Often Partisan

A Critical Time

Without wanting to use a dreadful pun, the Chinese whispers following Peter Pannu’s programme notes last week have spread far and wide. Speculation over potential investors, new owners and what might happen to Blues has filled pages on messageboards, forums and various forms of social media.

Before it’s even asked, I know nothing specific of any new money to come into Blues. There has been talk for months of people ready to step into the breach to take the club on but so far it’s just talk – whether it is shadowy figures in the background waiting for the right moment to buy Blues or hubristic ambitions of people who want the incumbents out I don’t know.

However, I do think that time might be running out for the current board. Mr Pannu confirmed in his programme notes that Carson’s current legal problems are causing problems with relation to Birmingham City as Carson cannot fund Blues in the manner that he has previously, effectively forcing the club to be more self-sufficient as they can’t rely on infusions of cash from Hong Kong.

Even if the accounts come through as promised this week, I think there are some key issues that will come to a head within the next month. Carson is due back in court on 4 June with respect to a civil case brought by Wing Hang bank due to Carson defaulting on a loan secured against his property on Barker Road in Hong Kong. It’s not as simple as the bank repossessing the property either due to the assets freeze order made against Carson.

What is interesting is that the asset freeze order was made against Carson, his ex-wife Li Wing-Sze and a company called Success Orient Investment Ltd – which curiously enough is the company used to buy the property on Barker Road in 2005. What that says to me is that the HK Government have connected that property with the accusations made against Carson Yeung.

With this in mind during the previous hearing with respect to the repossession order the judge presiding asked for further details with respect to the assets freeze order – I’m guessing so it’s clarified if the bank can successfully repossess the house (should they win) or if it’s untouchable because of the order. Now, if Carson loses that case, and the bank aren’t allowed to repossess his house, do you think they’re going to give up on the fifteen million quid that Carson owes them? Or is it possible that they might go for something else that is valuable that Carson has a stake in … like BCFC? I don’t know if they would go for that; I don’t even know if the bank could legally try to do that and even if they could I suspect it would be something else dragged through the courts – but it’s a possibility that it could happen and is a reason why I will be watching that court case to see what happens.

Carson made a huge gamble on Blues going back up that hasn’t paid off. However, the club itself is in a half-decent shape (even if BIH aren’t) and there is a chance he could recoup some of his money (and that of those people who have backed him) by putting BCFC up for sale. In my mind the board of BIH have to make a decision now. They have to back the manager as best as they can – financially with money and by other means to ensure that Blues won’t be further affected by embargoes etc. If that’s not possible then it is time for them to throw their hand in and take what they can as they leave the table. Failure to do so could see them losing their shirts and Blues fans suffering more heartache over the next few months.

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20 Responses to “A Critical Time”

  • Masaccio says:

    The only thing weknow with some level of certainty is that the blues are ticking along nicely, we’re not over spending and cash is coming through the turnstiles and club shop – a season with far more home games than usual has helped to swell the coffers no doubt. I think CY and gang must realise they can;t recoup 100% of their investment, but they nust have taken cash out of the club previously when it was available? A great article Mr. A and it will be interesting to see what transpires…..

    • Smokin says:

      Fed up with how everyone thinks that CY took cash from the club…. no he did not. It is the other way round. As for the article, I fear for Almijar and his sanity if we are too have a summer of articles based on rumours and speculation on ill-informed internet sites. I really do suggest a holiday would be better :)

      A quick point: if the Courts find that CY could not pay his mortgage because of the asset freeze (but believe that payments would have been made if the asset freeze was not in place) they are very unlikely to let the bank get their money at this stage through other assets, as to do so would be unfair (fairness being something the law is generally keen on!).

      • almajir says:

        That is indeed Carson’s defence in the case.

      • chris says:

        does that (fairness) include chinese law though?
        i agree with the holiday though.
        i normally enjoy the summer without any football (time for cricket, hols and days out) but i think blues news / rumours will drag on and on.
        i will though believe it when i see it concerning new investment, Pannu said a week didn’t he so three days to go.

  • Matt says:

    Great article, as ever.

    I honestly think that us not going up is for the best. This way we really get to see what is going on with the club, the “unknown” is always worse than the knowledge of what’s going on. I’d far rather go up to the Premiership knowing we were in good financial order and not that we’d thrown our last chip on the table and gotten lucky to bail us out of trouble. I have sincere issues with the people behind the scenes financially managing the club I care for in that way, and would have even greater worries about those types of gamblers (for want of a better word) getting their hands on countless millions of SKY tv revenue which will may be subject to further questionable fiscal frittering-away-of.

    I think for the best of the club we’d have a more solid long-term future if we had a more open financial disclosure, with these owners or some new ones.

    We had one hell of a year and if Europe was the price of not going up to the top table and that, in turn leads to us getting our house in order, it’s not a bad price to pay. We’ll always have the European experience, the Premiership will still be there next year, hopefully with our house in order.

  • Paul Carter says:

    After the Blackpool game I mailed the FA asking them to take a look at the Birmingham situation re ownership/funding/embargo etc…I alluded to the fact that their FAPP test was fatally flawed as it is an investigation of the person not the cash flow and that potentially we as a club could be owned by a 3rd party by legal default on the other side of the world.

    I pointed out that as a member club the association has a duty to protect the game in general and important lessons could be learned from the Birmingham case.

    I await their reply.

    • almajir says:

      You’ll be lucky to get one Paul – I think we’ve seen the evidence with the situations at Portsmouth, Coventry and the like that the league are quite laissez-faire about this sort of thing

  • Atahualpa is a BlueNose says:

    Almajir,

    I know it sounds rather far-fetched and incredulous, but do you think it may have been a deliberate ‘tactic’ of CY’s and his legal team’s to not meet the loan repayments in order to try and prove that the freeze order in its entirety was unjustified, and that they need increased amounts of hard cash from his businesses in order to function??

    If the judge at the previous hearing had asked for more details and information, they (CY’s team) could have forseen this would happen and tried to interpret this as an opportunity to make the case that CY as a wealthy businessman with a varied interest portfolio, needs more of his assets to meet the costs of his day to day living??

    I know I may be a million or even a billion miles off the mark, but the higher the risk-taking the higher the gain. With CY, if anything, he has proven he is not risk averse. The problem with Blues is not in meeting its day to day costs, it could be where the club is is liable to meet large bills such as instalments from previous transfer fees which might be in the region of million(s) of pounds. I do not know what the liabilities are but it is certain that a shortfall of £24m from revenues will dent any budget.

    The guarantor – CY – cannot do it for us now and nobody from BIHL seem to want to fill the void. If they do, the terms are not conducive to CY and that is why PP mentioned that he would impress upon the board of BIHL that the club’s interests needed to be prioritised.

    Like you’ve said, the time has really come for something to give and so we need to determine what our position is and what sort of future we can all start planning for. We really are on the cusp of change. Whether it is an upward one, we really do need to know….

  • mitchell says:

    We are now down to the final few days on what will be an interesting Summer.

    Pannu stated the accounts should be released before the play off final; going on past experience this still doesn’t bode well. However, by not releasing these figures he will give himself a lot of rope – he’e been called a lot of things over the last 12 months but I don’t beleive a further delay will happen. Pannu is well aware for all CH’s loyalyty, he will expect to be told what he needs to do this week, so as a plan is in place for another campaign. If the accounts are delayed yet again CH won’t stand for it.

    Persoanlly, my glass is still half full. I would expect the accounts to be make fairly grim reading, but if we can off-load Foster ( the vultures can circle all they like but any less than 5/6 mill should be rejected) and possibly Zigic ( took a lot of stick this year; we always be a hero in my eyes; winner against the vile, wembley goal and a fantastic display against Leeds with a four goal haul) and some cash for CH – 3/4 million would be ample for him.

    It has been a fantastic season but I truly beleive with a few quid to spend we could have an even better 2012/2013.

    KRO

    • Blue Steve says:

      I think it will be a tough job to offload Zigic. Who will be willing to pay him 60k a week? If someone is they most definitely won’t pay a fee alongside those wages. However I do agree we need to at least try to offload him. I understand that he also has a further 2 years remaining on his contract! I have not problem with Zigic he tries his best scores a few goals and is totally committed. However he is a luxury (for the amount we pay him) we simply can not afford. KRO…

  • NooBloo says:

    i total despair. A 7 paragraph article full of speculation, duplication and bordering on fabrication . There is nothing factual here to comment on.

    Come on folks lets lighten up at the end of a good year and have a laugh at the amount of money we got paid for average players.

    The amount of compensation Villa paid to us plus what they are going to have to pay McLeish when they sack him later today

    And finally the compensation they will prrobably have to pay Norwich for Paul Lambert.

    Randy lerner has spent more on compensation for managers than his fellow Americans have spent looking for the Loch Ness Monster in the last 200 years

  • Mark Y says:

    I agree with Smokin about peoples attitude to CY with regard to him withdrawing cash from the club. Whatever you say about CY he forked out a load of dosh personally including a remortgage to finance big wages and transfer fees. I know it was a waste of money but Hleb cost about 75k a week then you look at the cost of others like Zigic, Martins, Bentley. He also tried to sign Dembele and Nzogbia. At the moment I feel that HSBC’s debenture over the clubs assets along with their unwillingness to offer an overdraft are probably protecting the club from taking on more debt. Atahualpa makes a good point about club liabilities on earlier transfers and we don’t know what they are, therefore, day to day cash flow is a concern. This season has been a “good earner” for the club with the Europa, FA Cup and play offs games along with the sales of Ridgewell and Beasejour, but, next season will be a lot different and that’s why I fear a player exodus this summer of saleable assets. One positive about CY having his assets frozen has meant that he never had the opportunity to asset strip the club in order to improve his personal financial situation. However, on the flip side, is it a disincentive for him to sell if he can’t get his hands on the cash whilst the asset freeze is in place. The whole saga regarding the delayed accounts seems very mysterious and the reasons for the delay appear to me to be a load of “bull”. I think there is some other motivation behind the delay which we are not aware of. The companies shares are currently suspended on the Hong Kong stockmarket and I wonder that when the accounts are released that this will possibly lead to a lift the suspension of trading. If the shares are traded on the market they could fall in value dramatically and then this may lead to someone buying in at rock bottom prices. I would welcome any feedback Ajamajir has about the position regarding BIH’s share suspension.

    • almajir says:

      HKSE has imposed certain conditions upon BIH before it will allow the shares to be relisted. These are outlined here and are essentially to inform the market of material information,
      to publish outstanding financial results and address any auditors’ concern and to demonstrate there are no significant internal control deficiencies or management integrity concern.

      As of the last update from the HKSE (11 May 2012), they are awaiting BIH to address the outstanding issues.

  • andy says:

    £80 MILLION to buy Birmingham City in the first place, ripped off by David Sullivan big time, and then £17 MILLION out of his own pocket to finance the transfer fees and wages during Blues relegation season. Is Carson going to give up the club easily? If his hand is forced to sell at a massive loss, which that would have to be the case, then Carson has ploughed and threw away millions into the football club.

  • Arthur says:

    I thank God for the players that McLeish has bought us because without them we would not have been in the play offs and our ticket revenue would have been much lower. I believe there is no smoke without fire in all of this and think many of you fellow blues fans are dillusional. Chris Hughton cannot wait to leave its obvious the finances are dreadful (and before you all say thats BS – CH is not going to publicly come out and speak his feelings).

    • Euston 9.18 says:

      Day~Release ??

      • almajir says:

        Judging by the amount of different names he’s used, and the consistency of his feelings vis a vis Blues, I think he’s either a) miserable or b) a villa fan on the windup.

    • John says:

      Chris Hughton made the players that Mcleish bought,into proper footballers. He showed them how to play attacking,atractive football. Most of all,he did this with humility and gave us all a season to remember and be proud of. I believe “Arthurs’ cup is always half empty and he needs to cheer up! KRO

  • Dirty Bertie says:

    CH to WBA, Terry Connor to Vile, McGingernut returns to complete the job – sorted.

  • bluenose08 says:

    Yes i like many others are waiting for the accounts to be published and then we can start moving forward towards next season. The news i most want to here is that ch is staying along with our best players. Lets get what we can for ziggy and save his wages. The sooner ch can prepare for next season the better as obviously there will be players leaving that will need to be replaced.
    k.r.o.


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