article in FIFA’s statutes?
Fourth, if you again refer me to FIFA’s statutes, I take it for granted that you are confirming my findings from re-examining FIFA’s statutes are accurate and this member federation of yours has violated the specified article.
I need to remind you that earlier, in 2011, a similar parallel company was launched with around five partners. I can clearly refer to Ali Karimi, the best Asian footballer in 2004, who, in a TV program in February 2018, protested the disappearance of the Iranian Football Federation’s money through these companies.
I eagerly await your answer.
A few hours later we received FIFA’s response: “Dear friend. We respectfully and amiably refer you to the same earlier answer.”
This appears to confirm the fourth point in our message to FIFA. In a complete violation of the law, Iran’s Football Federation and by extension Mehdi Taj have formed a company to confiscate the Federation’s revenues. For quite understandable reasons, FIFA cannot unequivocally confirm this. If it does, it would immediately be embroiled in a fight with Mehdi Taj and Iran’s Football Federation. If it does not, it would be ignoring its own statutes.
Earlier Shady Deals
To better understand how Mehdi Taj has exploited his position at the helm of the Federation in this way before, it is worth revisiting two earlier examples: his granting the Islamic Republic of Iran Broadcasting (IRIB) the right to broadcast football games on TV and, secondly, the Federation’s unlawful contract with the Farakav Institute, a digital media and marketing company, in November 2019.
This second contract was illegal because the Football Federation handed exclusive rights to the online streaming of football events without following due process by going out to tender. Farakav owns the popular Varzesh 3 website, a strident backer of Mehdi Taj. When the contract was signed it Varzesh 3 claimed it would not infringe on IRIB [Islamic Republic of Iran Broadcasting, the state-run media]’s right to live broadcasting.
The value of the contract with a firm that doubtless continued to promote Mehdi Taj online was never stated. No judicial or overseeing authority was involved. The Football Federation has consistently escaped any form of audit before or after such agreements have been made, and was not held to account even after hundreds of thousands of dollars it had received from FIFA simply disappeared in 2018.
Why This Company?
Mehdi Taj wanted to have everything that belongs to Iran’s football, at once and without any time limits. Through his confidential correspondence with FIFA, he pushed Iran to the edge of suspension – first by firing retirement-age employees and secondly on resigning from the presidency of the Federation [Persian links].
The FFFG is not time-limited and if it achieves its stated objectives, it could go on confiscating revenues from Iranian football – at both national and club levels – indefinitely, in a total monopoly. The upshot for Taj is that even after his resignation from the Federation, he could still be making money from it. From messages by fans to the sale of branded jerseys, from sponsored billboards the rights to TV and digital broadcasts, there is a very good income to be made.
And the next president of the Federation, whoever they might be, would have to deal with an empty till.