Wigan Athletic: WTF?

[Uilleam 5,929]

Brutal and bizarre: the story of how Wigan collapsed into administration

On the day Au Yeung took ownership after a £41m purchase he decided not to fund the club, and an investigation is now due

David Conn

Thu 2 Jul 2020 17.23 BSTLast modified on Thu 2 Jul 2020 22.00 BST

 

https://www.theguardian.com/football/2020/jul/02/story-of-how-wigan-collapsed-into-administration-au-yeung-investigation

 

The brutal, bizarre collapse of Wigan Athletic has raised many glaring and alarming questions, but one central contradiction lies in the ruins. The Championship club have become the first to fall into administration during the Covid-19 crisis which could claim many more, but Wigan’s own insolvency has little to do with the coronavirus shutdown.

It is one of the most unlikely and baffling scenarios ever thrown up even among the frequently outlandish sagas of football’s relationship with money.

Wigan go into administration four weeks after Hong Kong takeover

 

Wigan, formerly the epitome of traditional football club ownership by a wealthy local benefactor, are bust 19 months since the retail magnate Dave Whelan sold to International Entertainment Corporation, which he hoped would safeguard his legacy. Even at the time, it seemed an unlikely fit: Whelan, the former footballer, acme of Lancashire man-made-good, selling his home-built club to a company based in Hong Kong, registered in the Cayman Islands tax haven, which runs a casino in Manila.

 

The administrator Gerald Krasner, of Begbies Traynor, said on Thursday that once they have overcome the pressing challenge of completing Wigan’s six remaining matches, they will investigate the bewildering circumstances of the administration itself. IEC, listed on the Hong Kong stock exchange, announced as recently as 29 May that it had sold Wigan, for £17.5m – even showing a profit on the £15.9m they paid Whelan in November 2018. IEC stated that on the same day, less than five weeks ago, the £24.6m it had put into Wigan, funding players’ wages and heavy losses, had been repaid in full.

 

The club announced the takeover on 4 June, by Next Leader Fund, also based in Hong Kong and registered in the Cayman Islands. Supporters were told “the support from owners” would help the club through the current crisis. A new director, Au Yeung, said he was “excited to join the Wigan Athletic family”, that he looked forward to working with the board and staff, and: “Most importantly I hope to meet the club’s passionate fans.”

 

Initially the Hong Kong businessman Dr Choi Chiu Fai Stanley, chairman of IEC, owned more than 50% of both the seller, IEC, and the buyer, NLF. But then on 24 June – just last week – Au Yeung, initially a minority shareholder in NLF, was stated to have become the owner of more than 75%; he is thought to be the 100% owner: a complete takeover from IEC.

 

The EFL is understood to have approved both the initial NLF takeover and Au Yeung’s, so the Wigan calamity again raises questions over its vetting processes. The rules only require a buyer to show that they have the money to fund a club – not to actually provide that money, a bond, or insurance, to ensure the funding is there.

On that very same day, last Wednesday, according to Krasner, Au Yeung’s UK lawyers approached Begbies Traynor potentially to be administrators. No further money would be provided – the Wigan directors had projected that £6m was needed for future funding – and the club was going to be put into administration. The club directors are said to have had no notice of this until Tuesday. The insolvency practitioners were appointed on Wednesday morning, for a club newly taken over but suddenly bust, with a Championship-sized wage bill and at least £6m owed to non-football creditors, Krasner has estimated.

In Wigan, little is known of Au Yeung apart from the note in IEC’s sale document which stated he “has relevant experience in business operations management and business leadership as he has worked in commodity and real estate investment management in Asia”. Also that he “has been operating an amateur football team for more than 15 years, winning several awards”.

So, the facts as set out are that in the middle of the coronavirus crisis, while football was still shut down and many clubs fear going out of business, Au Yeung decided to buy Wigan Athletic, a club which even in normal times loses millions of pounds. At first in partnership with Choi, he paid £17.5m, giving IEC more than they paid for the club, and also ensured their £24m loan was repaid. But then, on the day he took ownership after this £41m purchase, he decided not to fund it and to put the club into administration, so losing control, the £17.5m, and probably the £24m too.

 

No explanation has been provided for this remarkable whirl of events. IEC noted when selling to NLF that the Championship’s punishing finances were the key reason for cutting their losses. But Au Yeung has not explained why he decided it was worth £41m to have a go at Wigan, then immediately dropped the club and put it into administration.

Krasner was asked whether he believed the sale could have been orchestrated by IEC, effectively to take Wigan off its books before it was dumped. He replied: “We have not started the investigation yet; we are aware of concerns that have been raised … Once I know that we have saved the club, all our resources will be put into [an investigation].”

IEC did not respond to questions from the Guardian about the sale to Au Yeung, and Au Yeung’s UK lawyers declined to comment.

Meanwhile Wigan, famously built up by Whelan for 23 years from League Two to the Premier League and 2013 FA Cup glory, are in wreckage, having being taken over, then put into administration, in a week.

 

[Scott7 6,002]

Hmmm. Beware of investment from the east.

 

Genuine question. Why would anyone want to buy Wigan Athletic? A freak Wimbledonish cup win and that’s it. Think Wigan, think Rugby League. 
 

[compo 7,030]

Sounds like a chink version of our own Craig White 

[Uilleam 5,929]

32 minutes ago, Scott7 said:

Hmmm. Beware of investment from the east.

 

Genuine question. Why would anyone want to buy Wigan Athletic? A freak Wimbledonish cup win and that’s it. Think Wigan, think Rugby League. 
 

 

I have no idea, but I think that I can say, with some confidence, that someone, smoewhere -not Lancs- is at the Madam.

Check this from today's Times:

 

League chief Rick Parry’s gaffe over Wigan Athletic

EFL chairman discusses bet rumour with fan

Matt Lawton, Chief Sports Correspondent

Friday July 03 2020, 12.01am, The Times

 

https://www.thetimes.co.uk/edition/sport/league-chief-rick-parrys-gaffe-over-wigan-athletic-6sm2fptgc?utm_source=newsletter&utm_campaign=newsletter_111&utm_medium=email&utm_content=111_9841707&CMP=TNLEmail_118918_9841707_111

 

The comments could be a source of serious embarrassment for Parry

 

Rick Parry has been involved in an astonishing conversation with a Wigan Athletic fan during which the chairman of the English Football League said there was a rumour that the club’s administration was linked to “a bet in the Philippines on them being relegated”.

Four weeks ago Wigan were sold from one Hong Kong-based company to another, both of which were until recently majority-owned by the same businessman and a high-stakes professional poker player, Dr Choi Chiu Fai Stanley.

 

Au Yeung Wai Kay, a Chinese businessman, has since replaced Dr Choi as the majority shareholder of Next Leader Fund, which purchased the club from International Entertainment Corporation (IEC), a Hong Kong-based, Cayman Islands-registered company, on June 2.

But news has emerged this week that the Sky Bet Championship club is now facing a 12-point deduction after being put into administration because the owners are now refusing to invest any more money.

 

That prompted a supporter, who claims to live in Parry’s road in a village in Cheshire, to seek an explanation from the EFL chairman. The fan, who asked not to be named, told The Times last night that he managed to catch Parry as he returned home in his car.

 

In a video that was posted last night on Twitter, which shows only his feet, Parry says: “There are all sorts of rumours. There’s rumours that there is a bet in the Philippines on them being relegated because the previous owner has got gambling interests in the Philippines.”

 

The comments could be a source of serious embarrassment for Parry, 65, a former Premier League and Liverpool chief executive who became chairman of the EFL last year, raising questions about how wise he was to have such a sensitive conversation with a fan on the street. The EFL confirmed last night that Parry had engaged with a fan but was unaware he was being filmed outside his home. A statement from the EFL said: “The EFL is aware of a video of its chairman posted on social media this evening that discusses recent developments at Wigan Athletic.

“It was part of a much wider and impromptu discussion he was having with a Wigan supporter he does not know but who lives in the same area.

“The private conversation focused around the events of the last 24-48 hours, how the EFL can assist and what happens next. The various rumours and reports that have been circulating throughout today were also discussed.

“Whilst the chairman was unaware he was being filmed, he was happy to engage in the debate and appreciates this is a concerning and challenging time for all those associated with the club.”

[Uilleam 5,929]

Only 75 per cent chance Wigan will finish season, says administrator

Matt Lawton, Chief Sports Correspondent

Friday July 03 2020, 12.01am, The Times

 

https://www.thetimes.co.uk/edition/sport/only-75-per-cent-chance-wigan-will-finish-season-says-administrator-tgdltnxcd

 

Wigan, who are 14th in the Championship, are facing a 12-point deduction that would leave them bottom of the league

 

The administrator for Wigan Athletic has admitted there is no guarantee that the players and staff will be paid today amid fears that the club could follow Bury in losing its Football League status.

Gerald Krasner, who is one of three administrators, also said that there was only a “75 per cent chance” that the Championship side would be able to fulfil its remaining six fixtures because of the challenge of finding cash to meet running costs.

 

Four weeks ago Wigan was sold by one Hong Kong-based company to another, both of which were, until recently, majority-owned by the same businessman and professional poker player, Dr Choi Chiu Fai Stanley.

Krasner said he is now dealing with the English lawyers of the owners and would be leading an investigation into the circumstances that led to the club being put into administration this week. He said he expects to uncover evidence that will explain why the new owners, Next Leader Fund, have taken the club to the brink of financial ruin.

 

It was in November 2018 that the former chairman Dave Whelan sold the club to International Entertainment Corporation (IEC), a Hong Kong-based, Cayman Islands-registered company, for £15.9 million. Last month, however, IEC sold the club to Next Leader Fund, another Hong Kong-based consortium, for £17.5 million, plus repayment of £24.36 million the company had invested in the club. Au Yeung Wai Kay, a Chinese businessman, has since replaced Dr Choi as majority shareholder.

IEC documents seen by The Times suggest that the loan has been repaid but Krasner said he remained unclear on that subject.

 

A measure of just how dire a situation Wigan are now in, Krasner explained, was the fact that there was a panic around the insurance of the players before their game with Stoke City this week. Krasner did, however, say that the issue has been resolved.

Asked how a club can be put into administration only four weeks into new ownership, Krasner said: “I think that’s a first and that will have to be looked at.

“But my priority is to get this club sold and get them to the end of the season. Every administration I’ve been involved in has had its peculiarities but I think four weeks is a record. The owners have said they are not putting any more money in.”

Krasner said he already has “12 interested parties” and will be distributing non-disclosure agreements and seeking proof of funds. The club could be acquired for £10 million, despite its assets, including the stadium and the training ground. Krasner also asked journalists on a video conference call to circulate his phone number and email details, such is the urgency.

 

Krasner said he hoped to have a list down to two bidders “by the end of July” but said there was only a “75 per cent chance” of Paul Cook’s side being able to complete the season. He did, however, stress that probability could increase.

“We are working on that as we speak,” Krasner said in response to a question about wages, which are due to be paid today. “I’m not going to guarantee anything but I’m going to do the best that I can.

“The money I have to raise now is to make sure the travelling expenses are paid for the match on Saturday. It’s day-to-day items as well as wages.

“It’s not as bad as Bury because they are not in the Football League anymore. But if we don’t solve it and sell it then yes, it’s as bad as Bury, because the ultimate sanction is liquidation.”

 

Wigan now face a 12-point deduction and Krasner said he expected at least one more Championship club to go into administration, prompting him to call on the EFL and the Premier League to revise their insolvency rules.

“We will be looking at the transaction from the Hong Kong company,” he said. “We don’t know what’s gone on.”

Krasner was asked if the club had been sold last month to settle a gambling debt. “I have no knowledge of that,” he said. He was also asked if the transaction took place last month because IEC is listed on the Hong Kong Stock Exchange and would not have wanted to be associated with an English football club going into administration.

“You may say that, but I could not possibly comment,” Krasner said. “But we are aware of concerns raised.”

[Uilleam 5,929]

This may not be, as local MP Lisa Nandy declares, a "major global scandal", but it is, at least, a local, probably a national, horrorshow.

 

It almost makes Green, Whyte, and the rest, seem only modestly shady, and that takes talent. 

Of course, the sum involved at Wigan, some £42M, or thereby, is an amount about which our erstwhile owners (a phrase shameful to type) can only fantasize.

Does that quantity of wonga qualify as actual "wealth off the Record"? 

 

 

https://www.thetimes.co.uk/edition/sport/investigation-into-claims-that-wigan-athletics-administration-is-linked-to-a-bet-in-philippines-l7njpdw7z

 

Wigan Athletic administrators examine bet claims

Matt Lawton, Paul Joyce

Saturday July 04 2020, 12.01am, The Times

 

Wigan were placed into administration only four weeks after a takeover

 

The administrators for Wigan Athletic have opened a formal investigation into claims aired by English Football League chairman Rick Parry that their financial crisis is linked to a bet on the club being relegated this season.

The Times can reveal that the same administrators are also examining documents that may link the new Chinese owners, who are refusing to invest any more money into the Sky Bet Championship club, to a bankruptcy case in Hong Kong in 2012.

 

Last night Wigan MP Lisa Nandy called for a full inquiry into the situation at the club, describing it as a “major global scandal”.

In a letter to Oliver Dowden, the secretary of state for Digital, Culture, Media and Sport, Nandy questioned the EFL for approving a takeover only four weeks before the club was put into administration, and then threatening to issue a 12-point deduction.

 

The Times understands there will be a legal challenge to any points deduction while the club may question the fairness of blocking a solidarity payment from the Premier League of £2.3 million prior to administration that would be due on July 24. With the club only paying 20 per cent of the wages to players yesterday, the money could be crucial in covering its running costs.

 

As this newspaper reported on Thursday, Parry was involved in a conversation with a Wigan Athletic fan during which he said there was a rumour that the club’s administration was linked to “a bet in the Philippines on them being relegated”.

It was only four weeks ago that Wigan were sold from one Hong Kong-based company to another, both of which were, until recently, majority- owned by the same businessman and professional poker player, Dr Choi Chiu Fai Stanley.

Wai Kay Au Yeung, a Chinese businessman, has since replaced Dr Choi as the majority shareholder of Next Leader Fund, which purchased the club from International Entertainment Corporation (IEC), a Hong Kong-based, Cayman Islands-registered company, on June 2.

 

Wigan are seven points clear of relegation in the Championship but are now facing a 12-point deduction after being put into administration earlier this week.

That prompted a supporter, who claims to live on Parry’s road in a village in Cheshire, to seek an explanation from the EFL chairman. The fan, who asked not to be named, told The Times on Thursday night that he managed to catch Parry as he returned home.

In a video that was posted on Twitter which only shows his feet, Parry says: “There are all sorts of rumours. There’s rumours that there is a bet in the Philippines on them being relegated, because the previous owner has got gambling interests in the Philippines.”

In a statement the EFL confirmed that the video featured Parry, stressing that while Parry was “unaware he was being filmed, he was happy to engage in the debate”.

 

Yesterday Gerald Krasner, one of the administrators, told The Times he had “opened a file” on Parry’s comments and was putting the allegations to the English lawyers representing the Wigan owners. Krasner also said he intended to ask about official Hong Kong government documents that may point to a previous bankruptcy case involving their clients. The Times has seen the documents but has so far been unable to confirm if the person named is associated with Wigan Athletic.

The case dates back to 2012, meaning it is unlikely to be an issue for the EFL owners’ and directors’ test because discharged bankruptcy cases do not apply. The EFL have said the Wigan owners met the league’s requirements.

 

On Thursday Krasner, of Begbies Traynor, said he could not guarantee players and staff would be paid this month. Yesterday the players were informed they would only be receiving 20 per cent of their monthly wages. No assurances were given as to when, or if, they will recoup that money.

 

Krasner said he expected to uncover “incredible” evidence that will explain why the new owner, Next Leader Fund, has taken the club to the brink of financial ruin.

 

Nandy, meanwhile, is demanding answers. “It is only four weeks since a new ownership model was approved by the EFL and in the last 24 hours its chairman has been filmed discussing the possibility that the crisis facing Wigan Athletic is linked to ‘a bet in the Philippines on them being relegated,’ ” she said in her letter to Dowden.

“With this, and the details of the transfer of ownership, [it] is starting to become clear that Wigan Athletic has been the victim of a major global scandal whose details are still emerging, with wider implications for football as a whole. You must ensure there is a full and comprehensive investigation into how this could have been allowed to happen.” In an interview with PA, Nandy also said that the EFL must rescind the threat of a points penalty.

Edited July 4, 2020 by Uilleam

[Scott7 6,002]

Major Global Scandal, eh? You can just see the maps being unrolled in the boardrooms of Exchanges and Bourses across the world and reminiscent of the old Warrington vodka ads, a chorus of foreign accents demanding  “Vere is Vigan?”

[Uilleam 5,929]

1 hour ago, Scott7 said:

Major Global Scandal, eh? You can just see the maps being unrolled in the boardrooms of Exchanges and Bourses across the world and reminiscent of the old Warrington vodka ads, a chorus of foreign accents demanding  “Vere is Vigan?”

One may accuse the Chinese of many things, but they are not, as a rule, known to be Vigans, or even Vigetarians.

 

 

 

 

 

 

[compo 7,030]

Could a certain club be watching with interest to see if a move to England could be a thing within their grasp 

[ChelseaBoy 2,441]

4 hours ago, compo said:

Could a certain club be watching with interest to see if a move to England could be a thing within their grasp 

Can but hope