You are completely correct - the circle I can’t square is if this is all about how Etihad make the payments - I.e. they get the money from the state - as a state backed headline - why hasn’t this been cleared up quickly and easily - since it’s an Etihad issue and certainly not illegal what is there to see. Equally why have City submitted a 100 page document when a simple “fuck off” would suffice.
The regulation in question limits investment from owner to a certain amount (as I understand it, the allowable losses level).
Funnelling extra money through an inflated sponsorship through another company owned by the club owner could be a fairly obvious way of getting round the regulation. That's what this hangs on, as I see it - has the owner been funnelling in extra tens of millions a year to make the losses (as they were at the time) less?
(using numbers for effect)
e.g. if club losses were 60M over the 3-year period, and the allowable limit of owner investment was 30M = there's a 30M shortfall.
If a sponsorship is increased by 10M a year, and the owner provides that extra 10M himself, he's investing more than the 30M allowable through a back channel.
If it can be proved, it looks on the face of it to be getting round the regulations. It will depend on the regulation wording.
If it can't be proved, it's difficult to see what action would stand up to legal scrutiny.