[baggiejohn]

We're going nowhere with this conversation. It's about as useful as officials for upcoming games. 😁

First of all HAPPY NEW YEAR

Personally, I've found the conversation useful (perhaps got a bit abrasive at times), but it's helped me to understand our situation better.

Although it would be good to have a new owner who we could trust, I'm not sure our situation is as dire as certain commentators would have us believe.

[overseas baggie]

So, the simple answer was yes, he could justify making a dodgy signing that fails.

This is a man who, it could be alleged laundered £7m on a nobody called Zhang Yuning, not from club funds, just from his disposable income in his more affluent days.

I'm a retired criminal defence duty solicitor, rarely dealing with white collar crime,  but what I do know, whatever the Companies Act says, these kinds of prosecutions are the hardest, most complex, most expensive cases to prosecute, yet you believe these subjective footballing decisions would be subject to criminal sanction?

I can tell  you that it would not be in the in public interest for the SFO or anyone else for that matter to pursue them. No one is going after Lai or Ken for anything, despite what the companies act says their duties are. It's all subjective and will not result in prosecutions if you ever got Lai extradited.

You are confusing “dodgy” (ie shady) with a non-shady one which fails.

That’s a dangerous accusation re Zhang because we still don’t know whether Lai used the club’s money or his own money to fund it.  The audited accounts have not accounted for it, so the likelihood is that he didn’t use club funds, and we may never know.

As a retired criminal lawyer you will of course know that getting a criminal conviction for a white collar crime has a very high barrier because the burden of the prosecution is to prove guilt beyond reasonable doubt, whereas a civil case requires mere balance kd probability.  Getting a director in a civil court to try to prove that the board decision was made in the best interests of the club is a tough challenge for directors re the Wisdom Smart loan.  The making of the loan and the commercial terms of the loan are totally indefensible.

I’ve not once suggested criminal action against Lai.  Civil action is the only way.

[overseas baggie]

The quick way to get a decision made either way would be to get this published over in China, respect and honour are massive over there and he would not want this loan to embarrass him personally and within business in China.

Spot on

[baggiejohn]

Club sits below Group in the structure, so Group owns 100% of club.  Group is the borrower from MSD, so Group is (a) answerable to MSD for how the money is used, and (b) is solely in control of providing any of this monies to Club.   The public statement is that the loan is purely for the requirements of the club, and Gourlay as CEO of Group has made it very clear that no money is leaving Club except for the needs of the Club.

The £5m loaned to Wisdom Smart doesn’t reduce the balance sheet because the loan asset remains on the balance sheet as a debtor.  However, if the loan ends up having to be written off as irrecoverable then it would disappear from the balance sheet, thereby reducing it, and would reduce reserves by £5m,  which is £5m less that can be paid out as dividends in future.

Selling players if value is the likeliest way to balance the books.

Yes, I meant in a default situation.

I agree that selling players could be an option, but even that doesn't have to be over one season does it?

[mateinone]

Christ, where shall I start.

Firstly you compare us to Man United and what the Glazers do. Are you oblivious to the fact that Manchester United are a public company, listed on the NYSE, unable to breathe without reporting it immediately to the market, and with an obligation to have all kinds of governance structures in place, with properly responsible NEDs?  While we are a private company with no such obligations?   

Secondly, with a tiny board of directors totally controlled by Lai, I doubt any journalist would find anything out without Lai knowing exactly who from the board would have leaked it.

Thirdly, Lai is not a director.  He has no legal capacity whatsoever to buy any players. All he can do is tell his stooges on the board to do it, but their first duty under company law is to the company itself ahead of anybody else. They are all aware that they are firmly under the microscope.   I’ve said on here many times that if anybody is determined to act incorrectly then they will, and they are exposed to the consequences.  It’s illegal to murder somebody but it doesn’t stop it happening, and it doesn’t mean that there aren’t consequences.

Fourthly, MSD will not have lent £20m to the club without very tight strings attached.  If money is syphoned out by Lai it would be an event of default and MSD would pull the plug and demand repayment, probably forcing the club into administration. Where does he benefit from that?

The parallel universe is yours, not mine.  I deal in company law and governance day in, day out, and have done for 40 years.  I’ve no idea what your background is but you very clearly aren’t familiar with any of this.

You are making a pretty big assumption yourself. Whilst of course MSD could put a number of caveats on their loan, there is absolutely no evidence (to my knowledge anyway, of course I could be wrong), that they have a clause preventing the club from loaning money out to any entities and I personally consider that is actually quite an unlikely clause. The company has physical assets including The Hawthorns as well as the training ground. These assets are listed as collateral in the loan agreement.

I don't imagine that we will buy another Chinese player and they will be somehow used as a way to funnel funds out of the club to Lai or his associates, but it also is not at all impossible for this to happen, as there it is highly improbable that there is any clause calling for an independent valuation of any players purchased.

I don't see the benefit of what seems like more personal attacks to get peoples points across here, when it seems most people are on the same page that Lai is terrible for the club and doesn't act in the interests of the club.

What I would like to see in general is a set of laws passed across all tiers of English Football around how clubs are run, because what is happening at our club right now is a train wreck, only salvaged by the incredible work of CC

[gazberg]

The quick way to get a decision made either way would be to get this published over in China, respect and honour are massive over there and he would not want this loan to embarrass him personally and within business in China.

Yep, got to keep his name in the lights as best we can and hope it makes it way there.

[BalisPen]

You are confusing “dodgy” (ie shady) with a non-shady one which fails.

That’s a dangerous accusation re Zhang because we still don’t know whether Lai used the club’s money or his own money to fund it.  The audited accounts have not accounted for it, so the likelihood is that he didn’t use club funds, and we may never know.

As a retired criminal lawyer you will of course know that getting a criminal conviction for a white collar crime has a very high barrier because the burden of the prosecution is to prove guilt beyond reasonable doubt, whereas a civil case requires mere balance kd probability.  Getting a director in a civil court to try to prove that the board decision was made in the best interests of the club is a tough challenge for directors re the Wisdom Smart loan.  The making of the loan and the commercial terms of the loan are totally indefensible.

I’ve not once suggested criminal action against Lai.  Civil action is the only way.

That's my point they got away with that loan with a mere £50k interest payment being agreed. It was shocking, but their duties to the company and the companies act didn't stop them doing it, our interests as a club were totally ignored and we have had little to spend since.

I am saying now with the £20m, if they have the intent to siphon money to China for a player, there is nothing to stop them again, if there is a football argument they can make to justify it.

Regarding Zhang it was always made clear the fee was from Lai's pocket, and my point is that kind of dubious transfer for an absolute nobody can easily happen again, but this time with the club's money.

In any event we all want the best for West Brom, let's all hope the money is used wisely to get us promotion and then Lai sells us to someone who finally loves this club like we all do.

Happy New Year to you and all other Baggies on here.

[costa blanca baggie]

The quick way to get a decision made either way would be to get this published over in China, respect and honour are massive over there and he would not want this loan to embarrass him personally and within business in China.

It would handy if we could, but I don't think they care for football there. Let alone a Championship club. We could burn the flag of China, and not one citizen there would see it.

[overseas baggie]

You are making a pretty big assumption yourself. Whilst of course MSD could put a number of caveats on their loan, there is absolutely no evidence (to my knowledge anyway, of course I could be wrong), that they have a clause preventing the club from loaning money out to any entities and I personally consider that is actually quite an unlikely clause. The company has physical assets including The Hawthorns as well as the training ground. These assets are listed as collateral in the loan agreement.

I don't imagine that we will buy another Chinese player and they will be somehow used as a way to funnel funds out of the club to Lai or his associates, but it also is not at all impossible for this to happen, as there it is highly improbable that there is any clause calling for an independent valuation of any players purchased.

I don't see the benefit of what seems like more personal attacks to get peoples points across here, when it seems most people are on the same page that Lai is terrible for the club and doesn't act in the interests of the club.

What I would like to see in general is a set of laws passed across all tiers of English Football around how clubs are run, because what is happening at our club right now is a train wreck, only salvaged by the incredible work of CC

As I said earlier, MSD have made loans to 4 clubs and I’ve seen the loan documents for two of those 4 loans.  The loan conditions are extremely tight. The last thing they will ever want to do is to hand to enforce their security over the assets, just as the last thing a mortgage lender wants to do is evict a defaulting borrower from their own home.

Totally agree with your last paragraph.  For a start, the “fit and proper persons test” should be an ongoing one, not just a single one at the time of trying to buy a club.

[overseas baggie]

That's my point they got away with that loan with a mere £50k interest payment being agreed. It was shocking, but their duties to the company and the companies act didn't stop them doing it, our interests as a club were totally ignored and we have had little to spend since.

I am saying now with the £20m, if they have the intent to siphon money to China for a player, there is nothing to stop them again, if there is a football argument they can make to justify it.

Regarding Zhang it was always made clear the fee was from Lai's pocket, and my point is that kind of dubious transfer for an absolute nobody can easily happen again, but this time with the club's money.

In any event we all want the best for West Brom, let's all hope the money is used wisely to get us promotion and then Lai sells us to someone who finally loves this club like we all do.

Happy New Year to you and all other Baggies on here.

As I have said ad nauseum, you can’t stop a questionable act happening. People speed when they drive. The consequences come later.  Who says they’ve “got away” with the loan with just £50k interest?  The only consequences will be if the minority shareholders  are forced to bring an action against the directors, and that realistically can only happen if actual loss has occurred.  If the loan somehow does get paid next week, then what would be the point of taking such action?

MSD will require them to submit quarterly and possibly monthly management accounts to show that they have not breached the terms of the loan.  If they do syphon money off then that would be an Event of Default and MSD then have the right to immediately call in the loan.  So no, it’s really not very likely at all.  If somebody in the club is stupid enough to commit an Event of Default, then it’s not possible to prevent it, but the consequences would be  immense.

Likewise a Happy New Year.  We may disagree on things but we certainly all want the right outcome!

[Baggiee_Boyy_Benn]

From Lewis Cox;

The Hawthorns is Albion's home. It has been since 1900, it should be making plans for an 125th anniversary, not fearing for its future. It has to be the home for another century. The club is not the club everybody loves without it.

Very sad.

[baggie82]

From Lewis Cox;

The Hawthorns is Albion's home. It has been since 1900, it should be making plans for an 125th anniversary, not fearing for its future. It has to be the home for another century. The club is not the club everybody loves without it.

Very sad.

I do not support the club taking on secured debt but at the same time I do not consider us to be clinging to financial life. Then again, without an up to date balance sheet and set of accounts we are left to speculate, to a degree. But knowing what we do about our income and expenditure I think it is over the top to be worrying too much about our future. The club continues to be run very conservatively. We are not Derby County - even if Lai places his own interest above the football club.

[Baggiee_Boyy_Benn]

I do not support the club taking on secured debt but at the same time I do not consider us to be clinging to financial life. Then again, without an up to date balance sheet and set of accounts we are left to speculate, to a degree. But knowing what we do about our income and expenditure I think it is over the top to be worrying too much about our future. The club continues to be run very conservatively. We are not Derby County - even if Lai places his own interest above the football club.

The fact he has deferred on the loan twice.

The fact he’s just got a 20million loan.

Says we are not in the greatest of places financially.

[NJS]

The quick way to get a decision made either way would be to get this published over in China, respect and honour are massive over there and he would not want this loan to embarrass him personally and within business in China.

All media in China are tightly under Communist Party control. 

https://airpowerasia.com/2020/07/30/chinese-communist-party-control-over-media-a-comprehensive-assessment/

Even if there might be a crack in the Chinese firewall to get a story through on TikToK, I doubt if anyone would be interested.  We're a small country thousands of miles away and currently they have their own problems.

I've found this thread to be very informative.  My take is that Guochuan is in financial difficulties following China's lockdown policies and massive overreach across the construction sector.  WBA is just one more problem he has made for himself.  He won't come over here because he's too busy fighting fires in Shanghai.

All we can do is urge S4C to keep a close and noisy watch on the directors of WBA Group and make sure that UK company law is observed here.  The Wisdom Smart loan seems to be a good place to start.

[skyclad99]

The fact he has deferred on the loan twice.

The fact he’s just got a 20million loan.

Says we are not in the greatest of places financially.

The club have secured the £20m loan, not Lai. It is on record that the loan will be used to run the club so we have to take their word for it.

We are clearly running on a tight ship, and personally I think that failure to get promotion this year will be disastrous for us financially. I don't think he intends to pay the loan back anytime soon, and I wouldn't be surprised if he intends to 'pass it on' like jersey boy did.

I will agree with you that we are not in a good place financially, and I do not see us splashing the cash in this transfer window, unless we offload first. 

[paulosull]

Just listened to Kieran Maguire on Baggies podcast from a few days ago and he is slightly bemused by owner needing loan for day to day running costs of club when parachute payment of £30 plus million was available this season.

[johnny Cash]

I do not support the club taking on secured debt but at the same time I do not consider us to be clinging to financial life. Then again, without an up to date balance sheet and set of accounts we are left to speculate, to a degree. But knowing what we do about our income and expenditure I think it is over the top to be worrying too much about our future. The club continues to be run very conservatively. We are not Derby County - even if Lai places his own interest above the football club.

I do agree.  I have said I think this could end badly but for me, badly is becoming becoming a hopeless championship team (at worse relegation to league one) rather than completely goong out of business.  That would need further poor decisions to compound things. You could argue we were only 2 years from that happening anyway.

The loan could pay off if used for a couple of smart signings.

[timdon]

The club have secured the £20m loan, not Lai. It is on record that the loan will be used to run the club so we have to take their word for it.

We are clearly running on a tight ship, and personally I think that failure to get promotion this year will be disastrous for us financially. I don't think he intends to pay the loan back anytime soon, and I wouldn't be surprised if he intends to 'pass it on' like jersey boy did.

I will agree with you that we are not in a good place financially, and I do not see us splashing the cash in this transfer window, unless we offload first.

It is also on record that Lai's loan would be repaid by yesterday. It means absolutely zilch and we would be extremely gullible if we took their word for it. Personally I'm now at the stage where I only believe something this club says when it actually comes to fruition.

[baggiejohn]

Just listened to Kieran Maguire on Baggies podcast from a few days ago and he is slightly bemused by owner needing loan for day to day running costs of club when parachute payment of £30 plus million was available this season.

After this season,our income will consist of around £7 million from gate receipts, around £1.5 million from merchandising & around £10 million to £15 million from media, so about £23/24 million max.
In addition, we owe Huddersfield, for Grant, another £7.5 million (at £2.5 million a year for the next 3 years)
The loan is £20 million over 4 years, so at least a third of it will be spent on Grant's transfer fee.
The rest will probably be spent on player wages.

[paulosull]

After this season,our income will consist of around £7 million from gate receipts, around £1.5 million from merchandising & around £10 million to £15 million from media, so about £23/24 million max.
In addition, we owe Huddersfield, for Grant, another £7.5 million (at £2.5 million a year for the next 3 years)
The loan is £20 million over 4 years, so at least a third of it will be spent on Grant's transfer fee.
The rest will probably be spent on player wages.

thanks for your figure’s but I believe we still owe instalments for Grady also, still a real concern if we are not a prem club when loan has to be paid back with interest of probably 15 percent or higher. Club’s assets which are ground and training facilities will be fair game.

[baggiejohn]

thanks for your figure’s but I believe we still owe instalments for Grady also, still a real concern if we are not a prem club when loan has to be paid back with interest of probably 15 percent or higher. Club’s assets which are ground and training facilities will be fair game.

I believe the Diangana deal was a straight purchase, using most of the budget.
That was why the Grant deal had to be structured.

As other posters have said, our most valuable assets are players, we have 4 players out of contract in June 2023, if the estimated wages are accurate, it's likely we could save around £4 million by not replacing them, only Kyle Bartley is a first team regular now.
IMO, the Hawthorns or other facilities are not at risk at the moment.

[overseas baggie]

Just listened to Kieran Maguire on Baggies podcast from a few days ago and he is slightly bemused by owner needing loan for day to day running costs of club when parachute payment of £30 plus million was available this season.

To me it’s really not about this season, it’s about next season and beyond.  But without obtaining a loan now, prudency re next year would mean that the rest of this season would be driven by both eyes on next season’s lack of cash.

[overseas baggie]

I believe the Diangana deal was a straight purchase, using most of the budget.
That was why the Grant deal had to be structured.

As other posters have said, our most valuable assets are players, we have 4 players out of contract in June 2023, if the estimated wages are accurate, it's likely we could save around £4 million by not replacing them, only Kyle Bartley is a first team regular now.
IMO, the Hawthorns or other facilities are not at risk at the moment.

I think that’s all correct.  There will hopefully come a time when selling Grant will be possible at a fee which would at least just about cover the final year’s installment.  When you look at the deals we did for Wallace, Swift and Yokuslu, those deals from Grant and Diangana look even worse!

[paulosull]

To me it’s really not about this season, it’s about next season and beyond.  But without obtaining a loan now, prudency re next year would mean that the rest of this season would be driven by both eyes on next season’s lack of cash.

thought board had stated that our final parachute payment was to be spread out into three years instead of two. So next season we should still be in receipt of monies, something fishy is going on if club are bleeding daily finances and could this be a breach of financial fair play?

[gazberg]

I think that’s all correct.  There will hopefully come a time when selling Grant will be possible at a fee which would at least just about cover the final year’s installment.  When you look at the deals we did for Wallace, Swift and Yokuslu, those deals from Grant and Diangana look even worse!

The Bilic and Dowling feud was extremely damaging and costly for a club like ours.