Veteran promoter Arum (90) has previously defended working with Kinahan and has publically described him as "an honourable man."
Arum has described arranging boxing fights with Kinahan and says he has "developed a great deal of trust with my company."
But now, Arum is facing claims that his “revolting racial bias” prevented Welterweight champion Terence Crawford from landing big fights and earning tens of millions of dollars.
Champion boxer Crawford was recently named by Arum alongside Josh Taylor and Jamel Herring as one of three fighters Kinahan advises.
However, Crawford has now launched a lawsuit taking legal action against Arum in Nevada .
According to court papers, Crawford alleges that Arum "simply does not care about, support, or know how to promote Black fighters."
The fighter, who has hired top attorney Bryan Freedman and is suing for almost $10 million, also claims that Arum deliberately failed to build him into a pay-per-view star.
Crawford (34) signed a deal with New York-born Arum and his company Top Rank in 2011.
However, he split with Arum at a November 2021 press conference, saying he wanted to become a free agent to better land his dream bout with Errol Spence Jr.
The lawsuit filed in the Eighth Judicial District Court in Nevada on Wednesday states that Crawford “shines a spotlight on the systemic racism that runs through Top Rank".
The suit also claims that "Arum's sordid history with athletes of color, especially Black fighters, and his bias favoring white and Latino fighters is well-documented and known throughout the boxing world," and that "Arum makes no secret of his deep-seated bias against Black fighters."
Crawford claims breach of contract as well as fraudulent and negligent misrepresentation. He also alleges that Arum made disparaging comments about him in an effort to harm his reputation and impact future prospects with a new promoter.
The suit refers to a remark Arum made in 2020 that he "could build a house in Beverly Hills on the money I've lost on him in the last three fights."
It is alleged in court papers that for years, “professional boxers and others in the sports world have called out Top Rank’s owner Bob Arum for his disparate treatment of Black boxers, including those very same Black boxers that Top Rank is contractually obligated to promote”.
“Because this is boxing, a sport with a checkered history, and because Arum is now dismissed as just a grumpy old white man, Arum continues to make racist and bigoted statements and purposefully damage the reputations of Black boxers without any consequences,” it states.
“This is generally because the affected boxers, who are in long-term contracts with Top Rank, fear that if they speak up, they will be placed on the sideline and not given the opportunity to fight during the life of their deal, which could be 5 to 7 years.”
However, in a statement issued on Wednesday, Arum said: "Bud Crawford's lawsuit against Top Rank is frivolous.
“His vile accusations of racism are reckless and indefensible.
"He knows it, and his lawyer knows it. I have spent my entire working life as a champion of Black boxers, Latino boxers, and other boxers of color.
"I have no doubt the Court will see Crawford's case for the malicious extortion attempt that it is."
Arum, who has managed the likes of Muhammed Ali, previously praised Kinahan who now passes himself off as an "adviser" to young boxers, for securing a fight between Tyson Fury and Anthony Joshua.
Named by the High Court as a senior figure in the Kinahan organised crime gang, he nonetheless continues to operate from his Dubai bolthole where he has recently been snapped alongside a number of other fighters in pictures posted on social media.
In an interview on Newstalk Breakfast last year, when Kinahan’s background story was put to Arum, he dismissed the allegations, saying he only judges Kinahan for his interactions in boxing.
"Those are allegations and I don't know anything about that, and his dealings with us have been solely about Tyson Fury and the sport of boxing,” Arum said.
"And if anybody asks me, I would say without any question, that I find him to be an honourable man.
"Whatever the other allegations are and so forth - whether they're true or not true - I can't get into, and I'm not going to get into, because it's none of my business.
"He has developed a great deal of trust with my company, myself and our people.
"He certainly is a trusted confident of Tyson Fury - so obviously his participation and his views were most significant and most important in getting this off the ground."
Mr Arum also said that not only is he (Kinahan) intelligent... but he is "dead honest and forthright and he's a no-nonsense guy".
"You don't waste a lot of time beating around the bush with him," he added.
"Everything that he has told us and every promise that he's made to us, he's more than fulfilled - and I think he would say the same thing about us."
Asked about any concerns about Mr Kinahan's past and being named in the courts, Arum said: "I'm not naive - what did or didn't happen prior to his involvement in boxing is not of a major concern to me.
"First of all they're allegations, and secondly they don't really speak to how he has acted when he has been involved in boxing - which is forthright, honest, reliable, etc."
"In boxing, you might remind your prime minister, we've had situations where we've had athletes who were accused and convicted of major crimes serve their time and came into the sport of boxing and not only performed well but excelled, like Bernard Hopkins.
"Boxing has been used by many people who've had questionable backgrounds - if they come in to box, if they conduct themselves well - yes they then achieve a new type of attitude that people have to them because they're nothing but forthright and honest."