Stricken Swiss football side Neuchâtel Xamax has slipped into near-oblivion, with its Chechen owner arrested just hours after declaring the club bankrupt.
Bulat Chagaev was detained by authorities in Geneva, who had been investigating him for suspected fraud, to prevent „financial mismanagement.“
Hours earlier, Xamax said it would file for bankruptcy, then was formally declared bankrupt by a court in canton Neuchâtel. The two-time Swiss champion will drop out of the Swiss Super League midseason.
Xamax’s season of turmoil on and off the field entered a terminal phase last week when the Swiss League revoked its license because of suspected fraud and a failure to prove it could meet its financial obligations. Its debts are estimated to be at least SFr8 million ($8.7 million).
Chagaev’s arrest was requested by prosecutors in Geneva, where his trading company has an office. „His provisional arrest was ordered after a hearing held this afternoon. Another hearing is already scheduled for (Friday),“ the Geneva authorities said in a statement.
Shortly before Chagaev’s arrest, his lawyer Jacques Barillon said in a statement that his client’s only goal had been to make the club prosper and not to draw any personal benefit from his ownership of the club.
Inevitable demise
Xamax accepted its increasingly inevitable demise in a brief statement on its website.
„The board of directors of Neuchatel Xamax has decided today to file for bankruptcy, because of the withdrawal of its license and the financial position of the company,“ the statement said. „The board also decided to immediately release the players from their obligations to the business.“
The club had launched an appeal Monday to regain its license to play matches, claiming that the league’s disciplinary commission acted beyond its powers. Xamax’s prospects dimmed Wednesday when it failed in two attempts to receive court injunctions against the league.
The first team’s players and staff had not received their salaries since October, and the club had not paid taxes it owed or rent for the stadium it uses for its home games in Neuchâtel.
Xamax was scheduled to face a bankruptcy hearing on Friday, forced by a creditor who also tried in November to bring the club down.
It was at that hearing that Chagaev’s legal team submitted an alleged fraudulent Bank of America letter which purported to prove he had $35 million in a New York account.
Prosecutors in Neuchâtel and Geneva are investigating the suspected fraud.
Only nine teams
Xamax was scheduled to resume its league program after the winter break on Saturday February 4 at home against Lausanne-Sports.
It was fourth in the ten-team top division though was likely to drop to ninth after points deductions imposed by the league for failing to pay salaries and breaking administrative rules.
Xamax coach Victor Munoz and a reduced squad of players returned this week from a training camp in Dubai unsure about their futures. Munoz, a former Barcelona and Spain midfielder, previously coached Chechen club Terek Grozny, which plays in Russia’s top division.
Terek Grozny’s chairman is Ramzan Kadyrov, a football fanatic and president of the Chechen republic. Chagaev formally took control of Xamax last May, and arrived claiming that Kadyrov was „like a brother“ to him.
However, Chagaev was reported to have fallen out of favour with Kadyrov as Xamax descended into turmoil with a succession of sporting directors, coaches and players fired.
Xamax is the first Swiss top-tier club to drop out midseason since Geneva’s Servette collapsed with debts in 2005. Eight years ago, Lausanne was also declared bankrupt.
Both teams have since made their way back into the top division after being dropped into regional leagues.
May 12: Bulat Chagaev officially takes over Xamax.
May 29: during half-time at the Swiss Cup Final Chagaev is reported to have entered the dressing room as Xamax trailed Sion, shouting “I’ll kill you all” to motivate his players.
May 30: former FC Zurich coach Bernard Challandes is fired.
June 2: Xamax administrative staff resign.
July 24: Chagaev dismisses sporting director, former Barcelona and Brazil striker Sonny Anderson, his coaching staff and three first team players.
July 28: Chagaev claims to be a victim of a conspiracy against him.
August 23: Xamax’s newly appointed chairman Andrei Rudakov receives his marching orders. Sponsors and fans start to desert the club.
September 2: coach Joaquin Caparros is fired.
September 20: Chagaev dumps main supporters’ club.
September 29: first complaint by Swiss Football League for lack of information during takeover.
October 5: Xamax agent files bankruptcy case against club.
October 13: Players’ union calls for strike for non-payment of salaries.
October 30: sporting director Christophe Moulin is fired.
November 2: SFL fine Xamax SFr20,000 ($21,400) for irregular payment of social security contributions and players‘ wages.
November 8: two penal procedures are opened for forgery and attempted fraud. The SFL files a third legal complaint over wages.
November 18: Neuchâtel prosecutor declares that Bank of America documents which confirmed Chagaev had access to $35 million are fake.
November 24 Chagaev is formally charged with forgery.
December 14: SFL deduct four points for disciplinary procedures.
January 4: club captain Stéphane Besle and three other players are fired.
January 18: SFL withdraws Xamax licence.
January 26: Xamax files for bankruptcy and owner Chagaev is arrested in Geneva.