Man City verdict puts UK-UAE diplomatic relations under strain

Abu Dhabi-owned Manchester City was found guilty of all but one of 115 charges brought against it by England’s Premier League after a four-year investigation.

A historic legal ruling against Manchester City Football Club has placed diplomatic ties between the UK and the United Arab Emirates under significant strain, with billions of pounds in projected foreign investment at stake.

Over the past five years, the UAE has poured more than £30 billion (S$50.6 billion) into major UK sectors, including defence, life sciences and technology. The two nations are eager to maintain their financial partnership, and an investment summit is pencilled in for October, but frustration on both sides has escalated due to the fallout surrounding the Manchester City case.

In a seismic judgment late last week, Abu Dhabi-owned Manchester City was found guilty of all but one of 115 charges brought against it by England’s Premier League after a four-year investigation. The club artificially inflated its financial results by more than £900 million, according to the findings of an independent commission published on Sept 29.

Potential punishments include points deduction, heavy fines or even expulsion from the Premier League.

The ruling is a major blow for the 18-year soft power project, at the top of which is Manchester City’s ultimate owner, Sheikh Mansour bin Zayed Al Nahyan, the brother of the UAE’s president. The Emirati owners, with Khaldoon Al Mubarak as the club’s chairman, have delivered eight premier league titles and transformed the club into a footballing superpower.

Emirati officials have warned the UK government that the severity of the ruling could undermine their appetite for future grand-scale UK commitments, according to people familiar with the matter. They consider the Premier League’s actions to have an influence on the bilateral state relationship, the people said, asking not to be identified discussing undisclosed information. 

UK government officials are equally frustrated by the conduct of their UAE counterparts in relation to the scandal, according to other people familiar with the matter. They believe some in the Gulf nation must have been aware of the extent of Manchester City’s wrongdoing, even while insisting there was nothing untoward, said the people, who asked not to be identified talking about private deliberations. 

The scandal has also caused splits in the UK government. Prime Minister Andy Burnham’s comments thanking Manchester City’s owners for their investment riled his own politicians who want to keep the process independent of government influence.

A spokesman for the UK government declined to comment. The UAE’s Foreign Ministry did not respond to a request for comment. 

The frustration from both sides comes at a crucial time for UK-UAE relations. The current investment partnership is up for discussion ahead of an Abu Dhabi summit to be held in London later in October, with British officials eager to secure more commitments.

Under the original five-year agreement, the UAE’s sovereign wealth fund Mubadala, led by Mubarak, committed £10 billion to British industries, though the total has reached nearly £30 billion. That has been a small part of a global commitment: Abu Dhabi, home to wealth funds holding more than $2 trillion (S$2.5 trillion) of assets, is planning to invest another $1.4 trillion in the US and has pledged $46 billion in Germany. 

Defence is central to UK-UAE talks, with the need for cooperation heightening due to the ongoing US-Iranian war and wider unrest in the Middle East. The UK lent military support to the UAE after the US and Israeli attacks on the Islamic Republic prompted Tehran to retaliate against Washington’s Gulf allies.

Despite both sides agreeing that talks on defence are far more important than football, the Premier League’s judgment has injected political tension into the negotiations. Longer standing issues remain contentious, including the UAE’s alleged role in the Sudanese civil war and the thwarted Emirates-backed takeover attempt of The Telegraph newspaper. 

Officials are now trying to smooth over the issue. In a UK media interview on Sept 30, Burnham thanked City Football Group – the owners of Man City – for their investment in Manchester. 

“I would be really concerned to lose them,” Burnham said. “They’ve been such a huge partner in the building of modern Manchester.” 

The relationship is important to Burnham and fellow senior politicians. Shortly after becoming Prime Minister in July, Burnham spoke to UAE President Sheikh Mohamed bin Zayed Al Nahyan. They connected over Manchester, where Burnham was mayor before ascending to the top job. Massive Emirati capital injections into urban regeneration across the east of the city helped bolster Burnham’s political profile during his tenure.

UK government officials have privately suggested that Premier League investigations are outside their control, given sporting regulation and judicial matters are not subject to state influence. 

 “The club is innocent of the accusations made by the Premier League and a comprehensive body of irrefutable evidence exists in support of all of its positions,” Manchester City said on Sept 29. The club has until Oct 2 to appeal the decision.

Manchester City has been one of the UAE’s most successful outlets for projecting soft power. Under Sheikh Mansour’s ownership, the club came out of the shadow of crosstown competitor Manchester United and usurped its historically more successful rival as a perennial challenger for league titles. It has attracted a string of star players, notably Sergio Aguero, Kevin De Bruyne and current striker Erling Haaland.

The league has yet to set out sanctions, but the guilty verdict already threatens to upend the Premier League and football in England more widely. Manchester City’s haul of trophies during the period in question potentially opens the door to compensation claims from rival clubs and even fans.

While no prosecutor is known to be looking at criminal charges, false accounting is a crime in England and Wales that carries potential jail terms. Meanwhile, the club’s auditors could face a probe from the Financial Reporting Council. Neither regulator responded to requests for comment.

The UK has long touted its investment links with the UAE. A little over a week before the Manchester City verdict, Burnham posted a video to his almost one million TikTok followers showing him inside a McLaren sports car boasting “that is the sound of Britain making things again”.

Burnham’s comments came as McLaren Automotive announced plans to invest £500 million into the UK, part of a larger commitment from McLaren Automotive shareholder L’IMAD Holding, a sovereign investor of the Government of Abu Dhabi.

But the prime minister’s recent comments backing Manchester City’s owners have riled local lawmakers. They risk undermining legislation aimed at preserving the operational autonomy of the Independent Football Regulator, which is responsible for determining the outcome of the case against Manchester City, Bloomberg reported. 

Downing Street later issued a statement saying Manchester City are not “above the rules”. BLOOMBERG