Arsenal find themselves embroiled in a bit of a scandal after Chinese automaker, BYD Auto Co. accused a number of people of using its name illegally to strike deals, including one with the Gunners.

The matter certainly seems a little confusing at this point.

Arsenal announced that it had signed a deal with BYD back in April but it seems as if they might have agreed this with someone called Li Juan, who has reportedly been arrested by Shanghai authorities.

It is alleged that Li rented office space in Shanghai and claimed they were a branch of BYD despite having never been employed by the electric car manufacturer.

If Arsenal have indeed agreed the deal with a scamster, it will be very embarrassing for the club who have been taking big steps to improve their commercial department. On Friday, they issued a statement to say the club is investigating  the situation and discussing the matter with senior BYD representative “who were involved in the launch of the partnership.”

BYD Arsenal cooperation event site documents via The Paper in China

Given that Arsenal believe that ‘senior representatives’ from the company were involved with the deal, they shouldn’t have anything to worry about. A check on Arsenal.com for their official announcement of the deal shows a statement from Sherry Li. This Li does actually seem to be employed by BYD as their branding and PR division’s general manager.

via Arsenal.com

But BYD seem concerned about the deal and it was them who informed Arsenal that they believe the club could be a victim of fraud.

Arsenal’s statement was released on their China website on 13 July, not the dot.com and read as follows:

BYD has informed Arsenal that they believe they have been the victim of a fraud in relation to various advertising agreements. This includes our partnership with BYD which was formally launched by both parties at an event at Emirates Stadium on 8th May. We are investigating the situation and discussing it with senior level BYD representatives who were involved in the launch of the partnership. We will make no further comments on this matter.

It’s not clear at this point how this is possible – that Arsenal have both been the victim of a scam and found an official agreement with the company anyway. It seems as if Arsenal might have agreed two contracts, one with the actual company and another with the scamster, according to the New Paper in China.

I’ll be keeping an eye on this story as it develops and will update when anything happens to make the matter clearer.  There is certainly much more to come from this story.

As a result of this matter, BYD’s share price fell 5.1 per cent in Hong Kong.