BrandArena: Who is blame for Arsenal's sponsorship fraud issue?

Wednesday 18 July 2018

Who is blame for Arsenal's sponsorship fraud issue?

How did Arsenal, a club that has long-needed to step up its commercial sponsorship, manage to somehow agree to a deal with Chinese car manufacture BYD, only to find out on Monday that, in fact, they were done in by a conman?

This is the major question fans of the club have continued to ask.

Arsenal in April announced an agreement with the Warren Buffett-backed Chinese company becoming the club’s official car and bus partner. To announce the partnership Laurent Koscielny, Skhodran Mustafi, and Granit Xhaka holding up an Arsenal shirt with BYD on the back was released to the media. But no one saw it coming that the deal could become an issue of fraud.

The Shenzhen-based company released a statement on 4th July that revealed a female suspect name Li Juan had been arrested by Chinese authorities after being reported for securing fraudulent deals on behalf of the company.

‘We have found some illegal entities and/or individuals carrying out advertising business by forging our company’s seal and/or conducting it on behalf of our company (“Fraud Issues”). We made a statement on our website on 13th June, 2018. The criminal suspect Li Juan (English name: Liki Li) has been detained by the Chinese Public Security Authority after our reporting. Hereby we reiterate that BYD was never involved in and is not responsible for any fraud issues. Please make sure to report to the authority responsible whenever you find yourself a victim’, statement by the company read.

According to emerging reports, Li had allegedly been conducting marketing activities in BYD’s name over the past three years, and signed deals involving dozens of partners.

Arsenal recently released a statement on their Chinese portal confirming the club’s partnership with BYD was potentially fraudulently arranged.

Arsenal in its release statement also stated that ‘BYD has informed Arsenal that they believe they have been the victim of a fraud in relation to various advertising agreements. This includes our partnership with BYD which was formally launched by both parties at an event at the Emirates on 8th May. We are investigating the situation and discussing it with senior level BYD representatives who were involved in the launch of the partnership. We will make no further comments on this matter.’

When the partnership was announced on Arsenal’s website, the club’s chief commercial officer, Vinai Venkatesham and Sherry Li, BYD’s brand and public relations director were quoted in a statement posted.

Well, the learning curve for Arsenal is to do a bit more due diligence before signing any contract. And for BYD, they should pay more attention to their brand reputation. You don't need to wait for over two weeks to react if the deal was not legal. 

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