Birmingham City: Damn Right I’ve Got The Blues

by | Mar 16, 2018

If convicted money-launderer Carson Yeung Ka-Sing’s gruesome tenure as Championship strugglers Birmingham City’s main shareholder taught the club’s fans anything, it was ‘be careful what you wish for.’ West Midlands football is currently a Chinese hotbed, of course. And many risks and controversies are covered by owners at Wolverhampton Wanderers, West Bromwich Albion and Aston Villa. Investment conglomerate Fosun International turned Wolves £7.5m profit into a £23.18m loss in their first financial year at Molineux, indeterminate amounts of which have made their way to Jorge Mendes’ players’ agency, Gestifute, which is part-owned by…Fosun.

Tony Xia’s ‘ambitious’ plans for his ‘Recon Group’ to make Villa “the biggest football club in the world” proved too much for his managerial choice, Roberto di Matteo and is (over?) reliant on a stuttering bid for automatic promotion. See ‘Villa 1 QPR 3’ for latest details). And Lai Guochua believed Alan Pardew was a better bet than Tony Pulis to keep West Brom up. Yet Birmingham City still drew two short straws.

There was nothing wrong in wishing for the departure of porn-based Davids, Gold and Sullivan, in 2007. See West Ham for latest details. There was nothing at all wrong in wishing for Yeung’s departure, almost from the moment he arrived. ABSOLUTELY nothing at all whatsoever in wishing for Yeung’s weasily (with apologies to weasels) permanently “acting chairman” Peter Pannu to f**k off. Nothing wrong either with last season’s wishes for Gianfranco Zola to end a disastrous managerial tenure.

However, fans’ wishes, careful or otherwise, have played even less part in Blues’ dreadful last decade than the wishes of powerless fans across English club football’s desperate landscape. So, they can’t be blamed for Blues replacing Zola as manager with…Harry bloody REDKNAPP!! (It speaks volumes that Redknapp is not the grimmest aspect of this saga). And they certainly can’t be blamed for the current ownership structure and personnel; a puzzling, distant mix of companies and personalities.

The club is currently owned by Trillion Trophy Asia (TTA). Fan Ed Higgs tweeted on June 25th that TTA was “the Nominative Determinists’ choice.” But TTA was a mere “investment vehicle” and TTA ‘owner’ Paul Suen Cho Hung a mere vehicle investor; expert in dealing with ‘distressed stocks’ such as BIH but with no discernible interest in football and the public profile of the Invisible Man’s introverted cousin. And TTA’s takeover took an AGE. Higgs’ tweet was in June…2015.

TTA effectively saved Blues’ parent company, Birmingham International Holdings (BIH) from financial finality that summer. While countless loose ends from Yeung’s tenure were tied up, TTA provided a loan facility of HK$153m (c£12.3m). And the court judgment confirming major accounting firm Ernst & Young as BIH receivers stated that without TTA’s funding “the Club would almost certainly have been unable to operate in the 2015/16 season.”

So, goodwill abounded when TTA took over in October 2016. It lasted until TTA’s first significant football decision, replacing manager Gary Rowett with the afore-mentioned Zola that December. It seemed sudden, but Zola’s instant arrival made the decision appear thought-through. This appearance didn’t last. As Blues fan Neil Moxley wrote perceptively in the Mirror, football fans “have years of experience in watching similar clubs make such ridiculous decisions under foreign owners who think they know best.”

And while it was unclear who exactly within Blues’ ownership structure took the decision, it was clear that they paid too much heed to Zola’s deserved reputation as a wonderful, stylish player and no heed whatsoever to his managerial career; one Championship play-off final loss for Watford, followed by an ignominious sacking by Watford and surrounded by ignominious sackings at West Ham, Cagliari and, six months before his Birmingham appointment, Al-Arabi of the Qatar, ahem, ‘Stars’ League.

A week later, it was announced that TTA had agreed another loan facility, of HK$250m (c£23m), with BIH. But it was not designed to reassure fans or timed to fund a January transfer window splurge. It was to facilitate BIH’s ‘diversification of interests,’ a long-desired objective given the futility of relying on football for profit, especially after Blues’ parachute payments after Premier League relegation stopped in 2016.

This futility was exposed by the club’s accounts, published a further week later, which revealed losses of £5m, a wages-to-turnover ratio of 104% (technical term: ‘insane’) and worse figures to come, after Blues summer 2016 transfer window splurge. Indeed, the wages-to-turnover figure rose to an astonishing 128.69%, the fact that such a figure isn’t astonishingly high in the Championship is…well…astonishing.

BIH were “identifying opportunities in the business including sports, sports education, culture and online games and entertainment.” There were changes in BIH’s name, to Birmingham Sports Holdings (BSH) and their board, although to Blues fans, this meant one set of virtually unknown Chinese business people replacing another. Still, this diversification seemed all-the-wiser when Zola’s record became worse than any record in Taylor Swift’s back catalogue, with two wins and 13 losses in 22 games ‘diversifying’ a play-off push into a grim relegation battle.

Matters turned uglier on Good Friday, after Blues conceded a late equaliser at long-doomed Rotherham, five days after conceding another late goal in a 2-1 loss to a Derby side managed by…Rowett. So, the still-invisible Blues board tried to “clarify” Zola’s position “after recent articles in the media” suggested they had “lined up” his replacement.

“Gianfranco,” they concluded, had their “continual full support.” Which “clarified” that Gianfranco was toast. Still, nothing in his tenure became him like the leaving of it, although that wasn’t difficult. He resigned, acknowledging and apologising for his failings (“I take full responsibility. I feel very bad and very sorry”), after defeat at home to fellow strugglers Burton.

And with three games left and Blues 20th, three points above the bottom three and still perilously-placed financially, who better to appoint than Redknapp? Well, almost ANYBODY, of course. Maybe even Taylor bloody Swift. Redknapp was in the St Andrews hot-seat the day after Zola’s departure. This again hinted at forethought. But, again, the board suggested otherwise.

They cited Redknapp’s “notable success” managing “Bournemouth, West Ham, Portsmouth, Tottenham and QPR” but overlooked the financial messes he at least partly caused at four of those clubs. Under his leadership, the board declared, “Blues will enhance their strength and create achievement.”

Believing he would enhance Blues’ financial strength was certainly “creative.” And he was immediately full-on Redknapp, declaring: “I didn’t ask for a contract, I just shook hands” and claiming that he “told Birmingham I don’t want nothing, I’m not interested in the money.” Blues fans might have been keen to know whose hands he shook, not least because, without asking, he landed himself a QUARTER-OF-A-MILLION-POUND bonus for maintaining some of Blues’ three-point lead over their relegation rivals over three games.

Blues lost 1-0 at, of all places, Villa but then beat Huddersfield 1-0 at home, a remarkable “creative achievement” as they were a man down for 70 minutes against the EPL-bound Terriers and had a penalty saved. Less remarkable given the ten squad players Huddersfield fielded, having reached the play-offs. A genuinely good win at Bristol City (1-0 again) secured safety, in 19th place, two points above the bottom three. Not a ‘great’ escape, then. Still, 250 grand, eh?

In his 2003 book ‘Broken Dreams,’ Tom Bower quotes 1990s West Ham chairman Terry Brown asking plaintively “What’s Harry up to?” as Redknapp traded players in and out of the Boleyn Ground at frightening rates. It needed asking again last summer, as Redknapp traded 28 players in and out of St Andrews. But at least by then, someone might have asked it.

In June, Ren Xuandong (“Ren”) became TTA’s public name, if not yet face, confirming childish-giggle-inducing rumours of a “Mr Dong” behind the Blues scenes. According to fount of all Blues ownership knowledge, Daniel Ivery, on his almajir.net blog, Ren “made the call” on Redknapp’s appointment and was at Bristol City, although Redknapp claimed then that he hadn’t “met anybody who owns the club” and “never, honestly, discussed anything with anybody” (which, taken one way, wasn’t necessarily news).

Indeed, Ren, formally Birmingham City PLC CEO, wasn’t TTA’s public voice until October 2nd, when he addressed manager…Steve Cotterill’s introductory press conference, Redknapp having been dismissed on September 16th, two hours after a 3-1 loss at Preston. It was Birmingham’s sixth consecutive defeat. But the precise reasons for the decision were easier to surmise than confirm.

Maybe someone had asked what “Harry” was “up to” and didn’t like the answer. Because whatever Harry was “up to,” BSH losses for July-December 2017, which included his, ahem, ‘wheeler-dealing,’ were “up to” SEVENTEEN MILLION POUNDS. This after £17m losses for the entire 2016/17 financial year, itself treble 2015/16 losses.

Of course, “full-on Redknapp” means moans about “not having the players.” In July, he moaned about not getting desired deals “over the line” and being “one or two knocks” from problems getting a team out. And on August 27th, he moaned that while “the owners have been very good and given me a transfer budget, I haven’t even broke into that hardly,” although his pursuits of ex-Chelsea “legend” John Terry and ex-Arsenal midfielder Alex Song could have “broke into that” very hard indeed.

Ivery reports that behind-the-scenes figures such as “transfer guru” (Birmingham Mail, 31 August) Darren Dein had a say in transfer dealings which the man once nicknamed “Readies Redknapp” didn’t appreciate (i.e. any role). And, in fairness, Dein didn’t formally have any club role, yet Ivery believed he was on a £25kpw retainer.

Four players were signed on deadline day, including club record signing Jota from Championship rivals Brentford, with five leaving, a far more Redknapp-esque speed of player turnover, although club director and self-styled “assistant to Chairman” Edward Cheng tweeted a minute after the transfer window closed that Ren was “the real hero” of “not an easy transfer window for all of us.”

Yet Redknapp still moaned. “What can you do about it?” he asked after the Preston defeat. “You stand there as a manager, what can I do about that? What can anybody do?” Their job, perhaps? And perhaps it was little wonder that, after this plea of impotence, Redknapp lost his.

Ren, usually less-than-active on social media, tweeted his version of the cliched ‘dreaded vote of confidence’ three days before Preston (“It’s easy to believe in people when they are succeeding…we have to believe in each other when we fail”). One day after Preston, he semi-contradictorily tweeted that Redknapp’s sacking wasn’t “a rush decision” or “an easy one at all” but that it was “time to move on.” At Cotterill’s press conference, Ren insisted Redknapp’s sacking “wasn’t purely about the results” but only denied “for sure” that it wasn’t “because he doesn’t speak Chinese, like they were saying the other day” before coming over all cryptic (“there are certain things I think we both agree we need to move on to different directions”) and ultimately leaving no-one any the wiser.

He was as cryptic, refuting rumours of a ‘shadowy’ moneyman pulling Blues’ purse strings. Challenged on the “secrecy about the true identity of (Blues’) owner” and asked for said owner’s “name and motivation,” Ren denied any “secrecy at all” a St Peter-esque three times. “What is written there” (on Blues’ website, presumably), “is what it is. I represent Trillion Trophy Asia. I am one of the Board and the Board of Directors are there. They are a bit shy and I have a thick skin, that’s why I am here.”

Ren hasn’t spoken in detail in public since (and he stopped tweeting on October 31st). He appeared at the latest (though surely not the last) introductory press conference for a new manager, ex-Swansea, Leeds and recently-sacked Middlesbrough boss Garry Monk, on March 5th (the day before Monk’s first Blues game, against…Middlesbrough). There, he used Monk as a human shield from questions.

Ren had reasons to hide. He was initially greeted optimistically, as TTA’s first tangible link to football. He was CEO of Winning League LLP, which set up the Luis Figo Academy network in China in May 2014 with the Portuguese football legend letting his name be used as an academy brand. WL also bought Chinese second-tier club Nei Mongol Zhongyou, in 2015, although its rebranding as ‘Winning League FC’ took on an ironic tinge as they avoided relegation last season by four points.

However, allegations of huge financial problems emerged in a long letter last November, from Mario Parreira, the Academy’s Technical Co-Ordinator. Among many matters, Parreira claimed that some academy shareholders’ vital future investment was conditional on Ren, cited as WL’s legal representative, “staying out” of academy management. Parreira also noted that Ren was Winning League FC’s CEO for only two months before unspecified “internal problems” necessitated his exit.

Suddenly, Ren’s insistence in October that Birmingham was “going to be a sustainable football club for sure” seemed much less “sure.” And January’s transfer window was the sharpest possible contrast to Redknapp’s summer spend/splurge/spree, with the afore-mentioned £17m loss surely threatening Blues’ compliance with the Championship’s Financial Fair Play regulations.

Birmingham are currently stuck in the Championship drop zone…and stuck with TTA until October at best, as per the terms of the 2016 takeover. This tied TTA for two years before they could sell the club, or any aspect of the ‘new’ BSH, which has ‘diversified’ into a Cambodian property deal with its own financial controversies and a new name, Cambodian citizen Vong Pech, for Blues’ fans to puzzle over.

Workaholic researcher Ivery believes that personalities such as Ren, and others based in Beijing rather than Hong Kong, will take the club beyond October, rather than seek to end Blues’ ‘Chinese’ era in any meaningful way. And his bloodhound instincts have detected problems with some of these personalities. Most notably a “Mr King” (the in-vogue name for a dodgy figure at a football club supported by ‘bluenoses’), who he ultra-carefully identified as Chinese businessman Wang Yaohui, after reporting the above-mentioned rumours of a ‘shadowy’ purse-string puller.

In a paragraph with a “lawyers’ draft” aura, Ivery “(confirmed) in the strongest terms” that Wang had “no official legal connection” with the Birmingham companies and there was “no explicit or implicit accusation” that Wang was a “person who has Control over” club affairs, as per Football League regulations. “I am merely trying to identify a potential person of interest to fans (for) transparency.”

Ivery uncovered Wang’s past gambling debts and his more recent ‘unconventional’ artwork investment strategy. But he warned that “before anyone gets litigious, I am not saying Wang Yaohui is using Birmingham City to launder money.”

Ivery added that Wang had attended Blues games and met Redknapp “several times” (reports that Wang said “Blimey, he’s dodgier than ME,” cannot be confirmed, largely because I just made them up). And last July, Ivery reported that the “rumours of some shadowy Chinese billionaire” came from “three or four sources,” with “word” being that “he will be the owner” post-TTA.

Wang has several business links with BSH chairman Zhao Wenqing. And with one company who took over TTA’s “loan facility” duties last August, just as Redknapp was cranking up his wheeler-dealing. Between them, Chigwell Holdings (CH), last August, and Dragon Villa (DV), last October, loaned BSH HKS250m, which they subsequently converted to a combined 12.66% BSH shareholding. A Blues shareholder called Dragon VILLA is funny. But on a serious note, loan documents from 10th April 2017 (another Ivery discovery, natch) suggested Wang was possibly CH’s owner and certainly linked to the company.

This would mean regulatory consequences coming at BSH from all angles, especially if CH and DV were shown to be acting in concert. The BSH board declared, “to the best of their knowledge, information and belief, having made all reasonable enquiries” that the companies were “independent third parties.” But Ivery’s “knowledge, information and belief” dredged up too many potential connections even for an article this long to detail.

This could remain important as BSH’s 2017 accounts revealed the on-going need for external funding. The board’s “detailed cash-flow forecasts” showed that the club needed “additional funding of approximately £49.5m” from BSH for the 18 months to December 2018, a little more than double what CH and DV provided TO BSH. What HAD Harry (and others) been up to?

As Ivery noted in July, “Chinese ‘billionaires’ come in many guises.” Which is where this article came in. And if you think the Football League should be at least as diligent as Ivery in investigating Blues’ potential future directors/leaders/funding, don’t let me stop you.

Birmingham have hope on the pitch. As the Blues Trust supporters group tweeted alongside a video of Blues’ 3-2 defeat at promotion-chasing Cardiff last Saturday, after going 3-0 down: “Skip the first part, start watching at 49 seconds and it looks good.” Off the field, the 49th second can’t come soon enough.