AIBA Heading for Bankruptcy, New Leadership

(ATR) The outgoing AIBA executive director says the Olympic boxing federation’s future is hanging by a thread.

In a lengthy and candid letter to executive committee members, obtained by Around the Rings, Tom Virgets sets out the scale of the problems facing AIBA and the enormous task the boxing body faces if it is to be saved from bankruptcy.

Virgets, who has overseen AIBA’s disastrous attempt to overhaul its governance and remain the sport’s governing body for next year’s Games, said he was quitting AIBA: "I have failed to meet this mandate".

In a further attempt to slash costs, he said all but three members of the AIBA staff were being shown the door.

The U.S. boxing administrator said the only way AIBA could continue as the Olympic IF after Tokyo 2020 was with a complete change of leadership including a revamped ruling executive.

Virgets said AIBA was in a perilous financial position after the IOC stripped the federation of Tokyo 2020 boxing rights, with has less than $400,000 in the bank. The organization is still trying to collect debts totaling over $1 million owed by the World Series of Boxing franchise, while Croatia, Morocco, Poland, Puerto Rico, Russia, Ukraine and Venezuela "all owe money".

Accusing the IOC of making decisions to bankrupt the federation, by not accepting the World Championships or WSB as qualifiers, Virgets said AIBA currently had no source of income.

"AIBA‘s income was completely dependent on being the Olympic IF," he wrote in the letter to ExCo members, saying the body had hoped to generate revenue from selling host agreements for seven planned Olympic qualifiers.

"The IOC removed the qualifiers from AIBA, they also took away all opportunity for WSB when they removed the Olympic quotas from the program," he said. "AIBA was generating a minimum of $8.5 million from these events.AIBA’s future was also dependent upon the $17.5 million expected from Olympic revenue [IOC’s distribution from Tokyo 2020 ]."

Virgets said this revenue could have allowed AIBA to continue operating "under a disciplined $6 million a year budget", generating enough annual revenue "to operate effectively, and be debt free by 2024".

The letter was circulated to boxing’s senior officials ahead of an extraordinary executive committee meeting on June 27 in Lausanne.

WSB could be declared bankrupt next week. The WSB Board met last week by conference call and decided to put the decision forward to the ExCo meeting.

AIBA’s fortunes may be linked to its continued determination to hold this year’s men’s and women’s World Championships in Russia. Despite ongoing concerns from IOC about Russia’s influence in the ailing boxing federation, Virgets confirmed AIBA officials were working with the LOC in Russia on preparations.

"AIBA has not been given any indication by the RBF or the LOC that these events won’t proceed," he said.

A proposal from Russian boxing federation chief Umar Kremlev to donate $16 million to wipe out AIBA’s debts remains on the table.

The IOC has questioned the origin of this money. Kremlev was asked to approach Deloitte or PwC "and have them certify that the money was clean and that it would be gifted without strings". "We hope that Umar is able to receive a positive determination from PwC or Deloitte," Virgets said.

Clearing AIBA’s debts and recognition from the IOC were necessary if the organization was to survive the current crisis, he said.

"The IOC has left the door open for AIBA to compete to continue as the Olympic IF after the Olympics. However, AIBA will have to completely change its leadership," he said.

"The IOC has made it very clear that they do not want anyone involved in a leadership role going forward that was involved in the politics of the organization previously. They also do not want anyone with a criminal record or alleged criminal ties holding a leadership/EC position. This will mean that AIBA will have to have an almost completely new board."

His remarks suggest AIBA’s interim president Mohamed Moustahsane will not be long in the job. A new interim president may be needed before an elective congress votes in a permanent replacement.

Virgets admitted there was no guarantee AIBA would remain the Olympic IF even if the debt was cleared and the IOC was satisfied in new leadership.

On June 26 in Lausanne, the IOC Session is expected to ratify the executive board’s decision to suspend AIBA from involvement in the Olympics.

"What is certain is that having a Congress and new elections at this point will not make a difference for this Olympics. Following the decision of the assembly [IOC Session], AIBA will only be discussed by the IOC EB following the 2020 Olympics," he said.

"The immediate need is to determine if AIBA has a future and the finances to continue."

Reported by Mark Bisson

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