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AIBA’s newly named Interim President and Executive Vice President have announced that an out-of-court settlement has been reached to end a legal fight over a critical $10 million loan by one of the biggest creditors to WSB Americas Operation that had been guaranteed by the International Boxing Association (AIBA).

“The settlement that AIBA has reached with Benkons represents a significant step toward restoring the financial confidence and proper governance at AIBA because if the matter had been left open we could have faced bankruptcy,” said Gafur Rahimov, AIBA’s Interim President, and Franco Falcinelli, the Executive Vice President, in a joint statement.

The agreement calls for the reimbursement of part of the funds, beginning in 2021, while another portion of the amount will be converted into sponsorship.

“This will effectively reduce and delay AIBA’s overall cash payments at a time when we are cash-strapped,” said Rahimov, who led the effort to achieve the agreement well before he was named as the Interim President. “And it will put an end to the single biggest challenge that AIBA has been facing.”

Benkons, the company that extended the loan seven years ago, confirmed the settlement on Wednesday and said, “We had already initiated legal action against AIBA, but we agreed to the AIBA proposal as it is favourable for both parties.”

The boxing federation has been plagued by financial mismanagement and a lack of transparency, which led to the resignation in November of AIBA President CK Wu. Accounting irregularities at AIBA also raised concerns with the International Olympic Committee (IOC), which in December asked AIBA to submit a plan to address its governance and financial issues by January 31st.

“Clearly we are pleased to announce that this settlement has been reached,” said Falcinelli. “This news, of course, is included in our overall report to the IOC, which also provides a detailed update about the six issues they asked us to address: governance, management, financial, judging, refereeing and anti-doping.”

Rahimov was named Interim President at the AIBA Extraordinary Congress in Dubai on January 27th.  “Our message to the IOC and to the world of boxing is that AIBA is turning over a new leaf and we intend to demonstrate our responsibility to all National Federations and our commitment to the sport we all love,” he said.