Right, where were we… ah, yes. Peter Pannu, whingeing about, accurate, press coverage. The bits below about the BIH AGM last Friday are but the tip of a curious corporate iceberg. So, this article is to become a trilogy. Good, eh?…no…wait…COME BACK… And just in case I didn’t give due credit in part one, immense credit is due to the Blues Trust and the Often Partisan website for their amazing hard work on this matter, which makes Pannu’s attitude to them all the more contemptible.
Email to the previous auditor
A subsequent report regarding the previous auditor, BDO UK, is also misleading regarding a perceived “threat” said to have been sent to them. Again this report was based on the leakage of confidential internal documents from HK by the same party. The club is seeking legal advice on the theft and usage of internal confidential documents and may take appropriate action against those involved.
The Birmingham Mail’s joint investigation with the Blues Trust and website ‘Often Partisan’ uncovered an email sent by Pannu on March 15 2012 to one of the staff of the club’s then auditors, BDO, which included the line “I am not bothered with your BS anymore. Once the audit is over, I will deal with u personally.” The investigation uncovered lengthy correspondence between BDO and the BIH board, signaling BDO’s intent to take the matter to the police if BIH did not respond satisfactorily. The board apologised for a “misunderstanding” and, perhaps inevitably, claimed the words were “taken out of context entirely”, suggesting that Pannu meant to type “deal with your ISSUES personally.” How he missed out nine letters entirely…and what “BS” really stood for…remains unclear.
BDO partners, not having been born “yesterday,” were having none of that but chose sarcastic euphemism as a more proportionate response than police involvement. They maintained the words “presented a serious threat” but “(accepted) that the email was perhaps not meant in the way it was written.” If Pannu “had given more thought to the email before sending it, he might have changed the words to something less threatening.” Pannu, though, hasn’t “given more thought”, to judge by his ‘threat’ to “take appropriate action against those involved” with the “theft” of the above documents and their “usage.” And, again, his attempt to discredit the “report regarding the previous auditor” merely confirms it veracity.
It was open knowledge within the group that since the previous auditor, Edwards LLP… were removed by the previous directors in charge in HK and replaced with BDO UK, BDO HK being the parent’s auditor, there was some strain amongst the parent and the subsidiary. This became worse upon my appointment as the director in the UK as I was unhappy with the delays in the audit in HK and in the UK and the escalating costs associated with it. Add to that the pressures from the footballing authorities for the late filings that led to an embargo. We then had to work hard to have that lifted.
I wished the leakage also demonstrated, which unfortunately was not reported, that I was pushing the previous auditors to probe into the Xtep deal vigorously and complained about the lack of funds coming into the club and on other matters that I felt required more probing. To be fair to BDO UK, they did seek answers from those concerned in HK but nothing was forthcoming. I was only fighting hard for the club’s interest and trying hard to bring in more funds. These were mentioned in the YE 2011 audit reports and the single director mentioned in the audit report, and as quoted in the captioned press article, was myself who queried the Xtep deal and the arrangements.
Pannu has three discrete roles. As vice, then acting, chairman of a club in a worse state on and off the pitch than when he arrived in October 2009, he has been a failure. As CEO and MD of BIH since September 2012, he has been less of a failure. And the Blues Trust and Often Partisan have rightly made the distinction. Pannu is clearly involved in a company power struggle – one which he is winning if his convincing re-election to BIH’s board is a guide. But few Blues fans are well-informed enough about that struggle to make definitive comment. BIH has undoubtedly been poorly governed, though by whom is still to emerge. But as consultant to BIH, which is in at least as bad a state as the club it almost wholly owns, Pannu has been a failure too.
There has been no ‘threat’ made to anyone and the reference in the email, and as explained to BDO, related to dealing with an internal inquiry at the BDO HQ upon my return to the UK. The report in the paper is completely out of context.
How far “out of context” the, undisputed, phrase was could easily be demonstrated by publishing the entire email. But Pannu’s reference to internal inquiries seems irrelevant… maybe even “BS.”
I suppose this sets the matter straight now. I am glad to say that we have re-appointed Edwards LLP as our club’s auditors and as a result YE 2012 and other accounts are now all published efficiently. Upon my appointment in HK as the MD/CEO in September 2012, we have within a very short period of time chased up and published three sets of accounts which were stalled for the last few years. This is absolutely vital for the group’s survival, for the resumption of trading and for any disposal of the club. If the fans want the club to be sold, this is step number one to be done, which we did, to secure the necessary approvals from the shareholders and the Hong Kong Stock Exchange.
There isn’t much “if” about whether fans want the club to be sold. The fact that it hasn’t been, when Pannu told fans last June that “prospective buyers are continuing to maintain a close rapport with the club,” is one of the supporters’ major frustrations. The fact that it couldn’t be, when Pannu told fans about potential buyers’ close rapports last June, is more than frustrating.
Piece on Mr. Liu Xingcheng
I have no comments regarding this personality and simply wish the fans to note that he is married to Mr. Yeung’s ex-partner’s sister, a de facto brother-in-law, whose family stayed at Mr. Yeung’s house in London and his kids went to school in the UK, all courtesy of Mr. Yeung. Mr. Yeung now has a new wife and a family and I do not wish to get in to domestic arguments amongst them.
So we can go now?
Suffice to say that…
That’ll be a ‘no’ then…
…Mr. Yeung is initiating legal actions both in China, Hong Kong and in the UK emanating from their past domestic dealings. Mr. Yeung is also concerned that his frozen assets in the UK may have been dissipated whilst he was stranded in Hong Kong and he is looking at that as well.
One “domestic dealing” Pannu “failed to clarify,” “chose not to disclose” or “unfortunately did not report” was that Liu “took his investment in BIH as payment for a debt owed by (Yeung).” These “past domestic dealings” could involve quite a number of “legal actions.”
Mr. Liu is most welcome to attend the shareholder’s meeting on the scheduled date. It will be a good time to highlight to him how we have made sure that the club is still afloat over the last two years in this environment and how we have made enormous progress in HK to get the accounts out to ensure the value of his shares is still there.
It is unclear whether Liu attended the AGM. But his promises to “vote against” Pannu’s re-election and urge others to follow suit, appeared empty or ineffective. Pannu was re-elected by an almost North Korean landslide vote – with only 7.11% of shares cast against him. Liu’s shareholding was reported in the Birmingham Mail last month as exactly twice that figure. Yet Often Partisan has produced evidence (i.e. a copy) of Liu’s vote against all AGM resolutions, and correspondence to, presumably, Liu’s solicitors from “attesting officers” (solicitors appointed to verify legal documentation) claiming that “our client is not in a position to act on the said voting instructions” because “you have so far not acknowledged that your client” is Liu.
And Liu also transgressed a BIH board ruling that “no shareholder was entitled to attend and vote only against the Resolutions at the AGM.” The series of 92% votes in favour suggests shareholders were perfectly entitled to attend and vote only FOR AGM resolutions. I would welcome guidance as to whether this is as breathtaking as it sounds. But whatever credibility Liu lacks (such as his pledge to vote against Yeung…who wasn’t up for re-election), Pannu’s idea that ensuring “that the club is still afloat over the last two years” is worthy of pride or praise lacks at least as much, especially coming from Blues’ “vice-president of finance” when it nearly sank in the first place.
As far as I know, having met him in China and in the UK, Mr. Liu does not speak any English and I want to compliment the UK press for being able to speak to him in Mandarin and to get his points across accurately, I hope, as reported.
Nowhere is Pannu’s sneering superiority more evident than in this sarcasm-dripped paragraph. The implication is either that the quotes are fiction, or that the supporters who obtained them couldn’t organise an efficient translator. Pannu does them an insulting disservice. A number of supporters made considerable and admirable efforts to travel to Hong Kong to speak to BIH stakeholders, including Mr. Liu. Below, Pannu complains that fans haven’t “(looked) deeper to identify the core issues and not just what appears on the surface.” And yet, when some have done precisely that, all he can muster in response is arrogant dismissiveness.
Progress report on the sale
Mr. Yeung had procured an interested party from China and is personally leading the discussion there. I would have preferred someone from the UK, even a Bluenose owner, but it appears we are not making as much headway there as I would have wished.
Currently, Mr. Yeung is surely doing nothing of the sort. His long-awaited trial in Hong Kong’s district court on money-laundering charges began on April 29th. If he isn’t fully-focused on that, he could end up in more trouble than he already appears to be. And if Pannu really would prefer “someone from the UK, even a Bluenose,” then “not making as much headway as I would have wished” is galactic understatement. The only domestic interest in Blues was the “mystery consortium” fronted by “Bluenose” Gianni Paladini, whose credibility deficit rendered Pannu’s sneering arrogance and dismissiveness somehow appropriate.
The clearance of all the outstanding accounts will make a disposal easier and I am hopeful we can find some new owners who can take the club forward as the fans very much deserve a change. If there are any updates they will be posted here but for those who prefer the other media reports, please carry an open mind when reading these and await clarification on our official site.
“The fans very much deserve a change.” Well, he got that right.
I understand owners at other clubs, for instance, just to name two, Wolves and Leeds, are facing a similar outpouring of passion from their fans. This is football and the drama is part and parcel of the game and we gladly all accept it. However, at some point I wish the fans can carry a cool head and look deeper to identify the core issues and not just what appears on the surface.
Pannu’s examples of supporter unrest could not possibly be more ill-advised. In trying to brand fans as superficial hot-heads, he cites one club where mistakes off the pitch have led to consecutive relegations on it and another recently owned, and still influenced by, Ken bloody Bates. This should not be football. The dramas surrounding people like Bates should not be “part and parcel” of the game. And I know English is not Pannu’s first language (I’m not criticising his linguistic skills, which are far better than mine, just noting as another example of his arrogance that he hasn’t let a sub-editor near this statement). But I have not the first idea what he means by “we gladly all accept it.”
PART THREE, later this week: Pannu posts, patronises and puzzles again
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