Zhang's liability for $225m unpaid debt raises questions over Inter Milan's future

July 21 - Inter Milan owner Steven Zhang has failed to settle $255 million in debt held by Suning Xiaodian, loans he personally guaranteed.

On July 19, the Hong Kong High Court issued its summary judgment against Zhang, rejecting his defense that his signatures on the financial agreements were forged. The judge dismissed the idea that they had been tampered with as "contrary to inherent probabilities and common sense".

With Zhang legally responsible for the debts, questions will once again be raised about the future of Inter Milan, one of Zhang's few remaining assets which, if sold, would allow him to repay his debt. Last December, it was reportedly set to sell to Saudi Arabia's Public Investment Fund (PIF) for $1 billion.

The claim against Zhang was brought by China Construction Bank (Asia) Corporation Limited, on behalf of a group of foreign creditors. The $255 million included a $165 million facility provided to and an $85 million note issued by Great Matrix Ltd, to refinance Great Matrix's loan for the Suning Xiaodian spin-off from the holding company Suning.com (which owns Inter Milan). Steven Zhang is contractually liable under an intercreditor agreement and two personal guarantees.

Zhang holds senior positions at Suning Group and Inter Milan, and holds a majority stake in Suning Smart Life and Suning's immediate shareholder Xiaodian. The judge concluded that Zhang "clearly had a material interest" in the refinancing transaction and that any allegation to the contrary "provides little conviction or credibility", thus denying any argument that the debt was not in its interest and that it should be cancelled.< /p>

The judge noted that Zhang's "last minute gamble" to bring expert handwriting evidence "backfired" as the report confirmed that the signatures were written by Zhang.< /p>

"Creditors were extremely disappointed that instead of working on repaying his debt, Zhang attempted to shirk his responsibilities and chose to advance a defense that was clearly not credible and contrary to the common sense,” said Jason Kang of Kobre & Kim, who represents the creditors.

“This is the first judgment against Zhang obtained by creditors outside of mainland China. The creditors will take all necessary legal steps in multiple jurisdictions to enforce this judgment.”

China Construction Bank (Asia) Corporation Limited has already filed a lawsuit against Zhang and Inter Milan for invalidating the club's shareholder resolutions waiving payment of Zhang's remuneration as Inter Milan's president in reason that the money could have been used to repay his debt.

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