Often Partisan

Carson Yeung, Great Luck and the Sale of BCFC

It’s been three weeks now since Carson was convicted of money laundering and as yet there has been no significant change to the ownership structure of Birmingham City – particularly with the deal to hive off 12% to Beijing Liangzhu failing. With this in mind and having read some of the stuff doing the rounds on social media I thought I would share with you some thoughts.

As ever, please remember I’m not a lawyer, accountant or stockbroker – just a layman trying to interpret data. I’ll cite facts where I can but where I’ve speculated I’ll be honest and I invite you to treat that speculation with the scepticism it deserves.

There has been a lot of rumour doing the rounds regarding what is going to happen but the truth is, I’m not sure anyone knows for sure. I’ve heard various stories from different sources – all credible stuff from people who I would think would know a thing or two but there is so much conflict and contradiction between these rumours I can’t work out what is actually happening and thus I think it’s pointless to repeat any of them. As much as I hope that a sale could happen soon I’m sceptical at the moment as to how soon it will happen until I see something more solid.

My hunch is that this all leads back to Carson Yeung in his cell in Stanley prison. As much as he is not supposed to be connected at all to the club barring his shareholding in BIH it’s my belief that his shareholding means he has some say in the takeover process. However, I don’t think it’s all him any more.

We know for a fact that he has been selling his shares in BIH that he holds via his Great Luck Management investment vehicle. What we don’t know is how – there is the assumption that all of his assets are currently restrained pending a confiscation order hearing on April 3.
I have spent the last few days thinking about this and I think I’ve come up with the answer.

From the latest copy of the restraint order I have, the shares in Birmingham International Holdings are held in an account with Kingston Securities Ltd and are included in the order. There is also a minus figure (HK$-52,280,641.05) showing on that account which would mean that Great Luck Management is also running something like a margin account with Kingston Securities which is in deficit at the time of the restraint order.

What I think has happened is this – I think that the amount owing has been called in by Kingston Securities and as Carson cannot pay that off (remember he is being sued elsewhere for debts owing) Kingston are using the shares in BIH as collateral and are selling them to pay off the debt. It would make sense to sell them a bit at a time so as to keep the price as high as possible and also because selling the whole lot in one go would mean major negotiations and announcements to the HKSE.

The reason that they could do that is that the money owing on the account dates to before the restraint order – as per the minus figure given – and so Kingston would have first call on the shares. That thought is also based on something we know – Carson’s home on Barker Road is specifically included in the restraint order but is also being sold by someone he owed money to (Wing Hang Bank) as they had first call on it due to him defaulting on a loan secured on the property prior to the restraint order being granted.

The upshot of this is the $64,000 question – who is calling the shots? If Carson’s shares are forcibly being sold for him to pay off a debt, then it’s clearly not Carson. There is a rumour doing the rounds in Hong Kong that people are lining up to strip Carson of his assets for debts they are owed – a rumour I obviously cannot corroborate. That in itself is worrying as it could be inferred that people believe the confiscation order is going to go through on April 3, regardless of any appeal against the conviction.

There is the further issue in that according to the Football League’s Owners and Directors test FAQ

All Clubs must publish on their website details of the owners (directly or indirectly, legally or beneficially) of 10% or more of the Club.

If Carson does not have control of his Great Luck Management shares – which is a stake of currently 10.40% (and thus about 10.77% of the club) – then have the FL been notified of that change?

What the big question is realistically is when the club will be sold. IF, and it’s a big if, Carson isn’t in control of the majority of his shares that decision may well have completely left his hands – which could be a good thing for the club as whoever has taken it may now make the commercial decision to get as much as they can for the club. I for one hope that is the case because if the club is sold then all of the circus surrounding Carson will become history and we can truly move on.

Talking Points sponsored by John Hicken Industrial roofing and cladding materials

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