Sheffield United’s principal sponsor Union Standard Group (USG) has fallen into administration after an investigation into its trading platforms.
The Australian Securities and Investments Commission (ASIC) investigated USG’s business within Australia after it was alleged that the company had acted unconscionably towards customers according to The Sydney Morning Herald. ASIC went on to suspend the services of USG where the company then entered into voluntary administration.
It was also reported that creditors to the company have filed claims that indicate USG owes AUS$30 million. It has assets of about AUS$6 million but may have access to AUS$40 million held on trust in China.
The Blades signed a three-year deal with USG in June 2019, in a deal which is thought to be worth £3.5 million per season for a front of shirt and sleeve sponsor.
Sheffield United released a statement earlier in July claiming that the findings of the investigation do not have any impact on the deal between the two organisations.
‘A spokesperson for USG has confirmed the following. The directors and management of USGFX are committed to continue working with all parties and assisting with matters to ensure all legal requirements are satisfied,’ the statement claimed.
‘USG Group, known as USG, consists of several companies, including USG AU, USG UK and others. The news relates only to USG AU and does not influence the financial status or service of USG.
‘The UK operation, USG UK, which is regulated by the FCA is not affected by this situation and continues to trade as normal.’
Yet Peter Krejci, the group administrator of BRI Ferrier, cast uncertainty over the deal after confirming that the sponsorship was through USG’s Australia headquarters.
Krejci said: “The sponsorship is on the Australian balance sheet as a pre-payment to Sheffield United.”
Despite USG UK and Australia being separate entities, they both share the same director, Hein Min Soe, a Myanmar-based majority stakeholder for the company.
The Sydney Morning Herald had uncovered earlier this year how representatives of USG had fake Commonwealth Bank business cards. ASIC also secured interim orders from the Federal Court in 2019 which restricted USG’s Australian business, which are still in effect at present.
ASIC provided evidence to the court that USG and its two representative companies, TradeFred and EuropeFX, had “systematically engaged in dishonest and unfair conduct in the course of carrying on its financial services business in Australia, including preventing customers from withdrawing money from their accounts.”
Both TradeFred and EuropeFX have ceased trading as of earlier this year.
Author: Jake Wilkin