Everton FC and RCD Espanyol football clubs sponsorship agreements with Power8 look to have backfired after the tech provider has been accused of fraud.
The Costa Rica-registered company which has offices in Spain has been accused by Taiwanese police of using its sponsorships deals to lure hundreds of investors in Asia into buying shares in the company before disappearing with their money.
It has emerged that emails to Power8 officials have bounced back and a message on its website now says operations are temporarily suspended. Spanish La Liga team Espanyol says has started legal action against the company after it failed to come forward with sponsorship payments.
Last year Power8 struck a $45m sponsorship deal with Spanish La Liga team RCD Espanyol which put the unknown technology company’s name on its stadium and team kit.
The branding also appeared on stadium advertising of English Premier League team Everton Football Club, alongside its top sponsors Umbro and Thai beer Chang.
Last week Taiwan police charged several people for alleged financial fraud and money laundering in relation to Power8.
Houchih Kuo, a lawyer in Taiwan representing some of the investors estimates that Power8 received around $300 million in total from investors across China, Taiwan, Indonesia and other Asian countries after promising investors shares paying weekly dividends of 2 per cent.
Kuo said the Power8 name was "placed next to other big companies on the websites of the football clubs, so people thought it was another international brand".
Club officials at Espanyol said that when the company approached the club it didn’t appear to have any business activities beyond a website but its representative in Spain promised that operations would be ramped up soon and arranged an upfront payment of €8 million.
Everton FC, which has yet to comment on the matter, join a spate of English clubs whose sponsorship agreements have been hurt by fraud. Three English clubs saw their sponsor 666Bet lose its gambling licence after it was part of a tax fraud and money laundering investigation.