Home/ Industry / Media/  Fide yet to get World Chess Championship prize fund

Sochi (Russia): It is inconceivable that the Russian organizers of the ongoing world chess championship won’t pay Magnus Carlsen and Viswanathan Anand their match fees, but a top official on Friday revealed that the world chess federation hadn’t yet received in its bank account the event’s prize fund of €1 million.

Coming at the halfway stage, barely two weeks before the match is to conclude, it points to the state of affairs at the world chess federation better known by its French acronym Fide (derived from Federation Internationale des Eches).

Fide has been mired in controversy ever since it awarded in February 2012 the commercial rights to manage the world chess championships for 10 years to little-known Agon Ltd, a firm registered in Jersey in the Channel Islands, a tax haven.

Adding to the drama, it has now emerged that Andrew Paulson, the founder of Agon, who until about a year ago was the principal promoter of the sport and described himself as the chief executive of world chess, has sold the firm to an associate, Ilya Merenzon, for £1.

The price shows at once that Agon hasn’t been able to build any equity for itself, having promoted chess at the highest level for over two years. It isn’t immediately known whether the firm has any liabilities.

Without rebutting the Fide official’s allegation, Merenzon said: “I cannot comment on what Makro (deputy president Georgios Makropoulos) said about the money not being transferred to the Fide account, but I can assure you that all contractual commitments are being fulfilled."

Not surprisingly, Paulson, a businessman settled in London, who had positioned himself as the Bernie Ecclestone of chess, wasn’t seen in Sochi at all, fuelling speculation about his whereabouts and interest in Agon.

In an emailed statement, Merenzon said on Sunday that he is currently the sole owner of the firm, having bought it earlier this year. Paulson couldn’t immediately be contacted for comments.

To be sure, with the Kremlin taking a direct interest in the event—Russia’s deputy prime minister Arkady Dvorkovich heads the organizing committee—and Russian state-controlled gas company Gazprom named as one of the main sponsors, €1 million will flow into Fide’s account before the match ends.

But Makropoulos’s revelation that the money hasn’t been transferred to Fide yet combined with the sudden change in ownership at Agon could rekindle the controversy over awarding the marketing rights of the sport’s most important event to a firm that has no track record in this kind of activity.

Merenzon describes himself as a public relations and marketing professional, who is working on the foundation laid by Paulson “to make sure that potential sponsors can get as much out of...chess as possible".

World champion Carlsen’s manager Espen Agdestein has said in an interview during the ongoing match at Sochi that he wasn’t impressed with Fide’s efforts to market the world chess championship.

On Friday, Russia’s deputy prime minister Dvorkovich said he was “satisfied" with the arrangements at Sochi, considering “the short period of time" the organizers had to put things together.

Agon’s ownership has always been controversial. There have been allegations that Fide’s president for the past 19 years, Kirsan Ilyumzhinov, had an interest in it, either directly or through structured funding arrangements.

Earlier this year, Agon’s law firm McEvedy’s of London had issued a statement to the UK’s Sunday Times newspaper that Paulson was, at that time, the only shareholder in the firm, which had a paid-up capital of £2.

Agon had no directors, according to that statement. Its accounts were private and selectively shared with Fide officials as envisaged in the agreement over running the world chess championship, McEvedy’s had said.

The statement was issued in response to a Sunday Times report earlier this year, which said Ilyumzhinov had a proxy interest in the firm and he might not have disclosed to the Fide board his conflict of interest when awarding the contract to Agon for running the world chess championships.

Agon said the documents that the Sunday Times reporter had relied upon were stolen from its office by a “disgruntled employee...in breach of obligations of contractual confidence".

Even while admitting that there were some initial discussions with the Fide president, Agon said no contractual agreement had ever materialized and Ilyumzhinov never took any equity interest in any form—either directly or through proxies.

Ilyumzhinov, too, has denied having anything to do with Agon.

Notwithstanding the controversy over Agon, Paulson had some success with chess having held two major tournaments in London—the Fide Grand Prix in September-October 2012 and the Candidates Tournament in March-April 2013.

It helped him secure the office of the president of the English Chess Federation in October last year. However, he was forced to step down in March after he lost a vote of confidence.

Into his shoes has stepped in Merenzon, and his first task is to stump up €1 million—the statutory minimum prize fund for the ongoing world chess title match.

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Updated: 17 Nov 2014, 12:57 AM IST
Recommended For You
Get alerts on WhatsApp
Set Preferences My Reads Watchlist Feedback Redeem a Gift Card Logout