Often Partisan

Questions, Questions

With the news that Carson has had his appeal for the partial thawing of his assets dismissed, there have been questions from fans as to what this means for the club.

On the face of it, nothing has changed as the status quo remains – Carson’s assets are frozen and he can’t infuse any money into the club – much the way it has been since last July.

However, I think it raises more questions about Carson’s ownership of the club that need answers.

The chief one for me revolves around what the asset freeze order covers – does it cover the shareholding that Carson has in BIH either via his own name or via his investment vehicle “Great Luck Management” – and if it does, does that mean that those shares cannot be sold or traded if and when the shares are relisted?

I don’t think it’s a coincidence that one of the conditions the HKSE have laid down prior to BIH being relisted is for the company to prove that Carson retains control in the company properly.

What is also worrying is that in this morning’s Hong Kong Commercial Daily, (translated here) the last paragraph of the report seems to indicate assets that have not already have been frozen may well be seized if they think they are connected with criminal activity – whether this means shares in BIH or not is another matter.

That then gives the secondary question that if those shares are included or become included in the asset freeze, how does that affect the ownership of BCFC by BIH – can BIH sell BCFC if necessary or are they forced to hold onto them until the outcome of the trial.

The thought that BCFC could forcibly remain within BIH hands until the outcome of Carson’s trial – which will be circa January 2013 – seems bad enough but that then raises another question about what would happen should Carson be convicted and his assets seized – and how long that would take. A quick look at asset seizures in the past on Google will show it’s not something that is done quickly.

Another thought revolves around Carson’s legal case next week whereby he faces a repossession order. This ruling yesterday would indicate that the house involved in that repossession order is most definitely part of the asset freeze that the HK judiciary have placed upon Carson and if that is the case I cannot see how the bank could repossess the house.

If that’s true, one would think that there is no way that the bank are going to write off £15million in bad debts and you’d think that they would look to repossess other possessions of Carson’s to cover what is owed – and once again, we’re back to his shareholding in BIH and/or BIH’s ownership of BCFC – particularly as the mortgage that was defaulted upon was used to prop up BCFC and BIH.

Of course, if that’s true there is no doubt that would be dragged through the courts as well as I would not doubt Carson (or potentially the prosecutors) would appeal against any seizure of other assets by the bank – and one would again imagine that would take time.

Whilst it’s imperative that the accounts are released as soon as possible in order to get the embargo against new registrations lifted, I think there has to be some clarification from BIH with regards to how they expect the summer to proceed.

However, it’s my belief that clarification would be incredibly unlikely to be forthcoming and thus I suspect we’ll only discover what is going to happen as it happens.

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39 Responses to “Questions, Questions”

  • Paul Carter says:

    Good work Al

    I think we need Pannu to resign. This would force BIH to put someone ‘in-the-know’ as leader who would be able to talk directly rather than say ‘I don’t know what’s going on cos I’m not on BIH board’

    Effectively we have an MD who is saying he can’t tell us anything cos he don’t know anything. Look at the accounts date debacle. Surely this makes his position untenable.

    We can’t go on like this, not knowing anything and waiting years for Chinese court cases to finish up.

    • almajir says:

      Paul

      It’s worth noting Pannu is only the “acting chairman”.

      The actual chairman of BCFC is also chief executive of BIH, is on their board and is a minority shareholder – Vico Hui

      He’s not been over here for at least 12 months though.

  • Marcus says:

    I thought a British bank had first call on BCFC assets?

    • almajir says:

      HSBC does indeed have a debenture against BCFC assets. I am unsure how that would work and it would no doubt complicate things further

  • Masaccio says:

    tbh Pannu has done the best he can and he’s kept the club going during the past season. He mentioned in the last programme that the freezing of CY’s assets caused problems as he couldn’t put money into the club. It looks like we’re still in the same boat and PP will need to make sure the club has enough money to get through the next season, which may include selling players to raise the cash.

  • Paul Carter says:

    Hmmm, acting chairman?

    FFS what does that mean :)

    We are now that inextricably linked to BIH whoever is running the club must be able to speak on their behalf or else we’ll never find out anything. I couldn’t do PPs job under those circumstances and would have to resign. The other thing is that just because Carson is grounded doesn’t stop him from making statements about the future of BCFC.

  • Smokin says:

    Varied statements which are based on guesswork, ill-logical assertions, and hypothetitical situations do suggest that your journalistic dreams are bearing suit. The tabloids are awaiting.

    However, if you wish to take a step back:

    a) in relation to the inability of CY to unfreeze his assets, you query where this leaves us. The answer is in the same situation we were all season. However, this is not as bad as it seems. THe accounts (when they come out) will show us in a dire state as at March 2011. And we were. Since then we have shifted alot of wages, sold our “stars” , and cut our cloth accordingly. So I do not think much wiull change on that outcome. Certainly, CH does not expect a fire sale anmd he is one of the few that does know something factual about our finances.

    b) in relation to the Barker Street house this is a simple moprtgage situation. CY mortgaged his house, CY failed to pay the installments die on the loan, bank sues for the property. THe bank can only go after the properties put up as security for the loan. i.e. the house. We will see shortly how this ends, but nothing to do with us.

    c) in relation to the panic caused by a comment that the police may seek to freeze more money may I calmly suggest the folllowing. IF (and a big if) the police freeze more assets, then they can only dfreeze assets relating to CY. In the case of Blues, this refers t his 23% streholding in our holding company. Whilst this is a significant shareholding, it does not control the company. And should the chips really start to tumble for CY, I would expect his son to be the ownwer of the shares before anything happens.

    KRO and I truell hope you enjoy a break soon!

    • almajir says:

      Smokin

      Thanks for you comment

      1) I stated On the face of it, nothing has changed as the status quo remains which would mean nothing has changed. I can’t see what you’er disagreeing with

      2) Let me turn that about for you. If you were a bank, and someone defaulted on a loan for £15mil and you were told “sorry, you can’t have the security cos the Government have dibs on it” would you turn around and say “fair dos, we’ll just write that off” – or would you try to get a charge order on something else? As I stated in the article, that would get dragged through the courts – and of course that means that there is no guarantee of success.

      3) Again, you miss the point. If 23% of the company is seized by the HK Govt it infinitely complicates matters with regards to selling the company and/or it’s subsidiaries. Any sale of anything would have to be ratified by the government/judiciary which of course would take time.

      I would like to suggest that maybe you need to take a step back from commenting, have a read again and maybe think about what the tone of the piece is. As the title says – it’s questions – not statements – nothing is answered and the point is it’s all stuff to think about, not necessarily what will happen but what could happen – and they are questions that may need answers to and clarification on.

      Maybe you should take a holiday, freshen up and return once again a happier commenter?

      Hmm? ;)

      • alexjhurley says:

        Groundhog day, anyone ?

        frustrating as the situaiton is (i.e. an owner who can’t put cash in and possibly / probably can’t sell his minority share) the moot point here is NOTHING’s CHANGED SINCE THIS TIME LAST YEAR AND NOR IS IT LIKELY TO FOR AT LEAST 9 MONTHS.

        didn’t do us any harm last season did it ?

        Going forward, PP has done a good job getting us on an even keel and as a consequence we’ve far more chance of a. being bought; b. complying with FFP regs and c. not going into admin / doing a Cov / Pompey.

        We had a sugar daddy and now we ain’t – get over it !!!!

        And as for the “we’ve got a right to answers” brigade (dullards), no we haven’t. these people seem to expect Pannu to print the detailed monthly trading figures on the back of the evening mail. Doesn’t happen anywhere else, and won’t happen here.

        • almajir says:

          Alex

          Whilst I commend your optimism, you have made one slight yet crucial error.

          Things aren’t the same as last season. We weren’t operating under a transfer embargo during a transfer window. We are now. Despite your assertion that we “have no right to answers”, BIH has a statutory obligation to publish it’s accounts, which it hasn’t done… and which are now getting on for nine months late. You might think that this isn’t anything to worry about but the fact is that it is; Blues cannot operate properly as a club until those accounts are filed – which would be complying with the FFP regs you mentioned – and their continual pushback of deadlines is a slippery slope leading to God only knows what.

          Have we a right to answers? Again, I think you’re wrong – we do have a right to ask the question what the hell is going on with the club and it’s parent company. Any company that was nine months late filing it’s accounts and had it’s majority shareholder and president charged on counts of money laundering would have it’s shareholders and stakeholders asking questions.

          Things have to change. Now, if they publish the accounts I agree with you we’ll be back to the status quo of last year. However, I think for many the trust in the BIH board has now evaporated and that whatever they do they will not satisfy a large chunk of the fanbase.

          • alexjhurley says:

            Good points, well made. You’re right, I am being v optimistic, but its the blues – I’ve got to be. I had my first season ticket in the wheldon era. This is a million times better than that was.

      • Smokin says:

        Ok,

        Firstly, you will be glad to know that I will be taking a holiday in June. I do not give advice based without knowing whether it is beneficial, nor do I make legal and financial points to blogs without knowing that I do know what I am saying from my education and experiences.

        1) YOU NEED A HOLIDAY. You can not tell me that we agree “nothing has changed” and then tell AlexJHurley that not everything is the same. The Transfer Embargo is no big deal. It will be lifted. The accounts will be filed. When the time is right. :)

        2) A mortgage is based on a contract. The bank can only get what has been offered as security as per the contract. In this cvase, the security is quite clearly the house. It is that simple. If CY wins this month, all the bank will do is wait for the asset freeze to end and try again should repayment not be forthcoming. It does not matter how you try to spin this, this is all that will happen. It is this certainty that makes legal based socieities so much better to live in, and news stories esier to get right :)

        3) Your point is hypothetical and baseless. It will never get to the stage where CY will let the Hong Kong Authorities take all of his assets. I mean, what sort of suspected money launderer would be be if he did this?

        And this is where it all comes out:

        CY LOVES THE BLUES. He must do. He vastly overpaid for the club. He gave us additional monies to make (for us) huge signing, he bankrolled the paying of huge wages to some very shoddy “Superstars”. He cried with joy when we won the League Cup.

        So, he is not going to sell the Club willingly, he is definately not going to let the club go into Administration and lose all of the 100M he has invested, and he is most certainly not going to let the Authorities take the shares. Would you???

        As a result, everything as to the future of the club waits until CY has an idea which way the cookies are going to crumble. If he is going down, he has his own firesale. If he is going to beat the rap, expect money to be spent next January.

        • BobbyBlue says:

          Carson is that you?? My god Smokin, you really love the bloke!

          A) The transfer blog may not be lifted in time to keep CH. Problem. Why are we so late in filing it? Probably another problem.

          B) The mortgage is indeed based on a contract. A contract that we havent seen. It could quite conveivably provide for a contingency where the bank cannot re-possess the property and give them the powers to have the debt repaid by other means. Who knows? I think you a making one massive assumption that the bank can ONLY get repayments from a forced sale of the property over which the mortgage was taken out.

          C) YOUR point is hypothetical and baseless! How do you know that Carson “wont let it happen”… he might not have a choice!

          “Carson loves the club… he overpaid for us” – over payment for an asset is one of the main characteristics of money laundering. Yes he spent some money. Not nearly as much as he promised mind (though it the promise had a great impact on our season… another debate there!)

          Your final paragraph – i agree with. Everything hangs in the balance until Carson is found guilty or acquited. This period of uncertainty will be damaging for the club.

          Say hi to carson for me when you see him. Perhaps you ask him, if he loves the club so much, he might think about selling up and relieving the the club of his burdensome problems.

        • Paul Carter says:

          CY LOVES THE BLUES

          Funniest thing I’ve heard in years.

          Strange how he wanted to buy Sheffield Wednesday, Reading and even the filth before coming to us.

          Love them too did he?

        • almajir says:

          Smokin

          I’ll have an ounce of what your username refers to.

          Have a good trip.

  • Paul Carter says:

    Game, Set and Match to Almajir :)

  • Spotlight Kid says:

    I keep following this saga almost daily on OP, and take this chance to thank Almajir for diligence above and beyond…. However, without getting locked into the minutae of complications that attach to each player involved, I wonder how long the Football League (and other authorities) will tolerate a club acting in the way BCFC is?

    The failure to file accounts effectively means failure to meet trading stipulations, and regardless of what is actually contained in the accounts the FL (and possibly HMRC) will soon have to ask what COULD BE in those accounts, and act on that basis. With the shenanigans at Leeds, Pompey and Rangers in mind, would an extraordinary ‘pre-emptive strike’ (to make an example of a dithering club before the truth emerges in dribs & drabs over the next few months or years) be such an unreasonable course of action?

    Whether the FL or HMRC have the will to do it is another matter, but the actions of BCFC’s owners is slowly creeping beyond merely cavalier and into arrogantly dismissive of fans, management, staff and authorities alike.

    • DoctorD says:

      Good point Spotlight Kid. I’m surprised the FL have said NOTHING of note on this matter all year. Surely they would have all FL clubs on their radar and would want things clarified *before* things get really out of hand — for us or any other club. Or maybe the FL are just weak and can’t be bothered. Probably the latter.

  • BobbyBlue says:

    Smoking – I think you are frustrated (and you’re not alone) about what you perceive as “doom and gloom” and scare-mongering. I am an optimistic bloke BUT am not shutting my eyes to the reality of the situiation. Its not good. But that’s not me turning my back on the club, which needs its fans now more than ever. However, you dont have to be positive about everything to “support” the club.

    KRO

    • Smokin says:

      BobbyBlue – not so much frustrated by “doom and gloom” but disappointed by points being made which are just ill conceived, and wrong.

      As for being positive, I am 100% sure that the years 2002 to 2012 will be looked back on in future years as a major highpoint of the Clubs history. It will require a lot of luck, good furtune and teamwork to get back to where we once were with this situation. We are more likely to stagnate in the Championship ala Derby than go back. But it will be fun to watch!

      KRO

  • Oldbluenose says:

    Spotlights article, is the worrying thing for me,!!. Will the ” Dam break “, With the F,L.!!. Could they take offensive action in light of BHL’s, non compliance with ” normal proceedure ” being flouted with apperant disregard,?.

  • Evesham Blue says:

    Tbh I am sick and tired of the Prophets of Doom now and the constant media speculation about Baggies going to make an approach for CH “imminently”. The Prophets of Doom were predicting administration and relegation last year. Then again we set ourselves up as the fall guy because no one knoes what is happening.

    CH is under contract. Baggies need permission to talk to him. Blues will reject any hostile bid which means Hughton would have to do a McCleish to leave which I just cant see him doing as he has principles.

    I am sure PP knows that the embargo has to be lifted before July 1st the start of the transfer window. Doesnt stop us identifying targets in the meantime.

    Whats the point of getting worked up about something we cant do anything about? We just dont know what is going on behind the scenes. Nor do I expect otherwise as thats the way they operate. Start worrying if we are forced to sell our better players from last season and CH leaves. In Hughton we trust..KRO

  • Atahualpa is a BlueNose says:

    From the content of his comments, I believe he’s having a decidedly dodgy one Almajir.

    • Atahualpa is a BlueNose says:

      I mean Smokin of course.

      • Atahualpa is a BlueNose says:

        Almajir,

        Got some points I wish to run past you;

        1) Do you believe that the accounts will be published in the next couple of days??

        2) If so, do you think that the league can continue to impose the player registration sanction if they are not satisfied with any aspect of them?? After all, they will make for grim reading and goodness knows when this year’s accounts will see daylight.

        3) From what CH has been saying in the press as regards to squad building and enhancing, it would seem that given certain assurances, he will more than likely have another go at getting us promoted this year. Has there been any development regarding Foster being sold or whether you believe part of the transfer fee will be given to CH. I hope it is not a similar situation to January of this year with LR and JB being sold to keep us ticking over and cheaper alternatives brought in. We should be building our team and squad around the likes of Davies, Burke, Redmond and co.

        You’re right. It’s incredibly frustrating to have BIHL making no comment regarding the whole CY issue. It makes one wonder whether CY was/is BIHL. Without him, it’s sinking.

        • almajir says:

          Atahualpa

          1) although I’ve been assured that they will be I’m afraid I won’t believe it personally until I see them.

          2) the league will probably want assurances that bills are being met; however bearing in mind we managed fine last season and we don’t seem to have problems with HMRC or transfer monies I think it should be okay and they will lift the embargo.

          3) I have no idea. Tatts is the man to ask about that sort of stuff.

          What annoys me about BIH is that Carson is only a minority shareholder; if they wanted to, they could ask him to step aside from the board for a while and get on with sorting the company out. There doesn’t seem to be any urgency or movement at all in honesty to take things forwards

          • Atahualpa is a BlueNose says:

            Thanking you for that Almajir.

            BIHL – surely the rest of the board must be capable of continuing – even without the mighty CY there to pull the strings. If they really needed or wanted him for direction, his freezing of assets does not include the freezing of communication.

            Sometimes silence is not the best option.

            CY has to acknowledge that the game is up – it’s apparent to everyone but him. The worst case scenario if he is found guilty of money laundering is a lengthy stretch and seizure of his assets. Best case is he is found not guilty but still needs to pay the tax on his ‘funds’ which were not declared. But it is not looking good. Money laundering is easy to prove when the recipient has no assets or regular sources of income. I believe that his only hope is attempting to show that the funds were part of his ‘income’ from the casinos in Macau, although the HK authorities have claimed that the deposits in CY’s accounts have the “hallmarks” of money laundering.

            Question is, if he had close to £60m cash in his accounts, why oh why would you remortgage your home for a short term loan?? Something surely does not add up. Problem is it has, and will continue to affect our club for the forseeable future as CY/BIHL and BCFC are interlinked to one another.

            If there really is an interested individual or party out there, now is perhaps the time to look at a takeover, even a hostile one if CY doesn’t agree. Only hope they have more of a structure with less of a potential for imploding like our current mob.

  • Aussiebrum says:

    If someone wants to buy BCFC and the HK Government does freeze the shares, all that is needed is a rights issue.

    A rights issue of say three shares for each one held at $3 per share would either force the Government to also stump up considerable capital for BCFC or CY’s shareholding is diluted by 75% (assuming the new owners fully underwrite the issue, therefore take up CY’s entitlement).

    Either option is a suitable result for us.

  • Mark Y says:

    Atahualpa, I believe 60m passed through CY’s account several years ago rather than being frozen in it whilst in charge of Blues, he borrowed a lot of money to buy Blues and subsequently provide more funding, hence the need to remortgage his house. I think we are going to be in limbo for a while yet and the best we can hope for over the next couple of months is the release of the accounts to lift the transfer embargo. We are not going to have the same cash flow as last season from Europa Cup and further unpopular transfer sales are strong possibility.At least WBA are cooling on CH.

    • Atahualpa is a BlueNose says:

      Mark

      You’re right in stating that his criminal charges relate to about £60m passing through his various accounts from about 2001 to 2007.

      However, his accounts that are frozen at the moment had in the region of about £60m in them prior to the court order and hence why he made the attempt to get part of it overturned on a technicality. Obviously he did not fund the purchase through the majority of his own cash – ostensibly he did not have enough – what I questioned was why remortgage when he clearly had access to the funds at the time??

      It seems strange he would wish to pay a high interest rate for a short period of time.

      CY aside, the accounts will lift a big burden off the club’s shoulders – no to mention us the fans, and I hope that the sale of Foster will be enough to keep us solvent until the next turn of the fortune wheel at least.

      NB. The CH situation will more than likely get sorted by the weekend as well. It remains to be seen if it goes for us.

  • bluenose08 says:

    Keep up the good work almajir its this site i come to daily to find out the latest on b.c.f.c as its the ONLY
    place to get information and please dont go on holiday till after the accounts have been published.
    Do you think they will publish both sets of accounts at the same time ?
    k.r.o.

  • Bluehobba says:

    I had a fortune cookie once and when opened it read………….”Good luck”

  • Paul Carter - The voice of reason says:

    Al madge – A question

    A fellow Blue pointed out a scenario whereby we could (very small possibility) be owned by the Chinese government. it all made sense the way he mapped it out so my question to you is could it happen? Also would it be a good or bad thing for the club if it did?

    • almajir says:

      I think it would be very unlikely. Even in the outside chance they seized his shares, as AussieBrum points out it wouldn’t be massively difficult to force them out and I have every belief that they’d have no intention of wanting to hold on to them anyway.

  • Liam Moakes says:

    Both sets of accounts won’t be published at the same time. The latter ones (up to June 30, 2012), would not be published until October this year.
    It takes that period of time to get them ready. Accounts up to and including any June are always supposed to be published the following October.

  • nick says:

    who else has a slight feeling that ‘smokin’ is actually pp lol?


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