Often Partisan

Statement of Intent – Pannu, Accounts and Investment.

With the playoffs now over for Blues I think it’s now the right time to talk about the financial situation and problems surrounding the club as there is no football left to be distracted. As always, please be aware that I’m not a trained accountant or lawyer; my opinion is solely my opinion and conjecture should not be relied upon.

As you may be aware, Mr Pannu made a statement that was published in the programme last night and is also published verbatim here on the Blues website. The salient points are that

  • “the consolidated accounts should be published very soon and in any event before the play-off final”
  • “not expect a very rosy picture on the accounts but again it is not as bad as people seem to portray it”
  • “I have been informed that once the accounts are finalised, an investor has been identified and it is likely further announcements will be made in Hong Kong”
  • “I have in my own ways impressed upon the members of the parent group’s board that should a suitable party came along, that they should give it serious consideration… My advice has been well received.”

On the face of it, the statement made by Mr Pannu is a very positive one. Whilst the accounts aren’t going to be brilliant nobody expects them to be and the sooner that they are published, the sooner the embargo against new registrations can be lifted and Blues can get back on with sorting out the squad for next season. News of potential investment is encouraging as is the talk that Mr Pannu has convinced the parent company that if someone comes in with a fair deal for the club that they should take it.

Of course, there will be cynics out there who will state that they don’t believe a word of it; Mr Pannu has some harsh critics in some quarters and I believe that there is a natural distrust from some for his words based on failure from BIH to release the accounts before previous deadlines. Unfortunately I don’t think any amount of putting forth reasoned arguments to these people is going to make them believe – until they see some sort of proof, such as the actual accounts they will remain sceptical. I’m sorry to say I can hardly blame them.

I think that care must be placed on reading the statement properly and understanding what is being said, what is being implied and what is not being said. To wit:

I have been informed that once the accounts are finalised, an investor has been identified and it is likely further announcements will be made in Hong Kong. As I am not on the board at the parent company, I am not aware of the finer details at this moment in time.

I think this is a very carefully worded paragraph, and there are some keywords that have to be emphasised. Firstly, Mr Pannu has been “informed” that an investor has been “identified”. Mr Pannu then continues by stating that he isn’t on the board of the parent company and thus isn’t privy to further details, for example that would have been discussed in board meetings.

In this instance, Mr Pannu is relaying a message – one that he implies he doesn’t know much about and that it could perhaps be insinuated that he doesn’t know anything about at all. Furthermore, what does “identified” an investor mean? Does it mean something like “we’ve spoken to a few people and we’ve found someone who may be interested in putting some money in”, or does it mean something like “we’ve made a list up of rich people and we’re going to pitch the club to them”? There is a world of difference between those statements and thus I don’t think we as Blues fans can put any hope on new money into the club until it materializes.

Likewise,

In the meantime, a club of our reputation, size, and may I now say, our achievements, would attract interest. I have in my own ways impressed upon the members of the parent group’s board that should a suitable party came along, that they should give it serious consideration. I have reiterated that we owe it to the fans to ensure that the vitality and the good name of the club should continue and I will do what it takes to ensure that it remains that way. My advice has been well received.

is a strange paragraph. To one person, it could mean Mr Pannu has told the BIH board in no uncertain terms that the time to sell up is now and that the BIH board have agreed. However, it could equally mean almost nothing at all – ie that Mr Pannu has said “you might want to think about selling if someone is stupid enough to take if off your hands” and the BIH board have said “definitely if they’re going to give us what we paid for it”. Once again, I would say it would be wise not to pin hopes on new owners just yet; I’ll believe the board are willing to sell when they start the machinations to do so – for example by appointing a firm to handle it for them.

In short, whilst I applaud the sentiment of the statement and the positivity of it, I think it’s something that Blues fans should treat with caution rather than unthinking agreement or scepticism. We won’t have to wait long to see if the promise re the accounts come true; I suspect in the next month or so we’ll see if there is to be any further investment or possible sale of the club.

One final thing I would say is whilst I’m preaching caution on this statement, I believe that there is hope. I was asked by the Birmingham Mail for comments on this and what I thought the future held in store – and I was honest enough to answer that I don’t know what the future has in store for us – I don’t think anyone knows. What I do know is that whatever happens, Blues fans have to roll with the punches and deal with it. I’m a firm believer that whilst there is a potential for pain in the short-term the fact is it’s not anything we’ve not done before – and if last night proved anything, Blues fans can suck it up and continue cheering their team. We’ll be alright.

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42 Responses to “Statement of Intent – Pannu, Accounts and Investment.”

  • andy says:

    The key is what CH does, if he stays it shows that he is being backed and has the tools to do his job. Iv always said the time to worry is if CH left because that means he hasnt the tools to do his job and shows lack of ambition. I cannot see a complete takeover at the club, mainly because Carson has put a lot of money in and no doubt would want to recoup most of it. Hopefully what Pannu is saying is true, and he should be applauded for working his socks off to find investment and stabilising the club.

  • bryn says:

    when can out transfer embargo be lifted?

  • Mickey07 says:

    Plain and simple mayor,let’s wait and see what happens?….as there past history and track record ain’t the best is it…..but one plus in all of this is Carson yeung grip on blues is deminishing……

  • Mark Peacock says:

    I hold my breath with anticipation for the accounts to be published but unfortunately now we are out of the playoffs I don’t think they will be published next week!

    If they are I might start believing words that come out of Mr Pannu’s mouth, until then I am still a bit wary of him.

    We have also been told the season tickets prices should be issued soon and they will be fair, Can’t wait to see what they believe is fair?

  • SuperBeau says:

    Great article almajir.
    Andy is spot on, Like last year when I sold my soul “I would sacrifice relegation if we won the League Cup”, I did it again this year “I would sacrifice promotion to hang on to CH and get the club sorted out”.
    Like all Blues fans I have really enjoyed this season – travelling to away games with real hope of a result and scoring goals has been fantastic let alone that European adventure that I never believed would happen.
    When you think statistically that this is the ‘worst season’ we have had for more than a decade from a league position point of view yet we had the highest gate since Chelsea (eventual champions) dropped in on Boxing Day 2009 last Wedbnesday and the vocal support CH and the team was just superb!
    One thing about Blues – never a dull moment,eh?

  • Cliff says:

    It does strike me as convenient this sudden apparent good news has been given to us as at the same time the club will be wanting some season ticket renewal money. Or maybe that is too cynical on my part.

    We have had a good season, the board have hindered not helped us again this season.

  • Wingman Blue says:

    Our longer term success relies upon finding new owners with money to spend. Whilst we are not a “big club”, nevertheless we always punch above our weight and the fans’ loyalty and commitment ensures that Stans is always a visit to be feared and undoubtedly an arena of passion.
    It is this passion that might yet hook us a new owner, one with the resources to help to rise to our aspirations – but only if we respond to the Carson shenanigans with discipline and composure. The Carson song may help frustrated fans get failure off their chest, but it won’t help our appeal to a future investor – would you want 5,000 abusing your name when things got tough?
    It’s going to be a rocky few months, but if we approach it with dignity and fortitude we will find new owners, ready to invest, of that I’m sure.
    Our best days are yet to come!

  • Atahualpa is a BlueNose says:

    Almajir has picked up the gist of PP’s statement and makes very important points regarding it.

    I do not believe that PP would, at this stage, attempt to delude us (yet again) by claiming that the accounts would be published before the play-off final, if he knew they were not. Obviously they were waiting to see if we were going to stay in the Championship and if the future projections concerning cashflow were accurate.

    It is interesting to note that he has said when discussing future investment into the club and preparing for contingencies, that “My advice has been well received”. I would take this to mean that he has informed BIHL of what will be required if they wish to remain as owners and what sort of finances need to be forthcoming. The problem that may have stopped investment in the first place, could have been CY trying to negotiate it all on his terms and not wanting to relinquish any power. Maybe the point has been driven home that unless he offers flexibility and partial relinquishment of the reins, no body will offer any sort of investment. CY will also have to be realistic about what the value of the club is in its present state.

    In the meantime, it is probable that Foster and perhaps Zigic will be sold to keep us ticking over. CH may not be giving clear signals on his statement of intent to stay, as he does not want a continually build-up and the break-up teams, and wishes to know what sort of budget is available for improving the team and whether he can keep hold of the players that are integral to any future success we wish to gain. Until the major players in our saga – CH, CY and PP have a clear future projection, it will all be open to hearsay and innuendo.

    NB. Almajir, what are the chances of CY striking a deal with the HK authorities before going to trial?? What would be the scenario if he agreed to pay the backdated taxes owed on the funds in his accounts?? He has been accused of money-laundering but only because it was not declared on his tax returns. The authorities will have a hard time trying to prove that they were from nefarious activities and will lean towards proving that he did not pay the full tax due. He has multiple interests and with gambling and gaming businesses – hard cash is obviously dealt with in large amounts. I have heard it being said that CY will obviously show that it is all his own money and the bone of contention will be what tax is due on the money. What do you reckon??

    • almajir says:

      NB. Almajir, what are the chances of CY striking a deal with the HK authorities before going to trial?? What would be the scenario if he agreed to pay the backdated taxes owed on the funds in his accounts?? He has been accused of money-laundering but only because it was not declared on his tax returns. The authorities will have a hard time trying to prove that they were from nefarious activities and will lean towards proving that he did not pay the full tax due. He has multiple interests and with gambling and gaming businesses – hard cash is obviously dealt with in large amounts. I have heard it being said that CY will obviously show that it is all his own money and the bone of contention will be what tax is due on the money. What do you reckon??

      Honest answer is that I don’t know. I guess a plea-bargain or similar is something that his legal team would possibly be considering but I have no idea a) if it would work or b) if CY would go for it.

      Carson is in court next month over his house and part of that hearing will clarify how the asset freeze order affects him. I await that one with interest because it might give us new information.

      • Atahualpa is a BlueNose says:

        Many thanks for that.

        Going on what PP said, it is alleged that CY would have given the funds to Blues if his assets had not been frozen to keep us solvent. But going on previous evidence and knowledge, were there not rumblings that BIHL were in trouble before this CY business came to the fore and they were scratching around to raise money?? Even without this happening, CY was finding it difficult to keep pumping in the millions required by a club of our size.

        You’re right, the hearing next month will indeed be interesting.

  • JohnnyZulu says:

    more spoke and mirrors from Pannu trying to make himself look good with the fans

  • JohnnyZulu says:

    “smoke”

  • Jay Sidney says:

    Cliff’s observations are very sobering indeed.

    Alright, then, let’s say “Three months down the road and who knows.?”

    However, Blues fans’ patience can’t last forever…

  • Paul Carter says:

    Gobbledygook, coporate bullshit call it whatever you like.

    Pannu has proven not to give a toss about us fans.

    Indeed why would he? Not a Blues fan is he and this is the first business he’s ever run.

    How my old heart breaks for BCFC

  • DJW says:

    Based on a telephone call re my share (single :-) in the club yesterday, I believe a takeover bid is imminent. Won’t know if good or bad until it develops further but something is definitely afoot.

  • Jay Sidney says:

    An important posting from DJW. Are you able to extrapolate?

    • DJW says:

      Unfortunately not other than a party is looking to gain 51% of the shares. No other details. Won’t be able to advise further as I need to sign a non disclosure. That said, if this is legit, and I’ve no reason to think it isn’t, anyone else who retains any shares should also be getting contacted. As mentioned I only havea single share that I never sold when Carson bought the club.

      • almajir says:

        as only 3.36% of shares in BCFC PLC are not in the hands of BIHL (source), I wonder how they’re going to achieve that.

  • DJW says:

    Havent a clue. Can only advise on what I know. Could be a scam I guess. Time will tell.

  • Macc lad says:

    Peter Pannu should be given due regards for the job he has done this season. Let’s just have a look at where we are, and compare that to a few clubs.
    We are apparently solvent, and have managed to operate without an extended overdraft for the majority of the season. This probably means that income is approximate to expenditure, IE we are being run at break even.
    This has probably been helped by the huge turnover of players, providing a big influx of funds coupled with a probable big reduction in wages.
    Despite this, Chris Hughton managed to gel the team, finish fourth and have good runs in both Europe and the FA cup.
    Portsmouth are in administration for the third time in ten years after a succession of owners and managers (Redknap is more than culpable here) chased unrealistic targets. We are not in administration, and if rumour is to believed are not close to it either.
    Rangers are on the point of being wound up after their last owner gambled other people’s money on being successful, and lost. The status of the club is in doubt, and they are likely to be excluded from European competition at least for the next 3 years.
    Whilst Europe is not likely to be a concern for us again in the near future, our owners used their own money to buy the club, not debentures raised on future ticket sales. Our future has not been mortgaged.
    In the lower leagues, lots of clubs remain under severe financial pressue, Port Vale springs to mind, but there are many more. Whilst our accounts are not likely to be healthy, the lack of action by HSBC in not calling in it’s debt seems to suggest that we are being run well, and they are happy with the situation.
    Leeds, Southampton, Crystal Palace. All of these have found administration recently, with differing end results. At least we are paying all of our debts at teh moment.
    Peter Pannu, to my mind, is responsible for all of this. he has kept us afloat by taking unpopular decisions without regard for his standing with the fans. He appointed Hughton, supported him in appointing his backroom staff of choice and even managed to find a small amount of money for a couple of players.
    Please try to give him the credit he deserves. I believe he really does have the best interests of the club at heart.

    • chris says:

      Macc, i mostly agree but,
      I believe HSBC not calling in the debt because they have the deeds to the stadium as collateral.
      You mention Southampton and this is where i think we maybe similar, i think it’s the holding company which may drag us down as Carson cannot move his money around to support / bale out / invest in his other businesses. Which is why Saints were docked points, as a club they were not in admin.
      I think as you say Blues are trading ok, all bills are paid, no-one is saying they are owed money and the tax man is not knocking on the door and infact was paid around Jan.
      For me the problem maybe the next three months without any income except season ticket sales.
      How are they paying players wages unless they have saved some of the transfer fees from Riggers & Jean to see us through till the August parachute payment of £8 million.
      Or sell Foster and Ziggy, but hopefully no-one else and maybe these sales may even give Chris some cash to spend or sign some good free’s on top championship wages.
      All conjecture i know, i’m sure we’ll find out very soon.

  • DoctorD says:

    Well said Macc lad – agree with everything you wrote. The main thing is that the business stays afloat – and PP has managed that with aplomb. We might be losing money but as long as cash is coming in we’ll be ok and hopefully move towards profit.

  • gibbo says:

    Mayor,,what do you make of Moxeys comments in this mornings mail

    • almajir says:

      I don’t agree with them in truth – I think it’s too early to call what is going to happen and maybe too much is being extrapolated from what was said at a press conference.

      I’m also aware that Mox was anti-Hughton when he was appointed – I’m not sure if he’s softened on that stance but I think it’s something to bear in mind.

  • Dirty Bertie says:

    Why did PP speak when he did? He hadn’t before and didn’t need to yet, unless it was simply to avoid a rough ride at the Blackpool match?

    If what he says is true (and I’m not aware of him having lied to anyone before) then the expected solution doesn’t rely on promotion cash or fire sales, more loans or make and mend in the Championship next year as the playoffs outcome was unknown when he said it.

    Also, CY’s home is due for repossession, he’s skint! (I know his assets are frozen but no civilised court would prevent you using your money to feed yourself and keep a roof over your head). He’ll be even more skint if he plea bargains and pays his taxes (unless he shops someone, which might land him in worse trouble).

    It all points to a buyout and as it seems unlikely that CY will find someone else in China to gamble yet more money it may be to someone we can more easily grab by the throat!!

    • Atahualpa is a BlueNose says:

      Bertie

      I think it’s a bit much to claim that CY is skint. The court did allow him an amount for his day to day living but instead of paying the mortgage he used the funds for other purposes – ostensibly to prop-up some part of his business empire. No doubt that he will argue that he needs more of his tangible assets to be released from the order in order for him to function.

      He is wealthy, but obviously not to the degree where he alone can fund a club of Blues’ size.

      So, Dirty one, cannot agree with you on that score.

      • Dirty Bertie says:

        Ok, skint’s a tad ott.

        I’d be interested in the origin amd meaning of your nom d plum

        • Atahualpa is a BlueNose says:

          Well DB, Atahualpa was was the last free emperor of the magnificent Inca empire which was based in South America. He was cruelly murdered by the Spanish conquistadors in the 16th century. He had given them a massive room full of gold in order to spare his life, but they took the gold and killed him anyway. The Inca were a stupendous civilization that did great things without the aid of the wheel, arch, writing or domesticated animals – well they only had llamas and alpacas.

          Atahualpa’s last burial place has been a mystery for the last 500 years but may have been discovered. There is an excavation which will take place this summer. If it really is his tomb, the treasures buried with him could rival King Tut’s in Egypt.

          As well as my love for my city and my club, I found the Incas absolutely fascinating and grew an insatiable appetite for knowing about their lives and times, and of course the Andes mountains where they originated from, is absolutely breath-taking (quite literally due to its position above sea level) and spectacular.

          I can honestly say without any hesitation that if he were alive today, then he would be living in Sheldon and supporting the mighty BCFC without any shadow of a doubt.

  • bluenoseneil says:

    Based on DJW’s comment (and a few other things I have heard recently) I wouldn’t be surprised if we didn’t have a serious offer – or two – on the table before the Euros.

    If I am reading between the lines of PP’s ambiguous programme statement correctly, then I could be putting 2 and 2 together properly. Then again, I could be making 7….

    As long as CH isn’t a Baggie in the next month, I don’t mind. The guy needs a medal for what he has done for this club in the last 12 months and I would like to think that he has enough professional integrity and will to succeed versus a willingness to expand his bank balance to stay.

  • Eric says:

    My main fear for Blues, aside from keeping CH, is the firesale of our young players. I am fine with Zigic and Foster going but the young guys partnered with the likes of Cauldwell, Murphy, Burke, Davies. King and Elliot can make next season a good one. We have to invest in youth – if they are sold now in a firesale we will not get near the money they will be worth in 3-5 years time.

  • Art Watson says:

    Regardles of the financial position it is imperative that CH continues to manage the team.

    If he leaves there will be many contenders but frankly none as good as him.

    This has to be the boards top priority.

    Art.

    • Art Watson says:

      What’s happened to the parachute payment-I thought it was there to enable a smooth transition from the premiership?

      • almajir says:

        Art

        The parachute payment is made so that clubs have a £24million black hole (£40million tv money wiped minus £16million in Parachute payment) rather than a £40million black hole.

        In short, that money was used to pay the bills. It’s not money that you get extra, it’s money instead of.

        • Bluenosejohn says:

          The income shortfall about not being in the Premier League ( as is the gain on income for Premier League promotion ) is always presented as though this is a compete gain. The bottom line is that clubs expenditure also goes through the roof in line with the income as amounts spent on wages and transfers will spiral. Some clubs have been smart and been able to reduce their expenditure once they come out of the Premier ( eg having contracts with reduction in wages for relegation ). Others have staked so much on continuing Premier league existence that they hit immediate financial problems ( eg borrowing based on future income such as season ticket sales would suddenly have a massive gulf between expectation and reality ).

  • Richard M says:

    Saw something in the press this morning that Hughton has demanded emergency talks with Pannu about finances. This has more than a ring of truth to it, and, if it is true, could also be a bit of good news. To me, this indicates that Hughton is willing to stay at Blues, but only if he can be assured that he will have money to invest next season – or in other words he would prefer to stay at Blues rather than move to the Baggies, as long as he has the right assurances. But he’s not dismissing the WBA job just yet (and to be honest who can blame him!)

    I think it’s absolutely critical Blues keep hold of Hughton. If he stays I reckon the vast majority of the squad would too. In theory, he would then have at least £7 million to play with from the sale of Foster and Davies, enough to buy in three quality players and give Blues a much better shot at automatic promotionnext year, especially with no European commitments to hinder us.

  • Bluehobba says:

    What has been mentioned all along was that CH has been informed of the financial situation of the club. What I found strange was PP to say “Finally just a note on our manager, he has done a wonderful job and I think I am right in thinking that all of us would wish to keep him here with us come what may”. I may be reading in to this wrong but was this due to the rumours going around of his departure, a vote of confidence or just that he wanted to share his with us that he knows Chris Hughton has over achieved his tasks set before him this season. Also MY first thoughts when i read about the investment was that this would be investment until the hearing in November rather than a takeover. I also assume that there will be an outcome in november. Again maybe I am way off the mark. Great article KRO

  • Bluenosejohn says:

    Loved the bit in Mr Pannu’s statement that ‘ I’ll certainly be joining you in your songs.’ Just imagine him singing along with the one about Carson!!


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