[Standaman]

Article in the Express & Star confirming the latest developments.

Albion shareholders have set director Xu Ke a deadline of one week to provide operational and financial answers before taking on legal action.


Fed-up Albion shareholders have set WBA Group director Xu Ke a deadline of next Tuesday, June 6 to come up with answers related to the operational and financial running of the club – before warning of legal action.

Shareholders for Albion (S4A), who represent many of the minority shareholders who own 12 per cent of the Baggies, are in a dispute with Ke (Ken) over undisclosed details.

And fed-up and frustrated minority shareholders have set a time of 4pm next Tuesday, June 6, for Ken to respond with the "substantive and meaningful responses required".

Should Ken, who is based in the West Midlands, continue with his stance of not disclosing information related to club, WBA Group and WBA Holdings accounts, including controversial loans, then S4A have warned they will take "necessary legal steps".

This latest communication comes after the shareholders sought legal advice on the director's silent approach.

At the beginning of May S4A sent Ken, sole director of WBA Group, a 38-question dossier requesting further information on several fronts, many featured in the latest set of accounts, to June 2022.

The part owners believe they, as shareholders at whatever level, have a right to such information but that has been refuted by the director in his latest communications to S4A members, seen by the Express & Star.

Ken’s refusal to answer the points has already been reported and now it can be revealed an extract from a letter from the director dated May 12 reads: “As I set out in my letter to you of 15 September 2022 in relation to your questions on the 2021 accounts, shareholders of English companies are not entitled to the type of detailed information in relation to business operational matters...Many of the questions you raise are about issues that are subject to confidentiality obligations.”

That point is strongly contested by minority shareholders – and S4A sounded out legal advice as they continued to argue the case; they are privy to such detail, as Ken continues to not permit an AGM.

Shareholders have revealed to the Express & Star their fury is ever increasing at a situation they have described as “farcical”.

The letter from Ken confirmed that in the director’s recent visit to China where he met with controlling shareholder Guochuan Lai he delivered a letter from pressure group Action for Albion jointly co-signed by various Albion supporter groups to the chairman.

He added he “awaits further information” from Lai.

Shareholders are desperately chasing information and answers from the absent Lai, and more likely representative at The Hawthorns Ken, after the publication of the accounts to June 2022 were published in early April.

Should Albion struggle to raise funds through player sales this summer, the club was described as “a material uncertainty” in the accounts.


Ken was also asked, once again, when the £5million – plus interest – loan Lai took from Albion to his company Wisdom Smart Ltd would be repaid. That loan was confirmed as impaired to nil in a statement after several repayment deadlines passed, the last of which was “early in the new year”.

The club are owed at least £10m by Lai and with a lack of any investment a £20m loan from private equity firm MSD Holdings was taken, at an interest rate of around 14 per cent, to cover for parachute payments, which finish this summer. The annual interest of this is estimated to cost the Baggies around £2.8m.

Shareholders also wish to know that, if Ken received professional advice for his response to S4A’s questions, whether such advice was in the interests of the controlling shareholder, or the club who are fighting uncertainty while owed millions



A few observations here

1. I don't know how well funded on S4A are but the legal fees on this could get quite chunky.

2. Ken can claim commercial confidentiality on some of the questions asked, however on the broader question of current trading position the shareholders should have the right to know, especially as MSD certainly will be supplied with that information.

3. You will be shocked as to how few rights that minority shareholders have. Although with 5% of the shareholding minority shareholders can call an EGM, as S4A haven't done that I suspect they don't represent 5% of the shareholdings.

4. They can under the 2006 company's act apply for "relief"  if the Company's actions are "unfairly prejudicial to the member's interests as a member.  And an actual or proposed act or omission of the company is or would be so prejudicial.” My view is the loan to an associated party of the majority shareholder and in particular it's subsequent none payment is extremely prejudicial to the interests of the member. However what the legal remedy is I am not sure and nor am I sure as to how much it would cost to get that judgement.

[timdon]

Stan (or indeed anyone else), do you know if they have, or plan to, set up a crowd funding site to help with the legal costs? I'm sure that's the way forward for them as I and I'm sure many many more would be happy to contribute. I also wouldn't be surprised to see contributions coming in from fans of other clubs

[Standaman]

I don't think they do but S4A's website is http://s4a.org/

Action for Albion a separate but aligned fan group does have a go fund me page  https://www.gofundme.com/f/action-for-albion

[Baggie79]

The thing that is totally useless is the threat of legal action, it would take years for that to be settled and hopefully they will be gone by then. Also they have more money than S4A to undertake a lengthy and very expensive legal battle. They won't care about S4A and certainly not A4A, unfortunately they will only go when they are ready.

[baggies_24]

The thing that is totally useless is the threat of legal action, it would take years for that to be settled and hopefully they will be gone by then. Also they have more money than S4A to undertake a lengthy and very expensive legal battle. They won't care about S4A and certainly not A4A, unfortunately they will only go when they are ready.

Agree with you on this, it would be nice if they could put that money into the club though rather than using it to fight a legal battle all the while looking for new creative ways to take money out of the club.

[Standaman]

The thing that is totally useless is the threat of legal action, it would take years for that to be settled and hopefully they will be gone by then. Also they have more money than S4A to undertake a lengthy and very expensive legal battle. They won't care about S4A and certainly not A4A, unfortunately they will only go when they are ready.

I can see where  you are coming from.  Yet I disagree fans need to make things as uncomfortable as possible for the owners so when the opportunity arises to bail out they take it.

[tambag]

The thing that is totally useless is the threat of legal action, it would take years for that to be settled and hopefully they will be gone by then. Also they have more money than S4A to undertake a lengthy and very expensive legal battle. They won't care about S4A and certainly not A4A, unfortunately they will only go when they are ready.

I agree the legal battle would a long one but I don't think they have a pot to p*** in, so wouldn't want the legal bills either. 

Fingers crossed they are gone very quickly. 

[SmethDan]

I agree the legal battle would a long one but I don't think they have a pot to p*** in, so wouldn't want the legal bills either. 

Fingers crossed they are gone very quickly.

I think I'm right in saying they paid their last lot of legal fees from Group's coffers, not their own.

[skyclad99]

The thing that is totally useless is the threat of legal action, it would take years for that to be settled and hopefully they will be gone by then. Also they have more money than S4A to undertake a lengthy and very expensive legal battle. They won't care about S4A and certainly not A4A, unfortunately they will only go when they are ready.

When you think about it, what S4A are doing is another form of protest akin to what A4A are doing. I don't for one second think that the threat of legal action is an empty threat, and you can see from the structure and tone of their letter that S4A mean business. I have said from the start that the request is formatted legally and is the start of a process. That is corroborated by the fact that a deadline for a response has now been put in place.
I will also point out that we know very little about S4A, and we are certainly not privy to their financial affairs, so let's not assume that they cannot afford this fight. To me they seem determined and have a point to prove.
I think Lai & co will be bothered about S4A as they are asking awkward questions, and unlike A4A they cannot be ignored.

[tuamigos]

Is he still here?

[baggiejohn]

When you think about it, what S4A are doing is another form of protest akin to what A4A are doing. I don't for one second think that the threat of legal action is an empty threat, and you can see from the structure and tone of their letter that S4A mean business. I have said from the start that the request is formatted legally and is the start of a process. That is corroborated by the fact that a deadline for a response has now been put in place.
I will also point out that we know very little about S4A, and we are certainly not privy to their financial affairs, so let's not assume that they cannot afford this fight. To me they seem determined and have a point to prove.
I think Lai & co will be bothered about S4A as they are asking awkward questions, and unlike A4A they cannot be ignored.

From recollection, earlier on in this topic, someone cast doubts on the wisdom of querying the Periera  sale in the letter.
Most of the other questions were reasonable & IMO, could have been answered without creating a conflict of confidentiality.

Personally think it might have been better to hold the Periera question back.

[skyclad99]

From recollection, earlier on in this topic, someone cast doubts on the wisdom of querying the Periera  sale in the letter.
Most of the other questions were reasonable & IMO, could have been answered without creating a conflict of confidentiality.

Personally think it might have been better to hold the Periera question back.

Here is the question:

2. Concern remains as to the level of transfer fee negotiated for the sale of Matheus Pereira in the summer of 2021, particularly given his very healthy contractual situation at that time and the transfer fees of players at the same time of equivalent or arguably less ability.

An example of this being Emiliano Buendia's transfer from Norwich City to Aston Villa (had not played at Premier League level). The reported transfer fee for Pereira (by then an already proven and recognised Premier League performer) being circa £17-18m and (up to) £38m for Buendia respectively.

This has always seemed very odd to say the least. The reported fallout between (the Head Coach) Valerien Ismael and Matheus Pereira around that time is noted, but that does not account for such a discrepancy.

Subsequent transfer fees for players of equivalent or lesser ability add further weight to concerns on the reported level of the fee actually received by club.

Accordingly, please could the directors of club confirm:

a. Whether or not any payments over and above any transfer fee received by the Club were made directly by Al Hilal SFC or any other party at any time directly or indirectly to any individuals or entities within the controlling shareholders of Group or any other parties as part of the transfer of Matheus Pereira and whether or not any such payments are due to be made at any time.

b. Ditto, for any other form of consideration or business arrangement for money's worth, rather than money.


I know what you mean but it may be that they know something and are trying to corner Lai & Ken. It’s a difficult question, or it can be as simple as ‘no’. It’s not just a ‘why did we sell him so cheaply’ , it is quite a structured question. Of course if there is nothing to hide……

[baggiejohn]

Here is the question:

2. Concern remains as to the level of transfer fee negotiated for the sale of Matheus Pereira in the summer of 2021, particularly given his very healthy contractual situation at that time and the transfer fees of players at the same time of equivalent or arguably less ability.

An example of this being Emiliano Buendia's transfer from Norwich City to Aston Villa (had not played at Premier League level). The reported transfer fee for Pereira (by then an already proven and recognised Premier League performer) being circa £17-18m and (up to) £38m for Buendia respectively.

This has always seemed very odd to say the least. The reported fallout between (the Head Coach) Valerien Ismael and Matheus Pereira around that time is noted, but that does not account for such a discrepancy.

Subsequent transfer fees for players of equivalent or lesser ability add further weight to concerns on the reported level of the fee actually received by club.

Accordingly, please could the directors of club confirm:

a. Whether or not any payments over and above any transfer fee received by the Club were made directly by Al Hilal SFC or any other party at any time directly or indirectly to any individuals or entities within the controlling shareholders of Group or any other parties as part of the transfer of Matheus Pereira and whether or not any such payments are due to be made at any time.

b. Ditto, for any other form of consideration or business arrangement for money's worth, rather than money.


I know what you mean but it may be that they know something and are trying to corner Lai & Ken. It’s a difficult question, or it can be as simple as ‘no’. It’s not just a ‘why did we sell him so cheaply’ , it is quite a structured question. Of course if there is nothing to hide……

Yes, I get that, but sometimes it's a matter of timing, seems to me that they've shown their hand all in one go.

[skyclad99]

Yes, I get that, but sometimes it's a matter of timing, seems to me that they've shown their hand all in one go.

I think it is a line in the sand John, for me the question was asked for a reason. Hopefully we will all find out in due course.

[boinging_along]

Based off the evidence from the sting video that was realeased it's a reasonable question but there's no way the club would own up and go "yeah, we did a dodgy deal there, you've got us".  It'll be "that was the market value", "that was the offer on the table", etc

[webral]

I've always been skeptical of the fee amount received for Pereira by the club. If there is any inside knowledge leading to the question being asked, hopefully it comes to light.

[SmethDan]

Based off the evidence from the sting video that was realeased it's a reasonable question but there's no way the club would own up and go "yeah, we did a dodgy deal there, you've got us".  It'll be "that was the market value", "that was the offer on the table", etc

While the wages reportedly on offer to Pereira made things extremely difficult for us it clearly wasn't the market value though. Not given what the Vile paid for Buendia and what we eventually committed to paying Huddersfield for Grant once the fishy ones went for Watkins too.

The political infighting between Dowling and Bilic has been done to death as has Lai's questionable at best tenure. But there's no way (in my eyes at least) they could use market value as a creditable defence on Pereira. No way at all and I know that you're not.

It would be like suggesting Buendia was twice the player of Pereira and Grant was worth more to us as a club than our former Brazilian playmaker. They'd be better off suggesting that despite parachute payments we were completely skint post Covid and naively snatched at the first tangible bid.

[NJS]

I think I'm right in saying they paid their last lot of legal fees from Group's coffers, not their own.

Exactly this.  As  I understand it, if S4A start legal proceedings against Ken Xu (Director of Group) then he might be entitled to use Group money for his legal expenses.  We need to restrict any action to those alleged transgressions that can be laid squarely at WBA Holdings door.

[baggiejohn]

Exactly this.  As  I understand it, if S4A start legal proceedings against Ken Xu (Director of Group) then he might be entitled to use Group money for his legal expenses.  We need to restrict any action to those alleged transgressions that can be laid squarely at WBA Holdings door.

Think there could be a problem there, don't S4A only have a legitimate interest in the Group & Football Club companies?

[baggie82]

While the wages reportedly on offer to Pereira made things extremely difficult for us it clearly wasn't the market value though. Not given what the Vile paid for Buendia and what we eventually committed to paying Huddersfield for Grant once the fishy ones went for Watkins too.

The political infighting between Dowling and Bilic has been done to death as has Lai's questionable at best tenure. But there's no way (in my eyes at least) they could use market value as a creditable defence on Pereira. No way at all and I know that you're not.

It would be like suggesting Buendia was twice the player of Pereira and Grant was worth more to us as a club than our former Brazilian playmaker. They'd be better off suggesting that despite parachute payments we were completely skint post Covid and naively snatched at the first tangible bid.

The club is never going to get into a debate with fans or shareholders about their decisions in the transfer market.

I agree that Pereira was worth far more than £18m, and had we been serious about promotion we would have kept him in lieu of bids worth around twice that sum. He was under a long term contract, so the club could have still sold him for a large sum a year later had we failed to go back up. Of course all of this is in the backdrop that there is actual evidence that the board we trying to sell him with a part payment off the books in the prior January window to funnel some of the proceeds out of the club to Lai - completely illegal. That was a sensational story. Dowling directly fingered Ken in that, claiming the scheme to avoid tax, funnel payments to Lai and to break fifa regulations was presented by Ken. In that context we can have no faith in the actions that followed.

[mulliganstired]

The club is never going to get into a debate with fans or shareholders about their decisions in the transfer market.

I agree that Pereira was worth far more than £18m, and had we been serious about promotion we would have kept him in lieu of bids worth around twice that sum. He was under a long term contract, so the club could have still sold him for a large sum a year later had we failed to go back up. Of course all of this is in the backdrop that there is actual evidence that the board we trying to sell him with a part payment off the books in the prior January window to funnel some of the proceeds out of the club to Lai - completely illegal. That was a sensational story. Dowling directly fingered Ken in that, claiming the scheme to avoid tax, funnel payments to Lai and to break fifa regulations was presented by Ken. In that context we can have no faith in the actions that followed.

They say follow the money.  Where is it then?

[baggiejohn]

The club is never going to get into a debate with fans or shareholders about their decisions in the transfer market.

I agree that Pereira was worth far more than £18m, and had we been serious about promotion we would have kept him in lieu of bids worth around twice that sum. He was under a long term contract, so the club could have still sold him for a large sum a year later had we failed to go back up. Of course all of this is in the backdrop that there is actual evidence that the board we trying to sell him with a part payment off the books in the prior January window to funnel some of the proceeds out of the club to Lai - completely illegal. That was a sensational story. Dowling directly fingered Ken in that, claiming the scheme to avoid tax, funnel payments to Lai and to break fifa regulations was presented by Ken. In that context we can have no faith in the actions that followed.

Not sure there's "actual evidence", there were accusations, that were verified by Dowling.

Agree, the accusations caused serious doubt about the honesty of our owners, but if there was evidence, I would have thought actions would have brought against Lai from both football & government authorities.

[overseas baggie]

Think there could be a problem there, don't S4A only have a legitimate interest in the Group & Football Club companies?

A loan made by Club to Holdings to enable Holdings to pay its own legal fees I’d say has every reason to be challenged by minority shareholders

[overseas baggie]

Not sure there's "actual evidence", there were accusations, that were verified by Dowling.

Agree, the accusations caused serious doubt about the honesty of our owners, but if there was evidence, I would have thought actions would have brought against Lai from both football & government authorities.

Pereira had the club over a barrel when he found out that was being set up.  At that point he could effectively force a sale to wherever he wanted to get the most money.  Whilst he had time left on his contract I don’t think we had a leg to stand on (in reality) if we had refused him a sale to Saudi and made him stay or take a much lower wage with a sale to a PL club for what he was really worth.

[tambag]

A loan made by Club to Holdings to enable Holdings to pay its own legal fees I’d say has every reason to be challenged by minority shareholders

I agree with the action S4A are taking the only problem is any action taken by S4A will be action against the club and any firm that is taken to court will use its own money to defend itself.