League of Legends (LoL) developer Riot Games on Monday (8 August) issued former TSM coach Zhang "Peter Zhang” Yi a permanent ban from all LoL esports events.
“Peter Zhang violated the LCS Rule Set as well as the LCS Eligibility and Release Agreement by diverting portions of player salaries to accounts belonging to Peter Zhang and his associates, by misleading and failing to fully compensate a former TSM player for the sale of the player’s car, and by soliciting loans from TSM players and staff,” the competitive ruling read.
Zhang was accused of taking money from players' salaries earlier this year and was fired from his position at TSM in March, just two weeks before the end of the League of Legends Championship Series (LCS) Spring Split. An internal investigation followed in the coming months, the results of which confirmed the accusations.
According to a report first published by Dexerto, one of the most serious violations by Zhang was allegedly diverting approximately US$250,000 from player salaries into his own accounts.
The players were supposed to receive a portion of their pay from a third party in China, to whom Zhang instead provided his own accounts.
On top of that, Zhang agreed to sell a car for Hu "SwordArt" Shuo-Chieh, who was leaving the United States to return to Asia. The player sold the car for US$80,000, but never got the money from the sale.
After the player threatened to go to the police, he was paid a portion of the money, about $35,000. The $45,000 balance is allegedly not paid.
Eight TSM players and staff members, including players over whom Zhang had managerial responsibility, were also approached by him with requests to borrow money.
He claimed the money was needed for his grandmother's medical care in China, among other things. Zhang tried to get between US$1,500 and about US$22,000 from each player.
Two players loaned Zhang US$15,000 in total, which he has repaid in full, with the exception of about US$10,500 in interest.
According to the company, it became aware of Zhang's request for loans on or around 18 March this year, and took immediate action to prevent any more money from being loaned to Zhang.
As a result of the company's actions, US$54,000 was reportedly saved. Zhang has yet to return approximately US$4,500.
These allegations were confirmed and submitted by law firm Simpson Thacher & Bartlett LLP. They concluded in the investigation that they "observed evidence indicating other irregularities in connection with Zhang’s role in recruiting players from China".
The statement added that Zhang’s player recruiting methods “may have been motivated by personal gain, including in connection with the salary diversion scheme discussed above, rather than recruiting the best players for the team".
Zhang posted a statement on Twitlonger where he tried to explain his side of the story. According to the statement, he denied the act of being an agent to the players.
“I have never taken any amount of players' earnings as agent fee or helping them go to TSM," said Zhang.
He also apologised for his actions, specifically about selling SwordArt’s car, saying, "I was able to sell it, but I hid it from him and sent that money to my family for part of the expenses."
In the same statement, he claimed that "the money has been returned to all players", although this was disputed by the report from Simpson Thacher & Bartlett LLP.
He ended his statement with an apology to SwordArt and the TSM roster.
“My time at TSM has been great, but this year was especially hard. I wish the players all the best,” said Zhang.
The final ruling
The result of the investigation led to Zhang’s permanent ban from LoL esports or any other esports events related to Riot Games titles. According to the ruling, Zhang violated Rule 14.2.10 of the LCS.
According to this rule, known as the League Discretion rule, “Any other further act, failure to act, or behaviour which, in the sole judgment of League Officials, violates these Rules and/or the standards of integrity established by League for competitive gameplay.”
This blanket clause allows Riot to punish players who engage in acts deemed unfair (conflict of interest) or disorderly.
Zhang also violated Section 2 of the LCS Eligibility and Release Agreement which states that the player/coach “further agree to take no action that is inconsistent with applicable law, the Rules and/or the standards of good conduct, fair play and good sportsmanship.”
Zhang joined TSM in 2018 and quickly advanced to the position of Head of Player Development. He was fired from the organisation in March of 2022.
Latest in a string of controversies for TSM
While TSM is one of the most recognised esports organisations in the United States, they’ve been bathed in controversy for the last couple of seasons, mostly because of management.
Former TSM President Leena Xu was involved in a controversy over her relationship with Yiliang "Doublelift" Peng.
Xu having a direct say in whether or not a pro player was re-hired and what the terms of their contract were was seen as a conflict of interest by professional standards.
Doublelift quit TSM towards the end of 2021 and was vocal about his bad experiences with Andy "Reginald" Dinh, the company's owner.
After Doublelift left, Xu, former coach Søren "Bjergsen" Bjerg, and General Manager Parth Naidu followed suit.
This led to an investigation of the TSM owner’s misconduct, who had then been notorious for bullying his employees and players.
Riot would express in a ruling against the owner that "there was a pattern and practice of disparaging and bullying behaviour exhibited by Andy Dinh towards TSM players and staff members".
TSM was fined US$75,000, and Dinh was put on probation "for the next two years across the Riot ecosystem” and “must complete sensitivity training and executive training".
An independent entity would also monitor Dinh and TSM and have regular touchpoints with players and employees regarding the TSM owner’s behaviour.
As a result of all the chaos, the performance of TSM's LoL esports and Academy teams suffered in Season 2022, with the main roster ending in second to last place at the end of the LCS Spring Season.
This was the first time that the team missed the LCS playoffs.
Anna is a freelance writer and photographer. She is a gamer who loves RPGs and platformers, and is a League of Legends geek. She's also a food enthusiast who loves a good cup of black coffee.