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Delayed Accounts – update
Since the news broke that once again the end of year financial results for Birmingham International Holdings were to be delayed there has been much speculation. With this in mind I have spent the last ten days or so trying to find out if there is anything further we can learn with regards to this continued delay and if there are any sanctions that may be placed against BIH.
One thing that immediately struck me is that there may have been concerns from the auditors with regards to the financial results. Indeed, in the announcement BIH made to the stock exchange one of the points the HKSE explicitly asks BIH to deal with is
“publish the outstanding financial results and address concerns, if any, raised by the auditors through qualifications in their audit report;
With this in mind I emailed BDO who act as auditors for BIrmingham International Holdings to ask them if there was anything they could say with regards to the delayed financial results; unfortunately they declined to make a comment citing client confidentiality.
Another theory I have seen posited was that the HKSE themselves had blocked the publication of the results via the courts. I must admit that I haven’t seen anything reported in the Hong Kong press to confirm this – which is something I would have expected even if the court session was held without allowing press access. Futhermore there was no case number available to check through the Hong Kong judiciary’s online system as to whether a judgement been made or if a case had been heard.
I have been informed by the HKSE as per rule 13.52 of the stock exchange that they do not require pre-vetting of results from listed companies. They also helpfully provided the list of sanctions that they can place on a company that doesn’t comply with the regulations with respect to timely announcement of financial results; these range from a private reprimand through public censure to reporting conduct to the overseeing regulatory authority. I have had no indication of which (if any) steps the HKSE are likely to take.
I also asked the HKSE for a statement with respect to the conditions laid down on Birmingham International Holdings prior to their relisting on the main board of the stock exchange and whether or not BIH had met or were in the process of meeting them. The HKSE declined to comment, citing that as a matter of the policy of the Exchange, it would not comment on an individual case or company.
Where does that leave us? Well, it’s the old case of having to wait and see; no doubt that when the HKSE makes a decision what to do publicly with respect to BIH it will do so. In the meantime we can only continue to speculate as to how much longer we will have to wait for the delayed end of year results and why.
Tags: BIH, Carson Yeung, China, HK
11 Responses to “Delayed Accounts – update”
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So the update is; there’s no update?
If you had nothing to say, you may as well have just just re-posted the James Nursery blog, at least that was fairly interesting.
Thanks for the input Fred.
Been on any coach trips lately?
No. Who do you think I am, Brendon Sheerin?
Thank your for keeping up the communication regarding the accounts for BIH, Almajir.
A question for you, if the HKSE had/has applied to a court for a block to be placed on the results being published, who or what would they be attempting to protect??
My own train of thought is, as BIH are used as a driver for BCFC, perhaps the powers that be have staked their all on Blues being promoted and the income guaranteed to the club from that particular revenue stream??
Of course the balance sheet would not be affected for the past financial year, but in similar cases, losses are not so highly considered if there is a considerable future income due with no vast increase in costs.
No more than a shot in the dark.
Any comment from peter pannu ?
I’m not likely to get one from him, put it that way
As regards Peter Pannu, he has a very good relationship with CH and keeps him informed of any developments. I doubt very much Pannu can add anything to what he has already stated in the matchday programme recently. The club seems to be ticking over nicely at the minute and CH along with his team have got us staring at the Championship title! Thanks for the info though almajir, its great you keep us up to date.
The next lot of accounts will be due in June wont they !!
Hi Al, thanks for keeping us informed.
The paragraph (regarding audit qualifications of the accounts) that you quote reads like a fairly standard paragraph, especially in the context of the pdf document you link to. I’d be reluctant to read too much into the wording of that paragraph. That said, it certainly doesn’t rule out the possibility that the auditors and BIH can’t agree on a true anf fair representaion of their finances in the accounts.
Picking up on what Atahualpa says above, my understanding is that a large part of the BIH losses for the year is caused through the writing down of intangible assets — to put it another way, the club is worth less in the future if we are not in the premier league beacause we will have fewer people paying to see us and sell fewer shirts (which can be technically represented as as an intangible asset in the balance sheet). The valusation of intangible assets is often an area where things get a bit murky, and it might be that the auditors would accept a smaller reduction in their balance sheet value if we are in the premier next season, which might make it worth delaying the publication of the accounts to try to avoid this loss. The devaluation itself has no effect on the club’s cashflow (although obviously not being in the premiership does affect our cash) but does increase accounting losses for they year.
This is just a thought, and may well be wrong.
What I find really scary is the idea that the HKSE might have used the courts to block the publication of the accounts. Surely they would only do this to protect investors (or, rather, HKSE’s reputation) which would suggest they are very worried about the validity of the information held in the accounts — which would kind of suggest to me that BIH might be in even bigger trouble than I had imagined. It is a big move for any stock exchange to block the publication of the accounts of a company floated on it.
Anyway, this is pure speculation and conjecture based on limited information
I should reinforce something from the article – there is absolutely no indication that the HKSE have taken to BIH to court to stop the publishing of their accounts – if anything, it seems to have been firmly DISPROVED that this has happened. I repeat, it’s not true.
I take your point regarding the block being requested by the HKSE to a court for BIH’s accounts.
Looking at the ‘announcement’ you kindly included in the above piece, would the points raised in a – d be a continuous point of contention, in that first CY’s arrest and subsequent charges have not been addressed by BIH. Next, due to the arrest, there is no proper control of the organisation in CY’s absence?? Then obviously they’re asking about the accounts not being published and the constant delays. The final point in (d) asks about having controls and systems in place regarding financial reporting.
I still believe all of this will either get ‘solved’ if CY is cleared, or it will be backs to the wall time if he gets convicted and then sent into custody. I realise that it cannot go on indefinitely, but without CY bankrolling BIH, the company is simply going to flounder and then eventually cease – unless of course one of the other directors wish to take it over. This will most likely only occur if (perhaps when) Blues are promoted at the end of the season.
Not being party to the machinations in producing the accounts, I can only hazard a guess in that, they are not being signed off by the auditors and being agreed, due to future funding issues if CY is not around. Is anyone prepared to pick up the tab if Blues were NOT promoted??