The Football Association (FA) is reviewing evidence concerning the relationship between a former director of Watford’s parent company and the controversial agent Mogi Bayat over a potential conflict of interest. Bayat is being investigated by Belgian and French authorities in relation to his alleged involvement in corrupt transfer dealings.

Lorenzo Gallucci was a director of Hornets Investment at the same time as two of his companies — Cordis Holdings and Galzar Consulting — engaged in business with MB Foot, the UK company set up by Bayat in June 2019.

Gallucci resigned from his role with Hornets Investment in September 2020, but had been involved in a business relationship with Bayat for a period of 15 months at the same time. This included holding a four per cent shareholding in MB Foot, which continued until May 2021.

The FA’s focus on relationship between Gallucci and Bayat (pictured above) relates to the regulations on working with intermediaries.

Rules state that a club “shall not have any interest in the business or affairs of an intermediary or intermediary organisation” or vice versa. An interest is defined as “being in a position or having any association that may enable the exercise of a material, financial, commercial, administrative, managerial or any other influence over the affairs of the club or intermediary (as applicable) whether directly or indirectly and whether formally or informally.”

The rules also highlight a duty for clubs or intermediaries to disclose to the FA “any agreement or contractual or other arrangement whether formal or informal” within 10 days of the parties entering into a relationship. Any breach of the rules is deemed as misconduct and would be dealt with by the FA’s regulatory commission.

Watford told The Athletic they pay MB Foot strictly as an intermediary in transfers and contract negotiations through the appropriate channels and are confident that no rules have been broken in relation to the relationship between Gallucci and Bayat.

They said: “The club are not concerned at any conflict of interest given Mr Gallucci has never held a board position or role at Watford FC and therefore would have no influence on any aspect of the football club. Parent and/or club holding companies are not regulated by The FA so there was no requirement to notify The FA of any detail.”

While holding or parent companies are not ordinarily within the jurisdiction of the FA, there is an obligation on clubs to report any interest or potential breach of rules and regulations, regardless of how that interest arises.

Gallucci outlined to The Athletic that he was not involved in the economic affairs or player trading of MB Foot whilst also director of Hornets Investment but set up the company and fulfilled an accountancy role for Bayat, a role he still fulfils. He confirmed that he did hold a four per cent share in MB Foot, however he did not receive any directorship or dividend payments during that period or financial reimbursement when his company Galzar handed them back.

During the period that Gallucci was involved with MB Foot the company reported shareholder funds of £802,000 in 2020 and £1.8million in 2021, but Gallucci insists that rather than his four per cent equating to monetary values of £32,080 and £72,688 respectively, his four per cent shares retained the nominal value of £1 per share when they were surrendered in 2021.

Bayat’s legal representative Tom Bauwens told The Athletic that his client was introduced to Gallucci by “contacts within Watford” and that “different entities” also helped set up his business structure.

“In full transparency and alignment with UK regulations, Mr. Gallucci intervened merely in the setup of the company, where it is completely normal within the framework of UK regulations that he took a personal stake in the structure for mere administrative reasons. Mr. Galucci was never renumerated nor did any other activity besides the mere setup of the structure, following which he transferred the shares to Mr. Bayat,” he said.

Watford were a Premier League side when the relationship between Gallucci and Bayat began in 2019, but the club dropped into the EFL in 2020. Both leagues advised The Athletic that it would be down to the FA to advise on any issues related to the relationships between clubs and intermediaries.

FIFA regulations on working with intermediaries that clubs must use “reasonable endeavour” to ensure that there is no conflict of interest, or at least the conflict of interest is unlikely to exist between the parties prior to engaging with the services of the intermediary.

In a further development Belgian federal prosecutors have offered guidance to The Athletic regarding the investigation into Bayat and other suspects. They have highlighted that it is an ongoing investigation and although they admit that they have been close to finalising the process on two occasions over the last year, further evidence has come to light in a broad operation into corruption in Belgian football.

One source within the Belgian judicial system with a knowledge of the investigation, who wanted to remain anonymous, told The Athletic that he expected the investigation to be concluded within the next few months. Once it is finished, prosecutors will present their evidence to a concealed legislative chamber to a panel of independent judges who will decide if trials will take place. Those trials may be focused on individuals alone or cases featuring multiple suspects together.

In respect of this matter Bayat’s lawyers said: “We do not comment as regards ongoing investigations and files. Any comment or discussion will be held at the appropriate time at the appropriate venue.”

(Photo: Getty Images)