Often Partisan

BIH: Loan and Interim Report

Birmingham International Holdings have made two announcements to the stock exchange today which have varying degrees of ramification on BCFC. One concerns the loan being made to BCFC while the other is concerned with the interim report filed by BIH.

BIH have confirmed the details of the loan made by Trillion Trophy Asia to BIH, which will give the holding company liquidity in the months ahead and also allow for securities and bank financing for the football club. As it seems there has been some misconceptions over this loan I have to stress that this is Trillion Trophy Asia LENDING money to BIH, not Trillion Trophy Asia taking out a loan.

The loan facility is for HK$153million and includes money lent to BIH in May and June but not the money loaned to BCFC as cash collateral and is secured on St Andrew’s. It accrues an annual percentage rate of 8% and is payable in 18 months although that period can be extended by a further 18 months.

BIH have also released their interim report today. This confirms the interim results released in April but also adds detail to the figures.

  • A loan of HK$673,000 was repaid by Life Profit Asia Limited, a company owned by Carson’s wife (here named both as Wang Man Li and as Wang Li Fei) over the last six months. The fact BIH had lent Carson’s missus ₤56k is somewhat scary IMO.
  • HK$1.2million (nearly ₤100k) was paid to Asia Rays (Peter Pannu’s company) as per his consultancy agreement before ended on September 30 2014). As the period covered by the consultancy agreement goes from July 1 we can extrapolate that the consultancy agreement was HK$4.8million per annum (₤400k pa) at termination, which agrees with the fees given in the report.
  • HK$450,000 (circa ₤37,000) was paid in rent to Asia Rays for office premises in Hong Kong in the period to 31 December 2014 – despite that agreement expiring in February 2014 as per the report. These were the premises visited by me in October 2014.
  • The report confirms Peter Pannu’s interest in Birmingham City Ladies FC. This is a contentious issue; as I understand it effectively Pannu owns the company that owns their licence to compete in the FAWSL but does not contribute any money or time to their operation.
  • The report also confirms that BIH leased a vehicle from Carson’s wife for the amount of approx HK$1,303,000 – about ₤107k for the six month period to December 2014. This money paid for the vehicle and the cross-border licence plates which allowed it to be driven both in HK and in mainland China – something I know from my time in the colony to be incredibly expensive. This was terminated 10 January 2015.

If any evidence was needed of the issues surrounding the holding company the fact that the holding company had loaned money to a company owned by Carson’s wife and had paid for a vehicle for her to use in both China and HK shows just how much money was taken out that needn’t be. I’m also surprised that BIH continued paying rent to Peter Pannu despite an agreement elapsing (and the office being empty when visited by me) – which may have contributed to Pannu’s ire about me visiting said office.

I’m in the process now of investigating further Life Profit Asia to see if there is any further information to be obtained – however, while these monies have now been stopped I am morbidly interested if the Receivers can shed any light on any monies being paid out before to such companies before these events – after all, this is money that could have been used to operate the holding company and cause it to have less financial issues.

The loan from Trillion Trophy Asia should guarantee the survival of the holding company for a while – and hopefully the Receivers will be true to their word in that most of it will come to the club. The loan should be evidence that TTA are trying their best to sort things out ahead of taking over and I have been recently assured that the 2 year exclusivity period is to allow for an ultra-safe long stop date. Of course, we shall have to wait and see but for I think all we can do is trust in Ernst and Young.

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46 Responses to “BIH: Loan and Interim Report”

  • waycoolblue says:

    Well it sows just how bad at business they are what a joke talk about keeping it in the family I,m Surprised there is a lone to CY cousins uncles ants husbands Nephew. Its utter stupidity
    .

    • Steve-0 says:

      I’m not sure giving your wife a company car is tantamount to running a business poorly. This happens in normal successful businesses. Remember these guys are executives, they’re not line workers or labourers. In the grand scheme of things ie money they’ve put into the club even a plush new car is a drop in the ocean.

      Cost cutting is done by businesses who aren’t performing well.

    • Blue22 says:

      I didn’t know Carson kept ants!

  • waycoolblue says:

    PS thank for the info at lest we can now see how bad things mite have got had Ernst and Young not stepped in.

  • Keep Right On says:

    Sounds almost like our main man, Piggy Pete, has his snout in more places than expected.

    • Mitchell says:

      Whichever way you perceive this..the stark fact remains that Carson and Pannu plus other family connections have a real stake in our club and I feel for the next two years at least. In 2years time if TTA and E&Y have been successful then we move forward. If not then heaven help us.

  • FellowBlue says:

    Great stuff as always Dan. KRO

  • stephen says:

    Great report Dan – thanks for digging so deep and keeping us informed. Where you have written BIH leased a vehicle from Carson’s wife” I presume you meant ‘for’ not ‘from’

  • mark says:

    the financial freedom i could have working for these, oh well :)

  • Geoff S says:

    Almajir.

    Well done for trying to put these reports into accessible language (legal-speak is very off-putting as I found out when trying to read the original report). I only saw one announcement and the one I didn’t see must have been the one which contains reports where this awful Pannu is now sniffing around BCLFC.

  • Geoff S says:

    Talking of reports, how much much can be gleaned from this morning’s stuff in the “Mail” where it hints Dimmi Gray may want to stay at Blues this Summer?

  • Hillfield Blues says:

    You have to hand it to E&Y for untangling this mess and finding a formula in which TTA have the confidence to want to come anywhere near this lot at all. I know they’re having their pound of flesh but it’s the only way.
    I wonder whatever happened with the misappropriated 3.5 million quid?

  • Mickey07 says:

    Good report,how can pannu get that licence taken off him from bcfc ladies dan after all he doesn’t contribute anything to them?

  • mark says:

    oh well dear GR joined the chorus to say bye clayton if the price is right….let hope he can find 15-20 goal striker….i will just looked at burton stats…. obviously we got to watch our money……..i feel relegation loominggggg… yeah right looks like just below mid table again for us…

    • ChrisG says:

      Get a grip man, this report could have been much worse & if the majoity of the loan from TTA is to come to the club as stated, that will be around an extra 10 mil for GR to spend. KRO

  • StevieW says:

    BIHL is a going concern whilst EY are implementing their business plan to a successful conclusion. If this fails BIHL will be deemed a failed company and the end will be sharp and painful for us all.

  • rhees says:

    Thanks Dan I think E @ Y are doing a decent job. Would like to actually see some of this money filtering down to the club in purchases.
    Although generally optimistic I do have some concerns.
    If Donaldson goes nothing is really coming in at mo didn’t bode well.
    My heart says it will be ok my head says wait a minute before getting excited

  • swissjonny says:

    I am shocked at PP having the ladies license.How did he get this? Did he pay for it-if not was it taxed as a benefit in kind in the UK? Im no accountant but 1. Surely a financial benefit should have accrued to the club for the ladies licence and use of the clubs facilities. 2. Surely other bids for the ladies license should have been sought in order to value it correctly. As regards the loan 8 per cent interest on a collateralized loan-secured against prime midland real estate is ridiculous!!!! I presume E and Y know who is behind Trillion? If that is the case surely before granting a 2 year deal conclusion period they should have shared with the FA the identities of the protagonists-if they havent done this we could arrive at deal day and find that the FA reject the names under the fit and proper rules.Arse about face or what?? Equally in a world of 8 per cent interest rates on secured loans how much interest did Carsens bird pay on her unsecured loan-2200 per cent APR like some of those rotters who adverise on the telly!!! This is all truly shocking !!

    • almajir says:

      It’s been common knowledge for a while Jonny but not much could be done. As far as I’m aware when the licence was applied for it was applied for in Pannu’s company name (at his insistence) although as I said it has absolutely nothing to do with the running of the club – or even an office or a telephone number.

    • oldblue says:

      “As regards the loan 8 per cent interest on a collateralized loan-secured against prime midland real estate is ridiculous!!!! ”

      Indeed ! Why pay massively over base rate on such a low risk loan ? Why should the receivers be so accommodating ?
      What do the receivers really want ? Generally speaking they want exhorbitant fees for as long as they they can squeeze them out of a dying/dead business. Their problem however is that the cupboard is almost bare. What to do ? Answer they get some friends to loan bihl a stack of money. Why would their friends do such a thing ? Well for 8% return on risk free loan why not ! It’s a no brainer.
      So the “buyer/investors” or what ever they want to call these friends are happy because they can’t lose.
      The receivers are deliriously happy because they have secured a further 2 years’ worth of fees (possibly 3 to 6 mil pounds – who knows, again no transparency) out of bihl.

      So everyone’s a winner ! Well not quite. We suffer 2 further years of hand to mouth subsistence football and at the end of this period of sacrifice, we lose our ground to ….. well we can’t say who we’ll lose the ground to because we are not allowed to know who is behind Trillion Trophy.

      The above is simple hypothesising and could (i hope) be totally wrong. Dan….please reassure me !!!

      • almajir says:

        I doubt very much the receivers will be with BIH for that long…

      • swissjonny says:

        Oldblue.I like you smell a rodent. I dont understand why Trillion became preferred buyer .I can categorically state that a more credible and transparent buyer was in the wings.Why have we gone with people who need a 2 year window to do a deal and how on Gods earth was it in the companies best interest to pay 8 per cent on the secured loan !!! Its laughable.As Will pointed out these receivers know how to charge-your right mate I suspect closer to 6 million for the 2 years.Much as I know the 2 years is a maximum I believe all of this period will be used up.The HK markets are buoyant right now and there is plenty of money looking for a home.If anyone was serious about buying the listing and injecting or reversing something into it the timing was yesterday .It needs to be got on with-not messed around with for 2 years. I am seriously worried now.

        • almajir says:

          Swiss – without beating around the bush, maybe they offered more money?

          • oldblue says:

            “without beating around the bush, maybe they offered more money?”

            Quite possibly so. In the opaque world of bihl i guess that all we can do is speculate cos they ain’t going to tell us !

            What worries me, as articulated above, is that the receiver will have different interests/objectives to that of an owner. The owner would of course be looking to do a deal with the bidder offering the most money.

            The receivers however won’t be getting excited over the size of the bid. They instead will be looking as to what’s in it for them i.e. fee income. Well the deal they’ve lined up for Trillion Trophy at 8% on sod all risk looks excellent for Trillion Trophy.

            And, 2 years of further fees (maybe 6 mil) looks like excellent business for E&Y. Ostensibly, it certainly doesn’t look like a good deal for Birmingham City however.

            Maybe swissjonny and I are being little too cynical. Maybe we should have some faith in the the receiver’s integrity.

            Did anyone else notice the oxymoron in the last sentence !

          • almajir says:

            I cannot for the life of me believe EY will be in place for two years. I cannot believe the deal will take that long.

          • oldblue says:

            “I cannot for the life of me believe EY will be in place for two years. I cannot believe the deal will take that long.”

            if their objective was to do a deal, i.e. achieve a sale then yes, it would take nowhere near 2 years. i’m afraid however that a sale doesn’t appear to be their primary objective…

  • Jimbo says:

    Dan,

    Do you expect that these loans will be converted as part of the consideration paid for the club?

    • almajir says:

      It wouldn’t surprise me but I don’t know if it’s legally possible. I would imagine if it was then they will be.

  • Preston Bob says:

    Dan, I am interested in some of the dates at which payments to some of these entities was stopped. Did it coincide with when EY took over?

    • almajir says:

      It coincides with the period just before EY took over, when Pannu was ousted by Panos and Victor.

  • bluey says:

    Didn`t think we`d seen the last of Pannu. Imho TT will not bid for the club and BIHL will be in situ for a long time. This loan and 2 year exclusivity period is just a measure to appease the fans and give the false impression of things moving forward.Plus it might encourage a few more to buy ST`s. I understand the problems are complicated but why would anyone require 2 years grace before making a move?

  • duchess says:

    Dan…. I am no expert at the HK Stock Exchange rules, but if history is to be looked at, it would appear you can ‘lend’ money to HK businesses and instead of the debt been repaid, be granted shares in the company via a conversion as per HK rules.

    So I am clued up on business in England, and if this was the case here, and I was trying to buy a company where the owner wouldnt budge, this would be my way of getting the majority shares and eventually completing a ‘hostile takeover’.

    I would not be surprised to see more money ‘lended’ to BIH and therefore ‘BCFC’ by Trillion Trophy Asia, and when they have enough shares, bye bye Carson hello the man behind TTA?

  • StaffsBlue says:

    Tomasz Kuszczak signed on a 2 year contract.

  • Dave Mann says:

    Kuszczak signs for blues 2year deal. Who’s no 1. ? Kro

    • paule says:

      Good job I’m Birmingham through & through otherwise i might be asking for my season ticket money back!! What totally uninspiring signings we have made so far, are they treating us like mushrooms feeding us with s**t & keeping us in the dark or are they going to keep their promise & give Rowett money to spend? My worry is if we were going to have some transfer kitty then why would Rowett bring in the calibre of player he has. At the moment our team is weaker than last season & no decent signings seem to be in the pipeline.j

  • StaffsBlue says:

    I’m less impressed with this season’s signings, so far, than I was last season. But, we have to give the new players a chance. To be fair though, I think Rowett has to pull a couple of crackers out of the hat now if the summer isn’t to turn into a damp squib. Good luck to him.

    • Andrew says:

      i just want to say come august and paul robinson is named even on the subs bench. i would be worried.

      • Andrew says:

        likewise for gleeson

        • Andrew says:

          we need 2 defenders 2 central midfielders and at least 1 more striker that are better than the players we have imho, that might just see us stay same position in the league. competition will be fierce

          • almajir says:

            Andrew

            I think you’re going to be disappointed.

          • paule says:

            We were expecting to sign the 3 we had on loan either permanently or reloaning’s then we lost Randolph plus we have released a few, we have acquired 2 keepers who in my opinion are worse & probably less expensive than the ones we’ve lost, we gained a midfielder who i can’t see being any better than Dyer so where’s the exciting signing? I agree we need 4 or 5 average players to retain our mid table position & i feel we were led to believe that would be the case, now Dan seems to believe we will be disappointed i believe we have been fed the same old crap time and time again & we can’t do jack s**t about it, Rowett just be honest with the fans if we can only afford the standard of players you’ve brought in then tell us, fans had more optimism this time last year & that was with a poor manager. A bit of honesty will go a long way with Blues fans trouble is we haven’t had that for many years.

  • paule says:

    Trouble is StaffsBlue if you were a decent footballer looking for a move would you even consider going to a team that has brought in such low calibre of players? It worries me because I’m sure Rowett wouldn’t bring in these players if he had money to spend. A Gk that got released by Brighton & couldn’t get in the Wolves team & midfielder that got released by Sheffield Wednesday who finished the season below us, all very risky i think.


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