Often Partisan

Announcement Analysis

Birmingham International Holdings last night published an announcement confirming demands had been received from former directors such as Peter Pannu for various fees that were owing along with from China Energy Development Holdings Ltd who BIH apparently owe £4.1million in overdue loan payments and interest.

While the initial headline would appear to be Pannu and his claim for damages for the “hurt and distress” caused to him by his removal as CEO and MD along with his later removal from the board, there appears to be a deeper problem with respect to the money owing to China Energy – and of course the question is can BIH pay it? As we don’t know the full extent of BIH’s accounts we don’t know for sure if there is money available to pay them off but what we do know is that this demand can’t have come as a surprise bearing in mind the last accounts showed HK$134million in payable or overdue loans. It would appear that at least one of those chickens has come home to roost.

China Energy is a company that is intrinsically linked to Carson Yeung – and also to Pollyana Chu via Kingston Securities. It’s a long convoluted story – which I cover in full and in depth in Haircuts and League Cups – but the crux is that China Energy is linked to an alleged dodgy deal done by Carson that dwarfs the money laundering charges he faced in court. There are numerous crossovers as over the last five years three people have been directors of both companies – Allan Ip (who was also company secretary of BIH), William Chan Wai Keung (who was involved in the purchase of the BCFC to begin with) and Chang Kin Man. It’s my belief that the loan repayment has come at the behest of Carson – and probably Pollyana too – as Carson looks to reassert control over BIH and to set aside the Receivers. Should China Energy issue a winding up petition then everything gets a whole lot crazier and messier – and I have to be honest, it will be difficult to see how that would work out.

The announcement also talks about Carson issuing an intervener summons in addition to the previous summons against BIH. This didn’t make sense to me initially – why would he want to intervene in his own summons – until I remembered the original summons is made in the name of BIH against EY – but by the “Directors” appointed by the “EGM”. Carson has now added his own name to that summons as he looks to step up a gear against the Receivers. The initial hearing for that is on April 1 and no doubt the Receivers will have to have their legal team to look into that now.

So where does this lead the club?

This is where I do something that I don’t like doing and I talk about rumour. There is a strong rumour from HK that Goldin Financial, who are acting as financial advisors to BIH are soliciting bids for the club – and that they are asking potential bidders to put together their bids quickly. Now whether this means the sale of BCFC as an asset, of BCFC and BIH or just the listing on the HKSE I have no idea – but there is definitely something happening on that front. I have no ideas on identities or values of bidders and I can’t offer timescales either because of the severe complications – but it would appear that EY have realised that they if they want to get paid they have to work out how to sell the club and fast.

One other thing that crosses my mind is that the deadline for points deductions to be applied for insolvency events for this season is today. Now I am not saying that the announcement has confirmed BIH will be pushed into insolvency – however, I believe it is legitimate to fear that that might just happen. The next few days are going to be interesting as EY will have to release a statement soon as to how they are dealing with these demands – and if bids have been solicited under rule 13.09 they will have to mention them too – even if it’s just to say offers have been received.

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68 Responses to “Announcement Analysis”

  • Tony E says:

    Thanks again Dan for your invaluable input, surely this latest action by CY pushes BIH towards administration. Is this a case of throwing the baby out of the bath with the water. I can not see what they hope to gain from this latest action.

  • Adrian D. Duffen says:

    Dan this truly seems to be desperate people doing desperate things (to their and others) detriment?

    Your thoughts?

  • Brian says:

    Dan
    It comes back to how can they sell anything without CY consent.

    • almajir says:

      Brian

      I don’t know – but they are definitely trying to sell it.

    • Vern says:

      Correct, unless the business receives a winding up order, then the mandate of the receivers will change and they will be able to do whatever they want to maximize funds available to pay creditors without shareholder approval.

      The above makes the demands issued today appear rather hollow, why would Carson want to push the business into bankruptcy and risk loosing all control?

    • Stephen Wood says:

      Ernst & Young have the power to recover there costs & this does not rule out from the sale of the club. And i do not think Carson has the power to stop them in this!

    • chris says:

      don’t need CY’s permission to sell only a majority of shareholders have to agree and in recievers hands shareholders can have even less of a say in matters

  • Oldbluenose says:

    It is no wonder that we want rid of ” this Hk mob “, So torturous, and self-seeking, No interest at all in the agony of thousands of fans who fear the worst for our club,!!.

    in the early years, I had no harsh feelings towards CY, and Co;, but these days I start to feel hate towards them, — A feeling i never thought would emanate from me,???.

  • BigAl says:

    Dan, unfortunately, the only way for E/Y to ensure that they get paid is for the company to go into administration as they then become preferential creditor.I just don,t see any other way round it unless they have found sufficient evidence linking Yeung to more misdoings, which the anti Yeung directors/shareholders can use to force a buy out of Yeung through the courts.

    You just cannot see any legitimate buyer coming in while Yeung and his cronies are involved. It is now getting so complicated , Yeung’s involvement with China Energy, and god knows who.What E/Y’s legal team make of it all who knows. This definitely a defining moment in this sorry saga.

    The hearing due for the 01/4, Yeung’s appeal against conviction ongoing, what a total cock up!As you say Yeung keeps pulling rabbits out the hat trying to wrestle back control. The bottom line is that the receivers are court appointed , they can only be removed by the court. What do the courts make of all this, what does the football league think now.You could write a book just on the period the receivers have been in charge of BIH.

    All we can do is sit back and wait for the next spanner to be thrown in the works , the end game would seem to be just round the corner one way or the other, how this will affect BCFC again who knows.

  • StaffsBlue says:

    Could it all be smoke and mirrors to cover up something much bigger that they don’t want anyone to find out? I can’t see any other reason why Yeung and Pannu would want to cut their noses off to spite their faces.

    • Smudge says:

      That is the same thought that flashed through my brain. Is it possible that CY, PP and A.N Other is trying to keep EY busy with summons/counter summons to try and stop them digging up any well hidden evidence that could be detrimental to their future freedoms. I said in a previous post that all of these loans, legal bills and other expenses that have been (still being) accumulated will at some point need to be paid back. The question is where does the money come from.
      An interesting few weeks lie ahead and hoefully many of the burning issues will be resolved in our favour, although I won’t hold my breath.

  • Mineheadblue says:

    It seems that if there is anything at all that Carson and Pannu can do to further destroy our club, then they will do it. Please please, please, let this end soon and get their poisonous claws out of our club!!!!

  • Dave mann says:

    We’ve had plenty of rumours over the past 3/4 years but if your saying that something is happening on the bidding side then that’s got to be positive news surely … To sell is to get paid and that sounds good to me so were be watching this space with interest and lets hope the end is nigh .. Though as I’ve always said I won’t celebrate until the Ts are crossed and the Is dotted and we’ve seem the back of them!! Kro

    • StaffsBlue says:

      If E&Y do manage to sell the club, then they will have deserved every penny they get. That’s more than I can say for some.

  • AndyW says:

    I have to say, I don’t find anything encouraging in this latest update. I cannot see that the bids that are allegedly being solicited by Goldin Financial are from anyone other than a bidder who will be seen to be associated to Carson or Peter Pannu, and frankly I fail to see how that bodes well for the club. Even though the deadline for points deductions passes today, we are still at risk of points deductions at the start of next season if we do go into administration, and I have no confidence that this matter will be sorted out before that starts, and if the squad cannot be enhanced and we begin with a 10 point deficit, it would be hard to see us pulling that back? The bottom line is, until there is hard evidence to remove Carson completely from the equation he will not relinquish any hold he has on BIHL or BCFC. I remember at the start of this saga, Dan consistently reported that the Chinese as a business nation are driven by a strong desire not to ‘lose face’ in their dealings. How true that appears to be? Let’s hope that E & Y have their own ‘rabbits’ to produce, and quickly!

    • Alex T says:

      To Carson, I would reply….
      ‘Your already in Jail… Your ‘face’ is already more of an ‘arse’ than anything resembling respectability….. so just F**k off!’

  • blue n bad says:

    How can E&Y solicit bids when the major shareholder doesn`t want to sell? Surely they haven`t got that power particularly if it`s just to get paid.That would be self-serving and not what they were brought in for.

    • Adam True Blue says:

      Administration is the key word, shares would then be valueless after the main creditors have taken their ‘bit’ the company would then be sold to the highest bidder with no come back from shareholders.
      It’s what a lot of fans were shouting for a year ago and they would gladly have taken a 10 point deduction to rid ourselves of the parasites.
      I worry that nothing will be put in pl;ace to prevent this happening again.
      It’s a long and winding road, Kro

      • BhamCityJulian says:

        No that simple. If the creditors don’t agree a CVA then the Golden Share doesn’t pass the new owners meaning that BCFC drops out of the Football League

    • chris says:

      he’s a major shareholder not majority, plus recievers have more power than a normal board of directors and seem to have the courts and HKSE on their side, SO FAR.

  • Stevie W says:

    I have held out for an April resolution and that BCFC will not be sold off as a first option and i still stick by my stance that at the moment they are trying to either re invest in BIHL or sell BIHL as a going concern with BCFC attached. Given what has happened today then I still stick by that and certainly with Dan’s journo publications nothing has made me change my mind.

    The selling of BCFC I would think will happen if the bottom falls out of the above as clearly we are now set up for insolvency and winding up if the above does not happen.

    What an epic Dan needs to get Steven Spielberg on the case

  • Brian says:

    I know this sounds mad but could this be a way of all parties coming out of this untarnished. If the receivers have to give into CY demands they will look very stupid. If the receivers carry on investigating what could they find which CY and is mats don’t want found. The new demand by China Energy Development Holdings Ltd asking for the £4.1million owed by BIH Looks like It could bring the house down. So best way forward for both party’s is to get rid of ASAP.

  • Mitchell says:

    This is exactly why I have been boring everyone by saying that Wigan is the key to our surviving possible 10pts.drop. Instead of bleating on about how mundane our season is going to end..get real and put pressure on GR and the team to get maximum points. hopelessly wrong I may well be BUT let’s not chance anything.Wigan plus ten is our end of season interest.

    • StaffsBlue says:

      I’ve no idea what time the cut off point is.. but 12 hours from now we’ll be safe from a points deduction this season. If it happens at the start of next season, we’ll deal with it then.

    • Raymondo says:

      I have had the same thoughts re the 10 point deductions Mitchell and I too am watching Wigan with the same trepidation. Let’s hope for the best.

  • Dave Mann says:

    It’s the final countdown. Kro

  • PeteBaldwin says:

    Hold on – so rather than sell the club for tens of millions, they’d rather issue a winding up petition to recover £4m and a few thousand for Pannu?

    Don’t believe that for a second.

  • Kazakblue says:

    So Pollyanna rears her ugly head yet again in this ongoing fiasco, I still believe the original money used for buying the Blues came from one of her she’ll/ Offshore interests, I know Daniel, you will tell me I am totally wrong, but this was the supposed story in Hong Kong over 2 years ago.

  • Adam True Blue says:

    I do wonder whatever happened to Liu Chun-yip, over to you Mr Pannu?

  • paul from oz says:

    Looking from a small share holders point of view(brought on stock exchange), the latest going on is all about how much money CY and associates is trying to get before the assets are sold. As the parent company will never be floated again, lots of reasons, only way to pay stake holders and bills, is asset sale, Once EY report to court that fact, the court will offer to largest share holder( to buy all share) I can’t see any takers, only option left, court order to sale assets to pay Tax office and priority stake holder, that may not leave that much for owner of parent company to share around, the stolen money may not be returned or found and another missing money may take years to find, would say new owners by the start of next season. hopefully the next owners will care about the club NOT the money they can make

  • Dave Mann says:

    The new owners , if and when they do takeover will not be making any money whatsoever until we reach the promise land of premiership football and then there after spend big do it will be a while before any return is seen if any! Kro

    • StaffsBlue says:

      All the more reason for us to be bought by someone with a love for the club. Unfortunately, that’s unlikely to happen, so whoever buys us will probably spend the absolute minimum in an attempt to get us into the Premier. They’ll most likely make a profit then sell us on. That could well be our future.

  • Art says:

    May be in this on going poker game EY are about to make an offer which CY can’t refuse .

    Agree to sell or administration.

    With the loan sharks breathing down his neck it would be a no brainer.

  • AJ says:

    So can e and y or golden financial legally sell the club without yeungs consent?

  • SXBlue says:

    This is a quite amazing twist in the saga that is BIHL. Would it not be possible that EY could borrow the money commercially required to stave off China Energy and secure the loan against the impending sale of BCFC as a separate entity or indeed BIHL. This would seem to me to be a sensible business strategy however I don’t know if the receivers are able to secure loans in the capacity that they are currently acting. Your thoughts Dan would be appreciated.

  • Richard Granfield says:

    Forget Carson and Pannu we have just signed Diego Fabbrini from Watford. He had a storming game against us for Millwall….A great acquisition!

    • StaffsBlue says:

      I said yesterday, that the only player I would bring in on loan, if possible, would be a No.10 type to challenge Shinnie. Glad Rowett thought the same.

    • richardm says:

      That’s a fantastic signing, he was head and shoulders the best player on the pitch when we played Millwall! Well done GR.

  • Dave Mann says:

    Looks like we’ve signed that shinnie type player staffs in fabbrini … Can play wide or as an attacking midfielder or second striker so it’s 4-2-3-1 all the way to the end of the season mate ! Kro

    • steve says:

      Is he the one that ran the game against Millwall ? If it is,well done GR. He looks a very good player.

    • StaffsBlue says:

      That was the only position I could see where we needed competition. Shinne was the only player who could play there, so the competition is a good thing. It would be nice if he could score the odd goal too. Our front four have contributed only 5 goals in the last 10 games… 2 to Donaldson, 2 to Cotterill and 1 for Shinnie.

    • chris says:

      28 days then watford have recall with 2 games left, so he will be back to help them in the play-offs if they reach them

  • Tony E says:

    Yes, he ran the show when we played Millwall.

  • AJ says:

    I reckon Gray will be sold in the summer if Bournemouth get promoted, so we may use the money to buy diego.

  • Tony E says:

    I also think Gray will be sold in the summer, but doubt it will be to Bournemouth

  • Hillfield Blues says:

    Where this latest twist throws me,is that it seems that EY are trying to sell the club without the consent of CY. Dan,it would be interesting to hear Will’s take on this latest news as he was pretty emphatic in the video blog that EY didn’t have the power.

  • Hvala Obafemi says:

    Supporting Blues is like watching crossroads on acid. You don’t know what’s happening next. I wouldn’t be surprised if Benny turned up carrying his spanner and a couple of million quid in his back pocket to save the day. In a mad way I’m almost enjoying the drama.

  • Bluenosesol says:

    E&Y are a massive global business. The people on site can seek advice, opinion and decision from a huge hierarchy of legal and commercial expertise from within the wider busness, so dont think that this is all down to a couple of consultants mooching around BCFC/BIHL. E&Y will be paid and paid handsomely. They are in a win win. If they sell the club, they will get paid as part of the cost of sale. If they dont sell the club and the club stay solvent, they get paid as a cost of the business. If they take the club along the insolvency route, then they sit at the top of the pile of preferred creditors.
    On another note, at the Millwall games me and a mate discussed Fabbrini. My mate said he was on loan to Millwall from Watford. At the time I observed that he was the best player on the pitch by a country mile and how the hell did Millwall gain his services ahead of us. Good to see that that situation has been addressed! KRO!!!

  • Raymondo says:

    What a furore the appointment of Ernst & Young by the Court has produced. I still think that CY is really worried about what they will find and is desperately trying to stop them before they do. I also think it is too late and they already have enough on him to negate his appeal against the money laundering charge he was convicted for. If our club goes down then I certainly hope he is in the cooler for the full duration of his six year sentence. If only some billionaire would buy our club. Please? Richard Branson where are you?

  • Mitchell says:

    Are we now assured that points will not be deducted since midnight has passed? Also, could points be deducted retrospect in the summer if things go very badly wrong. Guidance on this please Daniel.

    • chris says:

      of course.
      we could be deducted 10 points now or at any point in the future, but it would be applied at the start of next season

  • Luke says:

    I still feel the timing of yesterday’s announcement (on the eve of the cut-off date for a points deduction this season) might be important and not just a coincidence.

    Given the challenges facing E & Y, might it be that they decided yesterday to make the announcement, thereby giving themselves the option today of taking both BIH and BCFC into administration, with a points deduction?

    If admin is the only way they can sell the club without Carson’s approval, it kinda makes sense. Why take the points deduction this season? Maybe the asset value will be higher if Blues take the deduction this season (and still survive in the Championship, which they could), than if they start the 2015/16 season with -10.

    • StaffsBlue says:

      Even if we did incur a 10 point deduction at the start of next season, with Rowett given the right tools for the job, it’s not a massive amount to pull back. IIRC, the likes of Coventry, Bournemouth and Rotherham have done it comfortably in recent times… and Luton Town just fell short of clawing back 20+ points. I’d much rather start with -10 points next season than have had it thrust upon us this season.

      • Luke says:

        Some prospective buyers might be thinking about promotion as a possibility in the first season though, and a ten point deduction would pretty much rule that out. So the club might be worth more with a minus ten this season rather than next.
        The risk is complicated though, because administration would possibly entail the players not getting paid, which would have a detrimental effect on performances and results. The home defeat to Millwall really could be an important result. I hope not.

  • weaponsguru says:

    I reckon that E&Y made their announcement yesterday for a very specific reason – to STOP us having points deducted when BIHL goes into Receivership.
    If they hadn’t made the announcement, the FL could legitimately claimed that an announcement after the deadline was made to try to avoid a points deduction, then deduct them retrospectively.
    As it is, now when EY make their next announcement, they can say “we didn’t hide any possibility, we mentioned it BEFORE your deadline”
    Ergo, No reduction in value of BCFC prior to being sold.

    …….but what would I know eh?

  • Mr Cynic says:

    Try this one!

    If EY can’t find anyone willing to offer more than £4.0 for BCFC, then CY could (if the loan is secured against BCFC) use the China Energy loan to finance the acquistion of BCFC. This would require no cash, simply a series of back-toback transactions. Our dear friend CY, albeit through a currently needed front like the greatly respected Peter Pannu, would then become the, owner of BCFC, letting BIH and all its’ regulatory baggage go to the wall.

  • NDF says:

    Let’s look at this in a positive light. CY and PP take out a vindictive action against BIHL who have little or no money and no assets apart from BCFC.

    The Receivers have to respond to those actions and have to raise funds to pay the debts if they are real so will have to sell the only thing worth anything which is the football club. As long as they get enough to pay off these debts and their own fees problem solved and we can move on.

    • BhamCityJulian says:

      They can do this is the court order gives them those powers including waiving shareholder approval.

  • […] letters and other matters. The implications of these developments are discussed in two articles (1) (2) posted by Daniel Ivery on his Often Partisan […]

  • […] follows rumours posted on this site on Thursday that Goldin Financial had been soliciting […]


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