By Paul Nicholson
August 6 – Inter Milan president Steven Zhang (pictured) is being pursued in a Hong Kong court for $250 million, according to documents filed August 2, 2021.
Zhang is one of the co-defendents alongside his father Zhang Jindong, the founder of Suning Group, one of the largest Chinese conglomerates, and Suning Appliance Group Co., Limited court.
The debt concerns a $165 million loan and $85 million note (that had been drawn down against) issued by Great Matrix Limited in August 2020. Great Matrix is one of the holding vehicles of Suning Group’s convenience store business, Suning Xiaodian.
The Zhangs – who acted as guarantors for the loans – have already been named as judgment debtors over bank loans of more than $1.75 billion owned by Suning.com. Suning Xiaodian was wholly owned by Suning.com. That debt was subject to enforcement in China however Suning Group saved Suning.com by restructuring via a sale of 24% of its shares to Chinese tech giant Alibaba.
The Zhang’s are believed to have cashed in on that sale but have not repaid their debt to Great Matrix.
Jason Kang of the global disputes and investigations law firm Kobre & Kim, counsel to the creditors behind the lawsuit filed by China Construction Bank (Asia) to retrieve the debt, said: “The creditors look forward to vindicating their rights in court and will take all action necessary to ensure that the outstanding debt is fully paid.”
It looks as though the only route for that debt to be repaid will be via the Zhang’s and their personal assets. That could include Inter Milan which although is owned in Luxembourg and whose majority shareholder is the Suning Holding Group controlled by Zhang.
In May Inter signed a$336 million deal with US based Oaktree Capital Management Group in the hope the deal will help the team’s troubled finances that were damaged by the Covid-19 pandemic.
The fund granted the loan to Great Horizon Sarl – the Luxembourg-based holdings company via which Suning controls Inter. Security for the loan is Suning’s 68.5% stake in Inter.
Last season was phenomenally successful for Zhang on the pitch as his Chines Super League Jiangsu Sining won the Chinese Super League and Inter Milan won Serie A. However, as soon as they won the league Zhang disbanded the club as Suning’s financial situation collapsed. Now the issue will be for Suning and Zhang to protect an already financially challenged Inter from its financial implosion in China.
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