Red card for soccer sponsor’s ex-director

The first Australian company to sponsor an English Premier League team recently had a director banned.

USG this week clinched a three-year deal to become the shirt sponsor of Sheffield United

The first Australian company to sponsor a team in the prestigious English Premier League soccer competition over three decades recently had a director banned by the corporate regulator for four years and previously faced protests by clients in China.

While headquartered in Sydney, the parent company of foreign exchange broker Union Standard Group is also domiciled in Samoa, a known tax haven, and had also been targeted by rival foreign firms who attempted to copy their website and trading platforms and operate outside of Australia’s financial jurisdiction.

But USG, which this week clinched a three-year deal to become the shirt sponsor of Sheffield United in a move that will see its brand beamed to hundreds of millions of television viewers around the world every week during the EPL season, says it complies with financial regulations in Australia, where it holds an Australian Financial Services Licence, and elsewhere.

Its financial records also reveal the firm makes healthy revenue and profits.

USG chief executive Shay Zakhaim told The Australian the deal would help promote the forex trader’s brand to new markets.

“While we have our headquarters in Sydney we have in the past 24 months moved further overseas, including opening an office in London — and gaining a financial licence — last November.

“We also opened a Johannesburg office and will open more offices in our markets in Asia. In Asia-Pacific there are lot of followers of the EPL and then we have also a local strategy (in the UK) as well.”

Sheffield United gained promotion to the EPL in second place of the second-tier Championship last season, behind champions Norwich City. Norwich was sponsored by Foster’s Lager in the late 1980s.

USG’s deal has been promoted as being a record shirt sponsorship contract for Sheffield United, which last played in the EPL in 2006-07.

Some financial estimates for the 2018-19 EPL season had lower-ranked teams such as Brighton and Huddersfield Town, the latter of which featured Australian player Aaron Mooy but was relegated to the Championship, getting paid £1.5m-£2m ($2.7m-$3.6m) a season by their shirt sponsors.

The biggest teams such as Liverpool, Manchester City and Chelsea are said to have shirt deals worth up to £45m annually. But all clubs have their games shown live around the world, including Asia and North America, making even sponsorship deals with smaller clubs attractive to emerging brands.

USG’s last financial report lodged with the Australian Securities & Investments Commission shows the company made net profit after tax of $3.3m from $117m revenue in the 2018 financial year, compared with a $2.6m profit and $93m revenue in 2017.

The accounts were signed last October by then USG director James Clinnick, who has since stepped down from his role after being banned by ASIC in January from providing financial services for four years.

Mr Clinnick has appealed the decision at the Administrative Appeals Tribunal. ASIC’s decision included cancelling the Australian Financial Services licence of Jade Capital Partners, a provider of managed discretionary account (MDA) services.

In a statement at the time of the decision, ASIC said Jade contravened financial services laws by advertising misleading returns, fees and costs, performance history and results relating to MDA strategies, and alleged Mr Clinnick “was involved in Jade Capital’s breach of a financial services law by engaging in misleading and deceptive conduct”.

Mr Clinnick was one of two USG directors at the time its 2018 accounts were lodged, the other being Myanmar resident Soe Hein Minn.

“He was an employee and a director and yes he was banned due to something with his private company by ASIC and after that he left our company,” Mr Zakhaim said when asked about Mr Clinnick’s role at USG.

ASIC documents show USG has two new directors, Sydney-based John Martin and Darren Burns, and the company’s entire shareholding owned by the Samoan-domiciled Union Standard Group International Holdings Limited.

Samoa has been included on a list of “non-co-operative tax jurisdictions” released by the European Union in March.

USG was also in 2015 the subject of claims by a rival and similar looking website that its services were regulated by ASIC. The corporate regulator released information at the time showing USG had no association with the website.

In 2017, disgruntled USG clients stormed USG offices in Shanghai and held staff members against their will as part of an alleged extortion attempt. The employees were later released.

Mr Zahhaim said the way USG had dealt with the issues was a mark of its commitment to quality service for its clients.

“Our model is to provide the best service out there. We educate our clients and we always want to make the extra step for our ­clients.

“We have a lot of trading tools for our clients and we have a put a lot of money into the quality of our research. That is the main reason for our success.”