Often Partisan

Why is the takeover taking so long?

One question that I have been asked a lot of late is “what if?” What if Carson overturns his appeal? What if Blues pull off the impossible dream and gets promoted? What if Trillion Trophy Asia decide they don’t want to fund Birmingham City any more?

In some ways it is impossible to answer these questions. As Ernst and Young along with Trillion Trophy Asia have declined to make anything public since August 2015 with respect to the prospective takeover of Birmingham International Holdings and/or BCFC we’re left very much in the dark.

However, I think it is possible to understand just WHY the club and the holding company are at the impasse they are – and it’s with this in mind I’ve written this piece. I warn you in advance it’s going to be fairly long – so if you’re not interested in just why the takeover is taking so long and just what is so wrong with BIH, then look away now – or read the main link I have used for information right here.


On 28 August 2015, The Hon Justice Anthony Chan Kin-keung gave his judgement in a case in the Hong Kong High Court which affirmed Ernst and Young’s position as joint and several Receivers of BIH and set aside an application made by Carson Yeung to discharge the receivership order.

The Receivers were appointed due to BIH making an ex parte application to the High Court to be put into Receivership, which was granted by Deputy High Court Judge Wilson Chan on 16 February 2015.

At the time, BIH was in a complete mess. The board was fractured into two camps – one led by Victor Ma Shui Cheong which included Panos Pavlakis; the other led by Peter Pannu. Although Carson wasn’t on the board of BIH (due to his being convicted of money laundering), he still remained (and remains) the largest shareholder in the company.

Using the rights available to him as owner of 27.89% of BIH, he twice tried to force an EGM to depose those directors in the Ma faction, to be replaced by directors of his own choosing – including his de facto spouse Wang Manli, and his former bodyguard/driver Arjun Kumar Gurung. Carson’s brother-in-law, Wang Lei also tried to force an EGM to achieve the same ends via his ownership of 15.5% of the company.

The Ma faction considered their options, and at a board meeting unattended by Pannu and his faction, voted to apply to put BIH into Receivership.

Ernst and Young took quick action to steady the ship; the EGMs were quickly denied while those directors that didn’t resign from the board -including Pannu – were forcibly removed. Clearly unhappy with this, Carson upped the ante by applying to get the Receivers removed on 23 March 2015.

This is where the crap hit the fan.

Chan pulled no punches in his judgement, confirming Carson (and his legal team) were using every argument they could think of to get their way.

Despite having virtually no time to consider the arguments, Chan made the decision it would make sense to deal with the case sooner rather than later – and in his words:

…and decide on the existing evidence what is best for the Company and the shareholders as a whole without delay…

This was termed in his judgement as a “Forward-looking approach”.

Chan noted that BIH were in a “parlous state”, confirming that:

The trading of the Company’s shares has been suspended since 4 December 2014. It was brought about by a leak of inside information in respect of the Company by Pannu. It appears that the termination of Pannu’s appointments…was related to these matters.

We all know what caused that.

Then there was the suspected misappropriation of over HK$38million from the company. Former compliance officer Jerry Ko was named on this website as the man arrested by police on 20 January, with Chan noting in his judgement:

The suspected misappropriation of over HK$38 million belonging to the Company involves its former Financial Officer (“Ko”) who was later promoted to become the Corporate Accountant (head of Finance Department). Ko was working under the direct supervision of Pannu, according to information obtained by the Receivers from some former directors of the Company.

As Chan notes, the accounts for the financial year ending June 2014 were withdrawn due to reasons stated in a letter from the auditors to the BIH – also on 20 January.

Our position and decision to withdraw

We regret that despite continuous and repetitive requests to the Company’s Board of Directors for the return of signed letter of representation, directors’ declarations regarding their remuneration and the Company’s audited financial statements for the year ended 30 June 2014 for our completion, there had never been any response from the Company or the Board.”

Chan also notes the Receivers’ summary in their first report to the court something I have continually talked about – namely that the listing on the HKSE is worth more than the club. To wit:

“The main and substantial assets of the Company are the [Club] which is estimated to worth HK$360 million and the Company’s listing status … which is worth approximately HK$400 million.

BCFC weren’t in a good state at the time – and the Receivers confirmed that too, saying on 30 March 2015 that:

[The Club] can run till 31 May 2015. The 2015/2016 budget suggests that [the Club] needs HK$10 million a month. The cash on hand in Hong Kong is approximately HK$16 million as at 30 March 2015 which is not enough to support [the Club’s] 2015/2016 budget. The required amount is about HK$300 million (including HK$120 million for [the Club’s] operating budget and some large debts due to various parties).

If no investor can be found to provide such funding by 31 May 2015 to [the Club], [the Club] would be at serious risk of being put into administration, which would affect the value of [the Club] substantially and in the worst case scenario, the administrator will dispose of [the Club] on a liquidation basis and the listing status of the Company will be lost.

Therefore, it is the Receivers’ top priority to rescue [the Club] in order to maximize and protect the value of the Company and its assets which is in the interests of the shareholders. If the required funding cannot be obtained, say by mid-April 2015, the Receivers will have to consider the last resort which is to sell [the Club] as a going concern basis in order to protect the interests of the shareholders, subject to any such offer from interest parties.”

We all knew that the sale of the club was important – but I don’t think any of us knew things had been quite that bad at the time. To quote Chan’s judgement again:

Had this funding [from Trillion Trophy Asia] not been provided, the Club would almost certainly have been unable to operate in the 2015/2016 season, and the 10-point deduction might well have applied.

Interestingly, the judgement notes that the negotiations between TTA and BIH should be concluded in “early 2016”. It appears we are behind schedule.

Why was BIH in such a parlous state?

To quote Chan

The Receivers have, through investigating the affairs of the Company, uncovered a series of irregular contracts and transactions under which funds of the Company and BCFC were apparently misappropriated by Yeung and Pannu.

After taking legal advice, the Company and BCFC have commenced an action on 13 July 2015 in Hong Kong against Yeung and the two companies (owned and managed by Pannu and/or Yeung) which received the misappropriated assets of the Company and BCFC.

Add to this confirmation Ryan Yeung was paid HK$80,000 a month by BIH which works out a fairly handy £86K per annum – not too bad for a student who did nothing at BCFC. Ryan also got two bodyguards and drivers (a further HK$58k per month), a car and a house. No wonder Carson was suggested to be treating BIH as his “cash dispenser”.

Chan noted in his dismissal of Carson’s application that

The court does not lightly deprive a shareholder of his rights to nominate and vote for directors. However, unusual circumstances call for unusual action to be taken. Where the merits of the case so demand, the court does not shrink from acting with a firm hand.

Also considered was an application made by eight minority shareholders – Lyu Yobo, Luo Chaokui, Sha Tai Sheng (translit), Leung Ka Shun, Liu Qin (translit), Tsoi Yan Yee, Lee Anton Chung Man and Chuang Ngai Tin – that EY remain in place until the shares are relisted or a further order of court is made.

This application was granted – although the Receivers are seen to be expensive Chan saw what I think we all see here – that the company is/was making progress back to normality under proper management. The judgement confirmed that the date for the relisting of the shares to be was February 2016 – which has also not come to pass.


Since that court hearing, we’ve seen two sets of accounts – from Birmingham City PLC and BIH which have confirmed that BCFC has only managed to maintain operation due to the loans made to it from TTA via BIH.

However, much of what made up the parlous nature of the company has yet to be resolved; the legal action against Pannu and Carson for their management of the company is still outstanding as is the action against Wang Lei. No further progress has been made in light of the allegations with respect to the misappropriation of funds either; and it’s these factors that have delayed the relisting of shares… which has kept EY in place.

Although things have been great on the pitch I think it’s absolutely key now that BIH pursue resolution of these issues as quickly as possible as the current credit limit on the loan from TTA runs low – and I’m not going to lie, if TTA walk away I think the club is in real, real trouble.

The biggest personal fear I have is if Carson wins his appeal – as that wipes clear his barrier from being a director of the club or the holding company and will give him renewed confidence he can wrest back control of both.

It is most certainly interesting times.

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62 Responses to “Why is the takeover taking so long?”

  • paul says:


    great read and very interesting, but like most blues fans I think the way things are it looks like all avenues have been exhausted from both sides. my fear is the team will do well at the end of this season only to be brought down crashing if all goes Carson’s way. KRO

  • WalmleySteve says:

    In March 2015, the receivers described selling the club as a necessary last resort if they were unable to secure the necessary funding for it and BIH. If they are making no further progress on the outstanding legal cases and funding from TTA becomes exhausted, then won’t they have to sell the club rather than allow it to go into administration as the only way of achieving some value for BIH shareholders?

  • Paul Lester says:

    As always an excellent piece of work. I don’t think any other party has the information and insite you have in these affairs.
    The only trouble is that it does not make good reading as l think Carson will walk after the appeal, and l
    can see some very bad times ahead for the club and admin will almost certainly be the outcome
    Oh well its the weekend and l don’t have 50p for the gas meter!!!
    Good luck against the Wolves

  • Dan Hickman says:

    Even if Carson wins his appeal, the court appointed receivers would still need to be removed by the courts,mi I understand it correctly? If that’s the case, then the legal reasoning for his application to remove them being refused has nothing to do with his conviction, so surely it doesnt make a difference in that respect?

    Do you think the court cases etc are slowing this down, or are EY and TTA playing a long game, waiting for things to be teetering on the edge so the only viable option is to sell the club and somehow retain the listing?

    • almajir says:

      Dan – one of the chief reasons Carson was blocked was due to issues with regards to the OADT. If his appeal is upheld, those issues no longer exist and you’d bet your bottom dollar that would be in his appeal against this judgement.

      • Dan Hickman says:

        Okay mate, I thought it was to do with the way the club had been run. Notwithstanding that, hopefully with what has been dragged up in the time that the receivers have been in place would be enough to convince the courts that CY would not be in the best interests of the shareholders as a whole. The comments you quote certainly show how dimly the courts viewed his tenure at BIH.

        Just out of interest I went back and re read PP1’s comments and your replies. I had forgotten exactly how silly he had been! Also forgotten just how well you play d it all. Fair play Dan, not many people in the UK can say their actions have had such obvious consequences in the BIH boardroom

  • blueboi14 says:

    Excellent article. Thanks Dan.

  • ian says:

    having followed this saga for some time, my feeling is that administration this year is not the end of the world, the 10 point deduction could be taken on the chin,
    or do you really think promotion with this squad, and zero player investment is the way to go ?
    the hong kong influence would be ended once and for all. with prospective purchasers buying birmingham city fc, not BIHL
    nothing what so ever to do with preferred buyers, hong kong stock exchange, only the highest bidder for bcfc
    Carson cannot go away, because my gut feeling is that he owes a lot of money to his backers
    if Carson is released and returns what the hell changes ?
    for god sake stop buying season tickets, and merchandise, if you have a problem with rodents, the easiest way to get rid of them is to remove the food supply. BIHL only source of food is BCFC,
    blues recovered from the kumar era, blues will recover from this, and we are still in a better place than the mob in . B6

  • andy says:

    The biggest concern is that if the football club does not look like moving forward this coming summer then Gary Rowett will inevitably move on to pastures new

    • ChrisG says:

      Why will he andy?, he’s stated time after time that he’s in it for the long haul, he knows the financial situation more than most & will have certain assurances. Stop worrying about things that aren’t gonna happen. If you’ve read everything above you’ll see there are more pressing matters.

      • Mickey07 says:

        Make no bones about it if there’s no takeover rowett will be a goner mate he will not want to keep on doing what he’s doing every season without proper money,never mind that “in it for the long haul” nonsense he will be gone…

  • swissjonny says:

    Ian the Vile are not in a good place but the Randy Learner has proper money and is straight.They will also get a huge parachute payment so they will sadly be OK for a few years. CY should get off-the case against him and the law that was in place at the time was unfair.Fact. Now CY is exactly the kind of guy that China is gunning for right now.Yes HK is a special administrative region etc but the influence of China is real and growing.I really believe its 60-40 in his favour.If he does get off he will have money.What he chooses to do with it….your guess is as good as mine mate. One thing is for certain he will want face back.Im not sure that that will be good for us. KRO

  • Oldbluenose says:

    As our club has been doing so well with limited resources, One tends to forget the HK,/ BIh, problems that will not go away,?. Though always at the back of one’s mind, we tend to do [ as true supporters do ] concentrate on events on the field and within the club itself and marvel at our progress under G,r, + Pavlos, as such,!!. it would make an astonishing ” end-of season ” for us if we could achieve the play-off’s.

    Thank you Daniel for clarifying and refreshing events as they actually are.

  • Jaffa says:

    Worrying times Dan.Still at a dead end with that nightmare Carson.If we don’t get promoted then could it be that administration is a good option. But i do hope for a better ending.I still can’t forgive Gold and sullivan for selling our club to these Crooks.

  • faraz akbar says:

    why cant FA get involved
    is there any way the FA can help some way

  • KRO forever says:

    Can someone please clarify my confusion.

    1. If Carson does get off and take control at BCFC again, why would he let us go into administration.
    Would admin. mean selling BCFC to the highest bidder, and delisting BIHL from the HKSE ?

    2. Would Carson and his cronies dare to show their faces again at St.Andrews ?

    3. If he does take control again, surely that would be the time to boycott season tickets and merchandise, not now when the set up at St. Andrews is the best for a few years. Surely the well running of the club, only helps E&Y case against Carson and his motley crew.

    SOTV and KRO

    • almajir says:

      1) Not sure I understand your question – the first part isn’t the necessary cause of the second. But yes, if BIH went into admin they’d flog the club to the highest bidder surely.

      2) I don’t think they give a monkeys what people think about them tbh.

      3) Huge ifs… not even worth thinking about tbh

  • ian ambrose says:

    Where they was 7 bidder take over at Birmingham City FC ????? HMM erm mmm…

  • Surely CY will still not pass a fit and proper test after going to prison , for having money going missing , for having to many holes in the big cheese which Is not good for the share holders , he may get away with something’s but not everything,….. good reading Dan

  • ian says:

    i seem to recall we had parachute payments, so stating villa are better off, entirely depends how the parachute payment is used,
    there are half a dozen clubs in our league who have parachute payments to play with, it does not necessarily mean promotion,
    the point i am making is regardless how carson gets on, if he chooses to return, we as blues fans have the interest of our club, Yeung like all other owners will come and go. he is not here because he loves blues, truth be told, he probably knows very little about football, sadly blues were his vehicle to get a listing on the stock exchange
    if he decides to reinvest in blues and lets face it, it is the only realistic chance to recover his money by selling a premier league club, so realistically he has no option but to reinvest, we as supporters could and should make him fully aware that if he were to reinstate the likes of pannu and his driver, and any other distant relative, we as fans have the power to stop the money flow. and the only way to do that is cut all financial input.
    even if he beats his current charges, there are many more unforgivable goings on at BIHL
    yes it is drastic, but desperate times call for desperate measures.
    it might make me a crap fan, but i won’t give them another penny until we have new owners,
    and yes i did go down when the kumars owned us, and the average gate was 3000.
    in hindsight, had those 3000 not gone to games the kumars would have left sooner.

    • AdamTrueBlue says:

      All well and good talking about boycotting the club to starve CY out, what then happens to Gr, Panos, the players, u21’s, development squd, wast hills, blues ladies, the coaches and backroom staff etc, are we to starve them all?

      • Dave Mann says:

        Some fans don’t think that far Adam so it’s not worth even trying to tell them , one dimensional and kidding themselves out of going down , excuses after excuses , not my problem and I thank my love and respect for all concerned that I don’t think the same way , blessed and honoured . KRO

    • Shirley Blue says:

      You are just talking total crap. For a start the average gate never went down to anything like 3,000. Boycotting is just another excuse for can’t be arsed to make the effort to support the team and keeping your money in your pocket. TBH people who don’t attend and use boycotting as a reason can f&ck off to the Villa for all the use you are to our club.

      • Bluey says:

        That`s very unfair. Loads of people don`t go on principle. You may disagree with this approach but don`t be so dismissive. Yes there are people out there who have the courage of their convictions.

  • Dave Mann says:

    The average gate under the Kumars was 12,000 Ian and if you went down when they were in charge then why not now ? .. Your money is your concern but it ain’t gonna make any difference to what happens to Blues now or in the future , just a thought mate . KRO

    • ChrisG says:

      Never fails to amaze me Dave that people still think that it’s THEIR £20 a home game that is keeping the club afloat!!!

      • Shirley Blue says:

        You may have a point for a club p in the Premier League but income from match attendances must be at least 50% of our club’s annual turnover so not sure where you are really going with that comment.

        • ChrisG says:

          Really?, more like 5% mate

          • Shirley Blue says:

            In the Championship? The TV money isn’t that great so where is the rest coming from then? Do you know something the rest of us don’t. I reckon we get about £7m from gate money. We don’t get anything like that from Sky.

        • almajir says:

          Shirley – check the accounts. Ticket receipts are 19% of revenue (£4mil of £21mil overall). We get £12mil from broadcasting…

          • Shirley Blue says:

            Thanks Dan. I should have looked at the accounts I guess. £4m seems very low. We average c17,000 so 23 League games is 391,000 total attendance which is an average price per person of just over £10. That doesn’t take into account attendances for cup games and friendlies. Even taking into account concessions for oap’s and kids I would have thought it would be higher. Must be a lot of discounted tickets I guess.

          • almajir says:

            Season tickets are pretty reasonable and allows you to watch most games for a fairly low price, lots of concession and free STs too.

            It was ever thus, since the big money came into TV matchday receipts are a much smaller proportion of income.

  • Little Al says:

    Even if Yeung overturns his conviction for money laundering does he still not face further charges regarding the misappropriation of assets/funds from BIH/BCFC, the whole cycle starts again. Surely Ernst Young have all avenues covered, well lets hope so.

    This whole saga does not seem to be coming to any conclusion in the near future.Lets hope Blues can cheer us all up by bagging three points on Sunday.

  • AdamTrueBlue says:

    Finish top 6 and miss promotion, go into administration, lose the HK listing, best thing that could happen to us, we would be free of the vermin and open to the highest bidder. I feel a bit of pain approaching before the good times arrive. They could do a soap opera about blues. Kro

    • ChrisG says:

      Adam Adam Adam, it wouldn’t matter where we finished in the league if we went into administration we would still have 10 points deducted this season & probably 10 points from the start of next season, so how the hell could that be the best thing to happen?

      • AdamTrueBlue says:

        Of course it matters, if we were towards the bottom of the table 10 points could relegate us and that would be the last thing I would want, if we get promoted then CY shares will be worth a lot more and make it harder to be rid of him.

  • Dave Mann says:

    Is there not a series called Blueblood , sums us up mate . KRO

  • StevieW says:

    A nice piece Dan, and it does raise some really good questions, like what will happen if TTA do pull out? do we lose the ground if they are wanting their money back? Is administration better than being sold on in a panic sale to raise funds to pay those we owe?

    I would assume that the lack of movement and information is that EY are waiting for the legal stuff to start in the courts. Keeping ones powder dry so to speak.

  • eric says:

    BCFC and their fans like me are very lucky to have you there Dan. You are the provider of wonderful information given with fairness and objectivity. Without you bluenoses would be kept ignorant. Thank you so much…KRO

  • AF says:

    Dan, I think we have seen fan power in action at Liverpool and Villa recently and it has been successful to an extent. So if CY does walk back into St Andrews I think the only course of action for supporters is to boycott en masse.

    • almajir says:

      Liverpool – I’d agree to some extent
      V*lla – where have their fans been successful?

      I’ll tell you now that it’s my personal belief that as many as 60% of Blues fans wouldn’t care re Carson coming back. Honestly.

      • AF says:

        Dan, I think you are underestimating the Blues fans strength of feeling re CY. I believe along with PP there has never been a more hated figure at St Andrews. A man through his power games has almost ruined the club.

        • almajir says:

          I don’t think I am AF.

          I hate saying this – but many just don’t care. Sure, they sing a song making a crude reference but if he turned up with a few million to spend they’d forget all about that. Football is fickle.

          • Bluey says:

            If fans were that bothered about CY they would have done more than they have, whether that`s demos,mass walkouts,boycotts etc. I made a prediction months ago that Yeung will be back in situ eventually and we`d better get used to it.I`ve not seen or heard anything to change my mind.Sadly.

  • ian says:

    Dave, i don’t go because i have better things to do,it seems to me that the manager has worked a minor miracle with a bunch of free transfers, which is great, and once an owner who gives a toss about bcfc, i might go down again, to be honest the football and atmosphere at st andrews bores me to death, under brucie i remember us being out sung by Reading, never would have happened in the 70’s i read on here that we play counter attacking football, so did villa, but if every year you sell your best players, like villa you become less and less able to preform as a team,
    thank god we don’t have to sell our best players every year, oh hang on a minute.
    yes i am a crap fan, one of the missing 22000 who used to go down in the 70’s where 40000 happened every now and then,
    am i entitled to an opinion, who cares, and until blues play the football i want to see with owners who care about the club, i will continue to do other things.
    as for the financial meltdown, and its impact, do you think having the ground as security to a trillion trophy loan is a viable option ? and that is the whole point of the boycott, then admin, then sold within weeks to viable new owners as is done in other businesses week in week out,
    just my opinion,
    same as it was blues fans opinion to riot last game of the season to remove sullivan and gold,
    how many geniuses on here took part ?
    yes i was there, and yes it did confirm to me just how thick many, many blues fans are
    How’s it working out ?

    • Dave Mann says:

      If you have better things to do with your time Ian then that’s your problem and with opinions and ex fans like yourself not bothering to go then the club is better off with out you anyway , How’s your time working out ? KRO

    • Bluey says:

      I have met so many like you and it`s hard to disagree with much of what you`re saying. Some fans have simply had enough of the crap behind the scenes and i think they`ve lost interest. Many thousands have stopped going and i can see crowds dipping further next year if we start the season poorly. I can`t condemn you,it`s all down to ongoing frustration.

  • Lighten up Ian , Dave’s only trying to better things at the club , I think the other Dave’s would have gone at some time any way for another challenge in life ….

  • nicko says:

    look do you think Adidas would sponsor us if they thought we were going in to administration. ian that is your opinion true blues fans stay loyal i have been there like you but i love my blues i have seen the kumars weldon all they wanted was the money gold and Sullivan did a great job till Sullivan opened his mouth and said i am not giving my kids money to this club.that is when the fans turned young will disappear soon fingers crossed kro

  • Mitchell says:

    Whichever angle you look at our situation- the stand alone factor is that should TTA funding cease or hit a precariously low in terms of next season then our fate would be in the hands of CY. should he walk free. I am of the belief that Daniels 60% of fans would accept CY return is about right. TTA would be in for a torrid time against the CY regime and the choice between possible administration or CY rescue would be a no brainier. Imo the case against CY is crumbling by the dayl

  • Mitchell says:

    Following on briefly to earlier comment is that TTA and E&Y imo never imagined CY would be in such a situation where his freedom is very much alive.

  • swissjonny says:

    I think your right Mitchell. Yeungs freedom was not an issue at this time.A number of convictions are going to be overturned in HK because the law was unjust and unfair.This relooking at the law and therefore several high profile convictions was not on the radar. If Yeung does get off he will have money.He did not drag any of his mates into the fray and I suspect that that will be rewarded. Handsomely. Interesting to note though that the takings at all of the Casinos in Macau have decreased dramatically with the Chinese crackdown on bungs and any irregular payments. So perhaps what was seen as an easy source of funding may not be as fertile.

  • ian says:

    i’m not addicted to bcfc anymore, i’m not 18, i’d rather watch my grandkids play football than 22 over paid professionals who can’t pass the ball to a player in the same colour shirt,
    this forum is OP, not the Dave show,
    big deal you go home and away, never miss a game you are the bestest fan in the whole of the world,
    perhaps you know even more than rowett,
    or perhaps you are one of the knuckle draggers who used to sing about muamba being a refugee or o’connors sexual habits, brilliant fans, just what the club needs x

  • Dave Mann says:

    I never rubbish , boo or abuse any player when wearing a Blues shirt and I would urge you to remember that Ian me old mate ok…. I support my family , my work and my football club and have an absolute wonderful life doing all those things , Ime no knuckle dragger or one of those thickos you keep calling Blues fans , I woukd also urge you to remember that also , you don’t know me and my life so mind your own , if your happy with what you do and the grand kids are great then Ime happy for you but don’t slag others off with silly abusive comments ok . KRO

  • duch says:

    The thing I still don’t get Dan, is why did he pay £80m for the club when he could have got it for £40m as was valuation, when the previous owners were looking to sell?

  • Calm down lads it doesn’t start to 1 : 15. …

  • Graham says:

    End game in sight, great news

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