Often Partisan

Another Day, Another Writ

Birmingham International Holdings have today confirmed in an announcement to the stock exchange that they are pursuing legal action against U-Continent Holdings for failing to disclose their relationship with Carson Yeung.

The announcement confirms that BIH have stripped U-Continent of their conversion notes by sending them a letter and are demanding the return of all converted shares.

Who the hell are U-Continent and what does this mean?

U-Continent are/were the second largest shareholder in BIH, with over 4billion shares in converted and unconverted formats. My friends at Blues Trust (and Mark Sutton in particular) have been keeping tabs on the ins and outs of share ownership and have written this piece recently which has the most updated numbers of shares owned by Carson and U-Continent.

Back in February 2014, U-Continent loaned BIH a sum of money against two tranches of convertible notes which ensured that BIH could continue running. The company was owned by a gentleman by the name of Yang Yuezhou, a Mainland Chinese property developer. However, in November of 2014, the company was sold on to Wang Lei, who is the younger brother of Carson’s common-law wife Wang Manli (aka Wang Lifei).

BIH are saying that they didn’t know when the transaction was originally taken out that it was done in concert with Carson (contrary to announcements made to the HKSE) and had they done so that they wouldn’t have gone through with it. By stripping out the conversion notes it means there are much fewer shares in circulation and in theory makes it easier to sell a stake in BIH. It also weakens Carson’s control over shares in BIH making it harder for him to oppose the sale of BCFC.

So this is great news?

Well, it would be – but we all know how slow the HK legal system is – and we know that Carson and his friends will put up a fight. I make this the fourth legal action between Carson and his friends on one side and BIH/EY on the other – all of which are going to cost both sides a lot of money and take up a lot of time. What we have is an absolute legal bunfight.

Because it’s not going to be resolved quickly, it means business as normal at the moment for the club – but it is yet another statement of intent from EY to remove the control Carson has on BIH/BCFC.

I emailed EY with two supplemental questions that I think need answering as for me this writ raises two points.

Firstly – on August 1 2013 it was confirmed to the HKSE that Victor Ma Shui-cheong was the one who introduced U-Continent to BIH – with Victor getting paid a HK$600k finders fee for the privilege. Victor is a former director of BIH, a current director of BCFC (as well as being Carson’s estranged brother-in-law) and as such I want to know from EY if he has to answer any questions on this. If he’s the one who introduced U-Continent, surely he knew that there were issues with them being linked to Carson?

Secondly – are EY going to take action against Carson with relation to the novation agreement which saw Carson’s 15million pound loan to BCFC moved to BIH and changed to a conversion bond? It’s well documented in the BCFC accounts that there was no paperwork for this loan and with the money supposedly not even coming from Carson’s accounts, there has to be an issue over where this money came from at all and if BCFC ever owed it to Carson.

I doubt I’ll get a response – but one thing is for sure… I’m sure neither Carson nor U-Continent will take this lying down.

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20 Responses to “Another Day, Another Writ”

  • Tony says:

    Chinese whispers

  • Tony E says:

    You may not get an answer from EY, but there is no harm in highlighting these issues, although I am sure they will already have taken note of them. No wonder the period of exclusively is two years, this lot might not be sorted even by then.

  • bluenose08 says:

    E&Y are doing a great job as far as I am concerned and I am sure there will be a lot more accusations and counter accusation to come. I am glad E&Y are on our side as they obviously know the legal system better than carson,pannu and their cronies. kro

  • atko says:

    Off topic, good to see Paul Caddis has extended his contract. The extension could keep him at Blues until 2018 & as he is only 27 it’s a good move by Blues to keep our hero from the end of the 2014 season although hopefully he won’t have to repeat such a feat any time soon! :)

  • DoctorD says:

    I’m still not sure why E&Y are suing Carson — I mean, surely he has no money to pay BIHL even if E&Y win as all his assets are frozen. Or am I missing something….

    • Psb2805 says:

      If he has no money then surely he is stripped of his assets, shares in BIH surely?

    • atko says:

      The article doesn’t state that E&Y are suing Carson, it states their legal action is against U-Continent for non disclosure of their relationship WITH Carson, DoctorD! There is an obvious difference even though it involves him.

    • almajir says:

      They’re suing U-Continent in this instance, not Carson.

      In the instance they’re suing Carson, they’ll be aware that not all of his assets have been frozen (as I’ve mentioned on OP before).

  • rhees says:

    This is all paving the way to the end game sale of the club
    I think

  • Micko says:

    I wish I was a lawyer in Hong Kong – I would be minting it …….. Is this yet more blues assets going to the “suits” ??

  • rhees says:

    According to a blues “I will die a blue nose” this German forward were linked with is playing tonight ?

  • ChrisG says:

    I can see it now……50 years time sky sports news makes an announcement that TTA have finally completed the purchase of BCFC after all the courtroom battles were finally sorted out, in the longest case in history the judge threw the case out as half of the accused were dead & the rest couldn’t remember why they were there!!!!!!!

  • Lee says:

    Also, wasn’t payments to pannu and Asia rays supposed to be being part of repayment for the 15m loan?

    • almajir says:

      They were, which was why they were taken off what we owed when the debt was novated.

  • Dave Mann says:

    That German player looks pretty tasty and that’s being laid back and not getting to exited ..wow!’ Kro

  • KC says:

    Sounds like we are missing the Tesche/Fabbrini creative dimension.

    • BhamCityJulian says:

      It looks like the Tesche transfer fee has been reallocated to Mpala. Well we do need someone else who can play the lone striker. Could his signing make Thomas available for sale? I’d expect there to be a few League 1 takers

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