Often Partisan

EGM Analysis

Birmingham International Holdings yesterday announced to the stock market that there would be an EGM of shareholders on February 5 to gain approval of proposals to float additional shares, to place two convertible bonds and to novate the debt between Carson Yeung and BCFC.

Before reading this story, please bear in mind that I’m not a qualified lawyer or accountant – I have taken advice where I can but I am just a layman. I will cite facts where and when I can but I advise you to treat any speculation from me with the scepticism all speculation deserves.

This Announcement – It’s Just More Guff Isn’t It?

The quick answer to this is that no, it is not. This EGM is vitally important to the running of the company due to the fact if these resolutions are not approved then in all likelihood it will signal the death knell of the company. BIH needs to bring in finance to ensure that the company can remain in business and the only way to do that is to sell more equity. Once the shares are relisted it will then become easier for the company to attract investment – but the shares cannot be relisted without the finance being in place.

Provided all the resolutions go through it will also release BCFC from a significant amount of debt and make it an even more attractive proposition for investment – it also reduces the impact of potential issues with who the debt is owed to down the line due to the lack of paperwork surrounding the loan.

Will The Resolutions Be Approved?

Without a crystal ball I cannot give a definitive answer but I believe that they will be. Although the placement of new shares will dilute smaller shareholders’ shareholdings it will also ensure that the company remains running – and the bald fact is that whilst your shares being reduced in worth hurts if the company stops running they become worthless and that hurts more.

Furthermore, I don’t believe that there will be a shareholder rebellion for the simple reason that there wasn’t one at the AGM. For all the talk of people like Liu Xingcheng and Vico Hui they appear to have either changed their minds or had their votes sidelined as everyone was re-elected with near enough 100 per cent of the vote.

So What Happens If They Are Approved?

The board state in the circular that the aim is to have the shares relisted by February 15; although they note that there are circumstances beyond their control that might prevent that. If all the resolutions are passed then the holding company will have to make a series of announcements to the stock exchange to fulfil the other criteria required – to wit the resignation of Carson Yeung as director, confirmation of results of the internal control review, a comfort letter from the auditors confirming finances are in place to keep the company running for the next 12 months, and confirmation of what the holding company are going to do with the club.

What do BIH Plan to do With the Club?

Tucked away in the announcement (on page 44) there is a paragraph stating that the company are in discussions with an independent third party with respect to the sale of an equity interest of up to 24% of BCFC – one quarter of the 96.58% that BIH owns. There is no further details with regards to this in the announcement.

I can only offer my speculation at this point, based on conversations I have had with people in the far east over the last few days. It’s my understanding that the independent third party would likely to be someone from the mainland of China. However, I do not believe that this will precipitate the sale of the club in its entirety. Should Carson be convicted on February 28 he will no longer be allowed to be a director of BCFC – however forcing him to sell his shares would be a much harder task for the football league and it’s not one I believe that they will pursue. Whilst it is true that conviction would mean that the restraint order against his assets could be converted into a confiscation order, it’s my understanding that such a conversion would be stayed pending any appeal – and it is also my understanding that should Carson be convicted he would most definitely appeal.

The appeal process would take 12-18 months in the first instance and maybe another year to year and a half if an appeal to the court of final appeal was required. It is my fear that Carson has no intention to sell the club and that he will use any time between potential conviction and appeal as an interim period before either having to accept his conviction and downfall (should that happen) or having any conviction overturned. I think the only reason he’s willing to sell a quarter is to gain investment to keep the company running in the meantime. It’s not the best scenario and it’s one that I think will fill many fans with dread.

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77 Responses to “EGM Analysis”

  • Art Watson says:

    Excellent summary Dan and your last paragraph perfectly sums up the likely outcome.

    Assuming it all goes according to plan do you see any future investment in new players and perhaps a push for promotion next season or do you think it’s just a survival plan?

  • Sh!t on the villa says:

    Delay no more! SELL OUR CLUB.

  • JohnR200 says:

    Well done for condensing the 84 page announcement to simple English i can understand. Although not ideal I think selling 24% of the club to a third party will be a good thing if it provides some investment in the team.

  • The Francis Fake says:

    A great summary again. The potential for an extended period of limbo pending the result of an appeal is worrying. Ajamajir, do you think admistration is a strong possibility if the re-listing fails and CY is convicted and if so what would the likely timing be?

    • chris says:

      I doubt admin will happen, Yeung won’t let it.
      They only have to get through this season and they will save £3.5 mill on Zigic’s wages and around another £3 million on Mullins, Ambrose, Murphy and Lovenkrands wages.
      Add this to the last £8 million in parachute payments which should pay off last seasons debts if it isn’t already spoken for??
      This should mean next season the club should be able to operate on a profit basis.

  • Chris W says:

    Another excellent breakdown on where we are regarding BIHL and Carson Yeung.
    The fact that BIHL appear to be doing the right thing in getting their finances in order and re-listing it is not going to solve the problems should Carson Yeung be found guilty.
    The thought of another 3 years of struggle while any appeal goes on fills me with fear that BCFC will go the same way Coventry has gone if not worse, Accrington Stanley or Bradford Park Avenue spring immediately to mind.
    I suppose the best case scenario is that CY is found not guilty and he then has the task of rebuilding is reputation and BCFC.
    I wish I could see a silver lining but all I see are more black, doom and gloom clouds, please tell me I am wrong….

  • Cbrccc says:

    Let’s hope they fail with this and go bump then as another 3 years CY lot and we won’t exist.
    Can’t think why anyone would want 25 % of a club in decline with the main shareholder possibly a convicted criminal, no control, and no chance of making a full purchase at a later date.
    So that bit ain’t gonns happen .surely.

  • WalmleySteve says:

    Your speculation on how this is likely to pan out is very worrying. I must admit I had assumed that the sale of BIHL’s shareholding in BCFC was being done in tranches only to facilitate a re-listing of BIHL’s shares in the short-term, since BCFC is the only real asset it has and it would need to maintain a controlling interest in it to meet the requirements of relisting set by the HKSE. Once the shares are re-listed, then BIHL is effectively free to do what it wants with the club, and I had assumed that the remainder of its shareholding in BCFC would then be sold to the party who purchased the 24% stake. Why on earth would any party, Chinese or otherwise, want to buy a 24% stake in an English football club if was not with the intention of buying the remaining shareholding?

  • Tony Downing says:

    Dan ,Why is it Dan that Carson Yeung owes less than 30% ,that the other interested party cannot purchase the 70% INSTEAD OF THE 24% that is supposedly being offered for sale what i cannot understand is once shares become available on the open market that they cannot be purchased gaining a Majority Share?. Could you explain why Carson Yeung has such a hold on the Club when he is not the Majority Shareholder of the club whats stops the 70%from being sold from the other Shareholders?

  • Neil says:

    can he just appeal though?, – doesnt someone convicted have to have “grounds” for appeal? – ie some new evidence that wasnt heard in the trial? – im no lawyer but im pretty sure you do?

  • mark says:

    as before tiny steps…………there always speculation on what carson thinks………….no one knows

  • AF says:

    Hi Dan, remember me saying a few months back the only way forward a share issue if BIHL were to avoid administration. Looking forward the wage bill will be heavily reduced next season. I think that somehow the next stage has to be to find some funds to make us competitive for the 2014-2015 season.

  • Glen Johnson says:

    The fact is he can’t appeal on these charges if found guilty, as the law states no appeal can be requested, this is the same on Hong Kong

    • almajir says:


      Yes he can, and he has valid grounds to (the prosecution messing up not allowing him to see a document which proved his story)

      • sw16girl says:

        You may consider that to be the case (and I do as well from what I have seen) however he has to convince the judge who heard the case (and if he refuses leave then the appellate court) that that is the case. Depending on the circumstances they may say that is not significant and not sufficient grounds. If the judge who heard the case felt that it would be grounds for appeal then he would have had to have stopped the case and order a retrial (or similar at the time) the fact he did not suggests he does not consider it a ground of appeal. It should be something he will deal with in the judgement to try and make it appeal proof.

        On a related point do you know if the HK authorities have agreed to lift the freezing order so the scheme can go ahead as without that it will not happen anyway.

        • almajir says:

          Point one – with all due respect, without revealing my sources I would back myself on knowing more about what is happening out there. The fact is the prosecution nearly completely lost the case over one technicality which whilst the judge refused a permanent stay did note that it could come back in appeal.

          Point two – BIH have stated that it will go ahead if there are no objections received from the HK judiciary prior to the close of the EGM. So approval isn’t being sought; more they are forcing the HK Judiciary to make a move. It is my belief that they will not.

          • SW16girl says:

            I understand you have sources – All I can do is tell you as a judge what the standard position is – it would be extremely irregular and unusual to continue a trial if someone has automatic grounds for appeal – it would be more usual to order a retrial – I’m not saying you are wrong but I am setting out the standard position. There may be other forces at work which mean they wanted to carry on with the trial however you can never really second guess what will be ordered unless someone has the judge in their pocket and I assume you do not think that is the case here.

            I note the comment on point 2 and again this shows the difference between the UK and HK I suppose – in the UK if something is frozen it is frozen, and nothing more needs to be done to keep it that way. Presumably that is not the case in HK

          • almajir says:

            Provided there is no change in the material worth of the asset and the person who the order is against doesn’t benefit it shouldn’t be an issue.

          • SW16girl says:

            I would have thought a loan direct from the club was worth considerable more than a minority equity holding equity in a company with only the club as an asset and an uncertain financial base. Still it is the authorities call and they may consider that neither is actually worth anything much

  • mark says:

    EGM is positive if this happens, hopefully it will happen on the day said…….

    again to novate the debt is moving in the right direction……. they know they cannot rebellion their too much at stake for all of them imo

  • mark says:

    again Daniel no one know who this independent third party is who after the 24%………………it could anyone lets have a guess mainland china……….what percent can you put on that??/ 100%?/

  • DoctorD says:

    Dan – here’s a thought. If CY doesn’t get convicted, can the prosecution appeal as well?

    • almajir says:

      I don’t know – I think double jeopardy would come into play (can’t be tried for the same crime twice). I know that the length of a sentence can be appealed but I don’t think a not guilty verdict can be.

  • Atahualpa is a BlueNose says:

    It would be interesting to know if this mysterious group interested in purchasing close to a quarter of BCFC, are ‘mates’ of CY’s. I believe that would be an indicator as to whether they might develop an interest in increasing their stake in the future. Carson can try and set the agenda as much as he wants, he may have the reins taken away from him sooner than he might have anticipated, and then others will most definitely fill the breach.

  • Tony Downing says:

    Dan thanks for response,could you answer this question if someone purchased 100 % in BCFC(how would that be done) and if the only asset BIH has is BCFC or are there other assets ? if by holding the majority shares in Birmingham City what control would that give in BIH the scenario you paint is that whatever happens to CarsonYeung and even though he is not the Majority Shareholder nothing can be done to make him sell the Club we just limp on into the inevitable Administration

    • almajir says:

      If you bought 100% of bcfc that would give you the football club. It would give you no control of bih as bih is the parent of the football club – but that would be absolutely immaterial as you wouldn’t need BIH. I think you are a bit confused.

  • Frankie says:

    We are all grateful for the more than ‘layman’ synopsis.
    It isn’t a pretty picture or outlook though, with an appeal and subsequent further debacle and waste of court time there.
    Carson Yeung continues to try and ‘live his dream’, whilst we reap the nightmare !

  • bluenoseb says:

    So basically even if carson gets convicted he still wont do whats right for the good of the club and wants to drag us down with him for a further potential 3 years. Is the man deluded, i hope that the investment doesnt happen same as the shares getting relisted because i think this will be the only way he is forced to get rid of the club. Hes taking the piss out of blues in 3 years look at our demise from being an premiership team to not even a good mediocre championship team, if we have a further 3 years of this demise under these inept chancers way of running our club I think it goes without saying we will end up in league 1 over this time then whats he got to sell then. Delay no more and f*ck off!

    • DoctorD says:

      Bit harsh — if Big Eck had got 1 more point back in 2011 we’d be marvelling how wise CY was in steering the club to Cup success. The big problem has been CY being taken to court and the club losing income after relegation. Plus CY could have benefited from much firmer guidance from people who knew the club and English football. Sure we have been badly run, but so have many many other clubs in the land too. The huge amounts of money floating around the game is the divisive root of the problem for everyone.

      • bluenoseb says:

        Bit harsh is a bit of an overstatement doctor, 3months before we were relegated there was already suggestions we would have to sell no matter what division we were going to be in following season. And post relegation he could of and should of sold the club but for his own personal reasons hes chose not too. He cant take us forward only backwards as been proven Were ten years behind now were we was when he brought the club and longer he holds on the longer the demise will continue no doubt about that. So im sorry in the ifs and buts world ye maybe we would of been ok but in the bold reality world were in the shit and continuing our demise this is down to carson yeung and all that comes with him!

      • chris says:

        DoctorD, it was nowt to do with Yeung going to court, he could never have bankrolled the club for a £20 million loss by keeping most of the players, they were fire selling players after relegation before he was even arrested.

  • Paul Carter - The Voice Of Reason says:

    ‘It is my fear that Carson has no intention to sell the club’

    Dan I said this from day one.

    Carse still believes that there is a major financial ‘player’ out there in the China region who he can get into the club and convert us to one of the biggies.

  • sappy dsd says:

    if carson yeung is found guilty and refuses to sell his shares
    then the football league should force carson to sell his shares
    to the fans a bit at a time .whenever a fan offers to buy at hkse
    value …..kro.

    • chris says:

      you can’t force a director & shareholder to sell his shares, you can only bar him from being on the board of directors and even if you could he would just transfer them to family or colleagues.

  • Oldbluenose says:

    Almajir;, Is the reason that Carson Yueng will not sell us, is because B,I,H. only exists because of ownershp of B,C,F,C. ?.

    so if we are sold, B,I,H, ceases to exist, and C,Y. then has nothing, ??.

    • chris says:

      i would guess he wants between £40 million and £80 million of the money back that he and others bought the club for.
      only my guess, but i would say there are some very ‘tough’ people involved and ‘he has to’ get that money back.
      he has to get us back to the prem to do that and i feel he will stay forever till he does that or dies trying

  • Bluedad says:

    CY will do what is right for CY and his “business partners” he has reasons for not selling the club.
    Those reasons are still relevant for him and he has no interest in the footballing side of the business.
    So all supporters who stay away to hurt CY are only hurting themselves and our wonderful club.
    Survival is our only target for the next few years so lets try and pack st andrews, support the guys and have some enjoyment while we fight for our club.

  • Dodger says:

    I’m absolutely sick to the back teeth with this circus now I’m going to stop going and give my season ticket away if this goes on much longer . I really wish we would go into administration even go down if that’s what it takes to get rid of this Chinese plague.
    I don’t know how much longer I can keep right on :-(

  • chembo says:

    I’m no Carson fan far from it but surely the best case scenario is for Carson to be found not guilty.

  • mark says:

    Bloody hell some fans go on as if they are pulling teeth…

  • mark says:

    Put in our diary 5th Feb…….lets hope he gets approval……..

  • Peter bates says:

    Dan who actually owns bcfc because this gets more and more confusing if cy only has 20 odd percent of the club the who own the other 70 odd percent and why cant someone buy the 70 percent I am totally confused kro

    • almajir says:


      I’ve explained this about a zillion times but here we go again.

      BCFC is owned 100 per cent by Birmingham City PLC. Birmingham City PLC is owned 96.58% by Birmingham International Holdings and 3.42% by ordinary people (blues fans who bought shares originally).

      Carson owns 26% ish of BIH – not Birmingham City, but Birmingham International Holdings.

      The company, Birmingham International Holdings is selling 24% of BCFC, not itself. It owns near as damnit all of it so they can sell as much of it or as little of it as they want.

      For a breakdown of who owns Birmingham International Holdings, read this page.

  • bluenoserob says:

    Seems that CY is seeking investment purely to keep the club going for another season.this doesn’t have to mean investment in the team .I dread to think of another season or three of him leaching the life blood of our club.

  • Evesham blue says:

    The Doom has been going on for years since relegation. Yet still we exist and CY is still in charge. What makes you think anything will change? We start again next season with the remit of treading water with Voodoo Magic. Always been half a team we can loan in.

  • Steve Aerobic says:

    From the viewpoint of the fans we must therefore pray that he is found innocent and has his assetts released and combined with the new investor its all systems go!

    • chris says:

      i doubt he will invest his £60 million in blues, he’d be mad to do so.
      we may see a million or two, but things i beleive will not change that much.
      we will save on big earners meaning LC should be able to sign permanent players but i think they will still be limited to 5k to 10k a week but the majority will still have to be free’s or loans with maybe one or two for a small fee like caddis.
      at the end of the day we lost 9 mill last year and 10 mill two years ago and these debts will need repaying plus this £5 million loan now subject to the EGM.
      If i’m wrong Al may correct me.

  • Peter bates says:

    Thanks dan but you dont need to get on your high horse only asked a question sorry some of us bore you

    • Matt says:

      Jeez – drop the attitude, Dan is giving us a ridiculous amount of information- don’t shoot the messenger. Dan- thank you for continuing to explain honestly what is going on (hands-up – I am a layman!).

      Keep it up & KRO

    • almajir says:

      It wouldn’t bother me Peter if it wasn’t a question that hasn’t been answered many times already, where the information is on this site (and has been linked to several times before), and most of all where I have made it clear in the comments on the same article what is being purchased.

      You have to see it from my point of view Peter – how many times do I have to explain the same thing?

  • Peter bates says:

    I am also a layman thats why I asked the question kro

  • BigmanSteve0 says:

    Looks like the new owner process is starting..yippee

  • Eric says:

    I am skeptical about Far East owners based on the fact that, in this case, communication is not at the level that fans want or need. We depend on you Dan…that is not fair.

  • I smell a Russian interest and more, and media,
    strict qts?

  • honest says:

    3 sides of the ground are plastic and no life expectancy. Main stand well??
    No room for development and its small heath no fulham rd. Training ground owned by councill and it sucks.
    No squad value. No fans(ave 14000) some double that in the champ
    So many other clubs with far bigger fanbase and history to invest in KRO

  • andy says:

    Surely this has to be a little bit of good news. There is no sugar daddy out there wanting to buy Birmingham City, I am confident Carson wants to keep the club and therefore we should hope he is found not guilty of the charges against him and we can all move forward together.

  • Steve Aerobic says:


  • bluenoseneil says:

    I think we (collectively) as fans worry too much about the implications of this and that, rather than being fans.

    I grew up watching football and enjoying it immensely despite the off field issues that every club face at some point in their history.

    I have been a fan for 36 years of my life and I enjoyed beating Bristol Rovers on Tuesday as much as I enjoyed winning 1-0 against Fulham when I took my Dad for a hospitality day in the Jadper Carrott Suite to celebrate his 50th year since he’d first been to Stans as a boy.

    So what’s changed? For me nothing. I will go whether we are Premier League or Ryman Premier. I wish there were 29,000+ other fans like me that felt the same way. Our song is “we’re often partisan…” Not “well, if we can be arsed we will journey on but we only turn up when it suits us and we want champagne football every week with players of the highest quality being paid a fortune to kick a ball”. If you want that go to The Etihad.

    If you want stability and certainty go and invest in a sure thing.

    We love football because it’s unpredictable and exciting.

    Maybe Carson does too and maybe he doesn’t. I don’t really care enough to worry myself silly over it. Just turn up, be a fan, enjoy it when you can, hate it when you can’t, love it and live it.

    Leave the worrying to the judiciary system and the BIH/BCFC board. That’s what they are there for.

    KRO and thanks for the updates Dan!!!

  • StaffsBlue says:

    Couldn’t be arsed posting about all this financial stuff…. but your post is worth applauding neil. Nice one mate!

  • Aussiebrum says:

    Post capital raising, assuming success, the math might be quite interesting. 24% in the hands of a new shareholder would go close to giving this party absolute control if Carson is convicted and the freezing order ratified.

    Alternatively the if the two dissenting shareholders joined with the new shareholder they would be close to a majority.

    Above that – other shareholders might be convinced to rent out their shares for a new EGM. If the new shareholder could rent CY’s shares or a sufficient number of others, he could still control BIHL with a 24% holding and the fees involved in renting other shares. Add in Liu Xingcheng and Vico Hui siding with the new shareholder and the fireworks might commence.

  • Wingman Blue says:

    Carson reminds me of the monopoly player who’s seeing all his assets dribble away, but is determined to hang onto his one, Mayfair, card. He’ll try every desperate measure like selling his Get Out Of Jail Free cards (!) just to do another round of the board, but comes what may, he ain’t selling Mayfair!

  • brainchildblue says:

    My gratitude and massive Thank You to Peter Pandy for having fixed BIHLs problems after joining BIHL within 13th months and making sure Bcfc is still alive after we went out of money for the last 2.5 years. He also made sure csrson s debts are moved out so that the club is attractive for sale…He deserves more credit that we have given him. I was suspicion before too like some fans but now I am convinced we owe it to him so much …pannu is a star

  • What a mess . For all those pulling the strings behind the scenes,i say this. Our club is slowly being bought to its knees. We are being made a laughing stock of the football world. I don’t understand much of this equity/ stock exchange business but i say this. Get this sorted either way,patience can only stretch so far. This has gone on long enough. ! KRO. KEEP THE FAITH.

  • […] are increasingly desperate times for Birmingham with uncertainty surrounding chairman Carson Yeung and the club’s ongoing financial […]

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