The £2.3billion ($2.8bn) generated from the sale of Chelsea last year is still frozen in a UK bank account despite promises to deliver it to Ukraine war victims.
The Athletic can reveal the licence granted by the UK government setting out the next stage in this process has a deadline of November 30, although this has been extended by joint agreement in the past and is likely to be extended yet again.
Former Chelsea owner Roman Abramovich was sanctioned by the UK government in March 2022 for links to the Russian government and was forced to sell the Premier League club — with the money earmarked to help victims of the war in Ukraine.
There is no sign of progress and the UK government is growing increasingly frustrated.
The Financial Times reported in June that Abramovich was contributing to the delay “because he wanted some of the money to be spent on people outside of Ukraine, such as ‘victims of food insecurity’”.
A UK government source, who spoke to The Athletic on the condition of anonymity to protect their job, corroborated this saying Abramovich is a factor in holding up the transfer of cash. Abramovich strongly rejects any suggestion he has a role in the process and a spokesperson for the 56-year-old strongly disputed that he is a factor in the hold-up.
The proceeds from the sale are frozen in a UK bank account after the Office of Financial Sanctions Implementation (OFSI) issued a licence to permit Abramovich to sell Chelsea. The money cannot be moved or used without a licence from OFSI.
The licence is the legal document enforcing the conditions of the transfer of cash. If the deadline is reached next month, the money will remain stuck in the bank account for now.
“The proceeds from the sale of Chelsea FC are frozen in a UK bank account while independent experts establish a foundation to manage and distribute the money,” said a spokesperson for the Foreign, Commonwealth and Development Office, which sanctioned Abramovich last year. “A licence application will then need to be made to move the funds to the foundation.”
When the Todd Boehley-Clearlake Capital consortium completed its takeover last May, the huge sum — which would make the charity one of the UK’s largest — was transferred to a bank account. However, it is still sitting there despite the ongoing war in Ukraine.
One of the factors holding up the deal is that because Abramovich is a Portuguese citizen, the UK government has involved the EU in signing off the deal for the new foundation, which means additional bureaucracy.
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A sensitive issue remains how precisely the funds should be allocated.
Abramovich said in a statement on the Chelsea website in March 2022 that the money would be “for the benefit of all victims of the war in Ukraine”, including by providing “critical funds towards the urgent and immediate needs of victims, as well as supporting the long-term work of recovery”.
The UK government’s stance is that the money must be spent within the territory of Ukraine.
The dispute appears to hinge on whether the money would go to people in need in Ukraine itself, or by some broader definition of victims of the war which could include people outside the country’s territory — a situation which the UK government would not be comfortable with.
“We’ve been clear since the sale of Chelsea FC went through that we’d only issue a licence that ensures the proceeds are specifically used for humanitarian purposes in Ukraine,” said a spokesperson for the Foreign, Commonwealth and Development Office. “We set that out in a unilateral declaration at the time and remain committed to that position.
“We want this money to reach Ukraine as quickly as possible and remain open to any arrangement that clearly delivers this in line with these conditions.”
The initial licence had an expiry date which has been extended multiple times, to the current one — November 30.
While another extension is a possibility, the UK government is getting increasingly frustrated about the delays and bureaucracy holding up the process as there is still no sign of the cash reaching victims of the Ukraine war.
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(Photo: Michael Regan – FIFA/FIFA via Getty Images)
