West Ham United were fined a record ?5.5 million (US$10.97 million) by a Premier League panel on Friday for breaching ownership rules over the signings of Argentines Carlos Tevez and Javier Mascherano last August. West Ham admitted the charges and avoided a points deduction that would have almost certainly condemned them to relegation from the Premier League.
The fine is the biggest in English soccer history, dwarfing the old record of ?1.5 million imposed on Tottenham Hotspur in 1994 for financial irregularities, and reflected the club's "dishonesty and deceit" in the affair.
The case centred on the third-party ownership of the players, who were signed from Brazilian club Corinthians but with contracts that involved giving rights to outside companies.
The transfers effectively breached Premier League rule U18 that no club should enter into a contract enabling another party to influence its policies or performances.
West Ham were also charged with failing to disclose details of the deals, thereby breaking rule B13, which obliges clubs to deal with each other and with the league in "utmost good faith."
In its judgment, the independent commission said: "It is clear to us, and by their acceptance of the charge also to West Ham, that these contracts constitute a breach of Rule U18 and that those third parties acquired the ability materially to influence the club's policies or performance of the team."
The panel added: "These are exceedingly serious allegations because they amount to not only an obvious and deliberate breach of the Rules, but a grave breach of trust as to the FAPL [Premier League] and its constituent members, because in our finding the club has been responsible for dishonesty and deceit."
The latter refers to a conversation in September between Premier League chief executive Richard Scudamore and then West Ham chief executive Paul Aldridge.
Wanting to know how West Ham had managed to get two members of Argentina's World Cup squad without a fee, Scudamore asked Aldridge if there was any paperwork the FAPL had not seen -- only to be assured there was none, the commission said.
It added: "An officer of the club, its chief executive officer, told Mr Scudamore a direct lie, namely there was no documentation of whatever kind in respect of these players which the FAPL had not seen."
Despite the seriousness of the affair, the commission took into account several mitigating factors.
Top of the list was that the club admitted the charges and that it had changed ownership in November, with new chairman Eggert Magnusson, a former owner and CEO of an import/export and bread and biscuit manufacturing company, at the head of an Icelandic consortium.
As for the sanctions, it said: "Some clubs, perhaps those who are locked in the relegation battle with West Ham, may be of the view that only a points deduction would be appropriate. We have finally come to the view that a deduction of points would not be proportionate punishment... [it] would have consigned the club to certain relegation."
The London club are 19th in the 20-team league with three games to play as of yesterday.
The commission fined West Ham ?2.5 million for rule-breaking and ?3 million for the non-disclosure, while the Premier League were given the right to terminate Tevez's registration.
Following the verdict, West Ham said on their Web site: "The club regrets the fact that they fell foul of the FA Premier League regulations, but the new owners of the club now want to focus on matters on the pitch and remaining in the Premier League."
The Premier League later confirmed that Tevez would be available to play for West Ham for the remainder of the season after a new contractual agreement was reached over the Argentinian striker.
Mascherano, who made only three first-team starts at West Ham, was transferred in January to Liverpool, where his contractual position has been regularised.
During his time at Anfield he has rediscovered the form that made him one of Argentina's most impressive performers at last summer's World Cup.
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