The report that has led to this legal
battle between James M Dorsey and WSG bears significance because it
has brought to public the case of severe irregularity in AFC management and
financial dealings. However, the veracity of Dorsey's report has not
yet been challenged either by AFC or WSG. [To see the report by
James M Dorsey that has led to this legal battle follow: “The
World of Soccer: AFC reports to Malaysian Police about stolen payment
The WSG argument about confidentiality of
the audit and sources' alleged attempt to defame it seems to be further
shocking while, at the same time, raising the fundamental question
whether individuals, corporate houses and companies who are into illegal
transactions and activities be protected in the name of confidentiality.
That again, at an age when right to information and
transparency are being promoted as vital anti-corruption tools in
both public offices and corporate houses!
So, instead of rewarding the journalist
for bringing the irregularities to public, initiating legal proceedings
against him seems to be a design to intimidate journalists and media as
Mr. Dorsey's lawyers argued that he was not a
party to any confidentiality agreement and that if WSG had an issue it should
take it up with the AFC to whom the original report was addressed. The lawyers
noted further that the code of ethics of journalists in Singapore as well as in
numerous Asian countries, including Malaysia and Hong Kong shield journalists
from revealing sources.
In an affidavit to the court, Mr. Dorsey
asserted that he believed that WSG’s legal action was an attempt at
“indirectly discovering who within the AFC may have breached their
confidentiality and also suppress any well meaning or good intended
person from coming forward in the future and is seeking to punitively
punish those who may have spoken against them.”
WSG has said it applied to the High Court
to force Mr. Dorsey to reveal his sources with the intention of
launching possible defamation or breach of confidence proceedings. "We
want information so we can determine what charges to make and against
whom," WSG lawyer Deborah Barker told Agence France Presse.
The internal AFC audit conducted by
PriceWaterhouse Coopers (PwC) charged that Mr. Bin Hammam had used an
AFC sundry account as his personal account, questioned the terms and
negotiation procedure of a $1 billion marketing rights agreement between
WSG and the AFC and raised questions of $14 million in payments by a WSG
shareholder to Mr. Bin Hammam prior to the signing of the agreement.
In its report, PwC said that “it is highly
unusual for funds (especially in the amounts detailed here) that appear
to be for the benefit of Mr Hammam personally, to be deposited to an
organization’s bank account. In view of the recent allegations that have
surrounded Mr Hammam, it is our view that there is significant risk
that…the AFC may have been used as a vehicle to launder funds and that
the funds have been credited to the former President for an improper
purpose (Money Laundering risk)” or that “the AFC may have been used as
a vehicle to launder the receipt and payment of bribes.”
Malaysian police earlier this month
arrested the husband of an associate of Mr. Bin Hammam on suspicion of
helping steal documents related to one of the payments to Mr. Bin Hammam
from AFC’s head office in Kuala Lumpur.
WSG has refused to comment on the PwC
report and has threatened reporters, including the author of this
report, with defamation proceedings. However in an August 28, 2012
letter to this reporter WSG Group Legal Advisor Stephanie McManus
asserted that “PWC are incorrect and misconceived in suggesting that the
MRA was undervalued. They have neither considered the terms of the
contract correctly, the market, nor the circumstances in which it was
negotiated,” Ms. McManus wrote.
The master rights agreement is
controversial both because of the unexplained payments as well as
assertions by sources close to the AFC that the soccer group, in line
with common practice among international sport associations, should have
concluded a service provider rather than a master rights agreement with
WSG. The sources said such an agreement would have given the AFC greater
control of its rights and how they are exploited and enabled it to
better supervise the quality of services provided by WSG.
In a July 13 letter to lawyers Shearn
Delamore & Co, PWC explicitly leaves open the possibility that the AFC
might share the report with third parties. For that reason, the terms of
the report contain a clause that shields PwC from any liability should
the AFC choose to share the report with non-AFC institutions or persons.
The letter stipulates that the report is
intended “solely for the internal use and benefit of Shearn Delamore &
Co. and the Asian Football Confederation,” and that third parties are
not authorised to have access to the report. The letter however goes on
to say that should third parties gain access they agree that the report
was compiled in accordance with instructions by the law firm and the AFC
and that PwC is not liable for any consequences stemming from the fact
that third parties had been granted access.
Lawyers for FIFA earlier this year sought
unsuccessfully to introduce the report in Mr. Bin Hammam's appeal
proceedings in the Lausanne-based Court of Arbitration of Sport
against the world soccer body's banning for life of
the Qatari national from involvement on soccer on charges of bribery.
Both FIFA and the AFC have suspended M.
Bin Hammam on the basis of the report pending further investigation of
the allegations in the PwC report and separate charges that he last year
sought to bribe Caribbean soccer officials. Mr. Bin Hammam has denied
all allegations and charges.
About James M. Dorsey: A senior fellow with the S. Rajaratnam School of International Studies at Nanyang Technological
University in Singapore and the author of the blog, The
Turbulent World of Middle East Soccer.