Update, 8/29: G2 co-owner Carlos “Ocelote” Rodriguez has commented, saying he was aware of the loan and it presents no conflict of interest for G2.
Back in May, three North American League of Legends teams were permanently banned from competition from Riot Games. Two of the teams, Renegades and Team Dragon Knights, were punished for allegedly have an ownership relationship against the rules.
Now another ownership scandal may be unfolding. Turner Sports Esports Host Richard Lewis published a video Monday alleging a financial relationship between G2 Esports co-owner Jens Hilgers and Fnatic, one of G2’s European rivals.
Lewis cites tax documents of SANNPA, a secondary company of Fnatic used to hold shares and manage the organization, and an organization Hilger has allegedly loaned money to. On July 21, 2016, SANNPA filed a registration of charge from Hilgers, meaning he loaned them money and as part of that deal, SANNPA granted Hilgers a security interest (a fixed charge).
You can find a PDF of the registration of charge here.
While it is unclear how much the loan was for or what the return payment terms are, there are two sections of the document that stood out:
Section 3.1: Fixed charge
As a continuing security for the payment and discharge of the Secured Liabilities, the Charger with full title guarantees charges to the Chargee by way of a first fixed charge:
3.2.1 all the Shares owned by it;
3.2.2 all Related Rights.
17.1 Appointment of attorneys
By way of security, the Charger irrevocably appoints the Chargee, every Receiver and every Delegate separately to be the attorney of the Charger and, in its name, on its behalf and as its act and deed, to execute any documents and do any acts and things that:
17.1.1 The Charger is required to execute and do under this deed; and/or
17.1.2 any attorney deems proper or desirable in exercise any of the rights, powers, authorities and discretions conferred by this deed or by law on the Chargee, any Receiver or any Delegate
This means 1) if Fnatic is unable to pay the loan back, Hilgers gains ownership of Fnatic and Fnatic Gear and 2) Hilgers has power of attorney in this deal.
This isn’t the first potential conflict of interest for Hilgers. The co-founder and former CEO of ESL, he is still a member of the advisory board on ESL while also being a co-owner of G2, one of the organizations that advisory board is supposed to oversee. He was also previously ESL’s Chairman of the Board while being co-owner of G2.
Hilgers commented on the story Thursday.
Making good progress with Riot Games on addressing the fnatic loan topic. Updates soon.— Jens Hilgers (@JensHilgers) August 25, 2016
Fnatic and G2 have not yet commented on the report.