Joao Cancelo among stars at centre of transfer probe as Valencia and Benfica face investigation by Portuguese Public Prosecutor's Office over possible tax fraud and money laundering

According to a report from El Diario, the Portuguese Public Prosecutor's Office is investigating allegations of illicit commissions and financial misconduct in player transfers between Valencia and Benfica. The inquiry follows a complaint by former Valencia vice-president Miguel Zorio, who accused Benfica and ex-president Luis Filipe Vieira of inflating transfer values to benefit intermediaries, potentially violating tax laws.

The complaint highlighted questionable financial dealings surrounding the acquisition of Valencia by Peter Lim’s Meriton Holdings in December 2014. It focused on the purchase of player rights for Rodrigo and Andre Gomes from Benfica (both spent the 2014-15 season on loan at Valencia before being bought permanently in June 2015), with Meriton Capital Ltd. reportedly paying €30 million for the former and €15 million for the latter.

However, the complaint claimed Benfica inflated these prices through exaggerated intermediary and third-party fees, leading to Valencia overpaying for the players. The complaint revealed official financial figures; approximately €17.36 million and €5.68 million were reported as payments to third parties, intermediation services, financial update costs, and discounts for the transfers of Rodrigo and Gomes, respectively.

Additionally, the complaint mentioned transfers involving Enzo Perez (€25 million) and Joao Cancelo (€15 million), alleging that these inflated prices were designed to benefit intermediaries at the expense of Valencia’s shareholders. The complaint suggested that these deals, with excessive commission fees, could have violated tax laws.

"It is curious that the ordinary commission for brokerage of the agents is usually set at 10% of the price of the transfer and in previous cases it reaches figures higher than 50%. This curiosity must immediately translate into suspicion of illegality in commercial and fiscal matters," an excerpt from the complaint read (as quoted by El Diario).

So far, there have been no developments regarding the verdict of the investigation being carried out by the Portugal Public Prosecutor's Office. Valencia, for now, are a club in ruin. Having been hit hard economically by the coronavirus pandemic, Los Che have struggled to regain their lost glory among Spain's most powerful clubs. The Peter Lim era has plunged the club into deeper turmoil, with fans and former players repeatedly expressing their disappointment with the management of the Singaporean businessman. They face the unpleasant prospect of being relegated to the second division for the first time since 1986, and things could only get worse should they be found guilty.