By Meirion Jones
Senior Producer, BBC Newsnight
Fifa has launched a probe into whether Arsenal have broken regulations which may leave the club exposed to possible expulsion from the Champions League.
BBC Newsnight has learnt that a police probe in Belgium has concluded Arsenal made secret payments of £1m to Beveren.
Arsenal have admitted providing a loan to Beveren, but say they have never had a controlling influence over the club.
Fifa are investigating whether Arsenal have breached rules governing fair play and conflict of interest.
It was a mystery payment of one million pounds to an obscure Belgian football club in 2001 which sparked off a money-laundering investigation.
The club, Beveren, was in desperate financial straits and they refused to say where the cash had come from.
Fog of secrecy
Christian du Four, the Investigating Magistrate in the Flemish town of Dendermonde, told Newsnight, "A company with no name wanted to invest a million pounds in the club. We thought it rather bizarre."
At the same time the team threw out most of its Belgian players and replaced them with unknowns from an academy in Ivory Coast, West Africa. Belgian police suspected the fog of secrecy was hiding mafia involvement.
Instead after an investigation they have told Newsnight that they found Arsenal's secret hand behind the money.
Arsenal has a public deal with Beveren to play friendly matches and loan players but Arsenal have repeatedly denied that they put money into the club.
Arsenal now admit that they did loan money, indirectly, to Beveren. An Arsenal spokesman said "Arsenal confirms that it has never owned, directly or indirectly, any shares in Beveren or had any power whatsoever to influence its management or administration. It did in 2001 provide funds of 1,570,703 euros by way of loan to a member of the consortium to assist in stabilising the finances of Beveren."
If Arsenal secretly controlled another club, especially one such as Beveren who they bought Emmanuel Eboue from, they could be in breach of FIFA rules and could be heavily fined or even thrown out of the Champions League.
Arsene Wenger's Ivory Coast connection goes back a long way.
Wenger was given his break in management by Jean Marc Guillou. Guillou was a team mate of Platini in the French 1978 World Cup side and by the early '80s he was manager of Cannes with Wenger as his assistant. Guillou and Wenger bought players cheap from Africa.
Their first success was Youssouf Fofana bought from Ivory Coast. By the 1990s Wenger was Manager of Monaco. His old friend Guillou came to him with an idea to turn Ivory Coast into a football factory. Monaco put money into an Academy in the Ivorian capital run in cooperation with the local team Africa's top side ASEC of Abidjan.
The academy recruited 12-year-olds and trained them up. Chelsea's new recruit Salomon Kalou, Arsenal's Kolo Toure and Emmanuel Eboue and half the Ivory Coast World Cup squad are graduates of that Academy.
Arsenal signed Emmanuel Eboue from Beveren for a reported £1.5m
But after Wenger left Monaco the club stopped funding the academy and Guillou needed more funds to keep it going until the youngster were old enough to sell. Newsnight has obtained a document (Document A) signed by Guillou which lists 11 investors including himself.
According to the document they expected a 300% profit on their investment which would be made by selling the academy players on to Europe. ASECs boss Roger Ouegnin told us "They are not investors they are usurers." Also listed is Arsenal manager Arsene Wenger who according to the document expected to make nearly £100,000 on a £30,000 investment.
If his friend Guillou's claims are true this would put Arsene Wenger in the difficult position of making money on transfers - particularly as Arsenal bought Kolo Toure directly from the academy.
The payouts are still frozen subject to a series of legal cases in Belgium and France but we understand that Arsene Wenger now says there was a misunderstanding and his payment was a donation not an investment.
The first four players including Toure were sold directly from the Academy but it was difficult to get work permits for Ivorian players to compete in the top European leagues unless like Toure they already had enough international appearances to qualify. Guillou hit on the idea of buying up a Belgian first division club cheap since the Belgian FA had relatively weak regulations.
Once playing in a European League they would come to the attention of bigger clubs. Guillou could turn Beveren into a supermarket for Ivorian talent.
Arsene Wenger says he donated money to the Ivory Coast academy
But even taking control of a struggling Belgian club was going to cost more than a million pounds. Guilou did not have access to that amount of money but he knew a man who did.
Reading from his investigation, Mr Du Four said: "Jean Marc Guillou who is the manager of Beveren has very close contacts with Arsene Wenger the coach of Arsenal and that is why they went ahead with the contract."
He then highlighted one contract signed by Arsenal Vice-Chairman David Dein. The contract (Document B) shows Dein agreeing to advance 12 million Belgian francs (around £200,000) on behalf of Arsenal Football Club in an interest free loan to an associate of his called Raoul de Waele. The loan was to establish a company called Goal which would take over control of Beveren football club.
The loan and other money advanced by Arsenal would be repaid out of Goal's share of transfer profits. Du Four says that in all Arsenal put in £1m.
A director of Beveren, who did not wish to be identified, told Newsnight that in return for the £1m de Waele was given 50% control of Beveren and Guillou was given another 30%.
Du Four describes de Waele as Arsenal's "straw man" on the Beveren board. Newsnight has also seen the statement given to police by Beveren Chairman Francois van Hoof (Document C). This says Arsenal is the main shareholder in Goal and that Raoul de Waele is David Dein's trustee but that Arsenal do not want their involvement to be officially known.
Arsenal's Vice-Chairman David Dein signed a loan deal for Goal
The Beveren Director told us that the club agreed to give most of the profits from the sales of Ivorian players to Goal and Guillou. In the first year the split would be 60% for Goal, 30% for Guillou and just 10% for Beveren but in the following years the club would get 30% and Goal would get 40%.
The club sold players all over Europe including to France, Ukraine and Greece and of course Eboue to Arsenal in January 2005 just after he had married his Belgian girlfriend and acquired European citizenship.
It is not clear what happened to the millions of Euros generated by these sales but again if Arsenal ended up with a cut that will be a matter for Fifa. Belgian authorities were looking for the mafia not breaches of Fifa rules so they stopped their investigation and have kept it under wraps till now but they are happy to pass on their investigation file to Fifa.
Crucial last game
Newsnight watched an all-white crowd cheer on an all-black Beveren to victory in a crucial last game of the season last month to apparently save themselves from relegation but the deal with Arsenal and Guillou has now collapsed.
The club is again penniless and despite the last-ditch win has been threatened with relegation over its financial problems.
Kolo Toure - a graduate of the Ivory Coast academy was sold to Arsenal
Whatever happened to the millions in transfer fees very little of it seems to have ended up at the club.
The Ivorian stars Toure and Eboue are happy and will be facing Argentina in the World Cup in just over a week but back in Abidjan there is unhappiness that little of the money generated by football has made it back to the Ivory Coast. Roger Ouegnin at ASECS is still waiting for the £1m that he say Beveren owe them.
He and Guillou are counterclaiming against each other. Ouegnin also claims Arsenal have not paid him £500,000 which he says they owe for Kolo Toure even though he says it is just a "drop in the ocean" for them when Toure is worth £10 million plus.