Birmingham City v Everton: Premier League monitor financial position of Carson Yeung's club
The Premier League is closely monitoring Birmingham City after concluding that the club’s financial position gives cause for concern.
Happy days: Birmingham City captain Stephen Carr parades the Carling Cup, which opened the door to Europe Photo: GETTY IMAGES
By Sandy Macaskill 7:00AM GMT 09 Mar 2011
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It has also privately expressed unease at attempts by the Birmingham board to distance themselves from their parent company, Birmingham International Holdings.
The move comes despite a vigorous defence of the club’s finances mounted by Peter Pannu, Birmingham’s acting chairman, who maintains that BIH, the investment vehicle through which Carson Yeung bought the club in 2009, is a “distant subsidiary” whose finances are irrelevant to Birmingham’s health. The League, however, takes the view they are “intrinsically linked”.
Birmingham’s finances have again come under scrutiny after a statement made to the hong kong stock exchange last week revealed “the existence of a material uncertainty that may cast significant doubt” on the ability of BIH to continue as a going concern. BIH owns 96 per cent of Birmingham City plc, which in turn owns Birmingham City Football Club.
Although Yeung’s advisers have tried to play down the significance of the statement, latest disclosures to the stock exchange showed that the Hong Kong businessman had applied for a £12 million loan to prevent a “significant curtailment” to the operations of the Birmingham’s parent company.
Recent accounts published by the club, meanwhile, showed that Birmingham has debts of more than £29m, of which £23m is owed to HSBC. The club’s freehold land and buildings, including St Andrew’s stadium, have already been pledged to the bank.
Yeung is trying to raise £25.5m through a share placement, originally due to be completed by the end of last November, but now extended until March 25. In the meantime, the 51 year-old has applied for a credit facility line of £11.8m using one of his own properties in Hong Kong as collateral.
It has triggered concern at the Premier League. Under disclosure rules brought in after the collapse of Portsmouth last year, Birmingham will need to provide written assurance that they can meet their liabilities for the year ahead and that loans will not be called in.
Failure to do so could lead to a transfer embargo, a ban on player contracts being extended or improved, or even the enforced sale of players.
The uncertainty has also prompted suggestions that Birmingham’s place in Uefa’s Europa League next season, secured by defeating Arsenal in the Carling Cup final, could be in jeopardy unless they can prove their future is secure, but Birmingham’s board have insisted that concerns raised about the BIH are irrelevant to the club’s wellbeing.
Ahead of a crucial fixture for Alex McLeish’s side against Everton this evening, Pannu insisted that Birmingham rely solely on owner Carson Yeung for funds.
“Our finances are fine,” Pannu told Telegraph Sport. “We are reliant on Carson’s money, not BIH. We do not borrow money from BIH.
"We borrow money directly from Carson. He is effectively like a bank to us. He has promised us that he will give us money for players and he will not ask for the money back.
“If I need money, I go to Carson. Carson has never said no to me any time I have asked him for money. He has paid £31m for players. When I need to top up, I will go to him.
"It is exactly the same situation at the other clubs in the Premier League. Aston Villa rely on Randy Lerner, Wolves rely on Steve Morgan. But I don’t need money for anything other than players. We are in credit with our bank right now.”
Meanwhile, David Moyes has said that Everton are not giving up on the idea of joining Birmingham in Europe next season. “I said when I joined that I thought the club needed Europe.
"I needed it, the players needed it. We were trying to attract a level of player that would want to play in Europe. I have got to say it looks a long way off because we have not got close.
"But it is there for anyone. We have won three out of four in the league and that is not bad. If it became four out of five, people will say Everton are ticking along. Maybe we are coming up on the rails.”
Probable teams
Everton (, 4-4-1-1): Howard; Neville, Jagielka, Distin, Baines; Coleman, Arteta, Rodwell, Bilyaletdinov; Osman; Beckford.
Birmingham City (probable, 4-4-2): Foster; Carr, Johnson, Davies, Murphy; Larsson, Ferguson, Bowyer, Beausejour; Jerome, Martins.
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