London: The European Commission (EU) has been investigating Spanish giants Real Madrid following allegations that they have received illegal state aid, the decision on which is overdue.
According to the Independent, it is alleged that the football club and the Madrid City Council had agreed on a favourable deal for land around the Bernabeu stadium which is to be redeveloped into a lucrative new shopping mall and hotel complex.
The report further said that the club`s pre-eminence in the transfer market and their ability to borrow money is partly dependent on the success of the development, as well as the construction of a roof over the stadium, which will then be subject to a naming rights auction.
The allegation against Real is that their transactions with Madrid city council, dating back to a 1996 agreement between the two parties, constitute illegal state aid under article 87 of the Treaty of the European Community. The report further said that it is alleged that the council hugely overestimated its debt to the football club in order that the former could give Real the prime city-centre land they require for their new development.
However, the club dismissed the allegations, saying that they had not received any ‘special privileges’ in its real estate activities since it has always been subject to the then current legislation and has received the same treatment as any other party. The club further claimed that the valuation of Las Tablas in 2011, which found its value to have increased 54-fold, was carried about by Madrid City Council, and was therefore ‘independent’.