It is exactly three years since the press-release heavy article in the Birmingham Mail newspaper announcing Birmingham City’s new sponsorship deal with Chinese sportswear manufacturers X-Tep. But even allowing for the spin, it shows how large a failure Carson Yeung and his associates’ Blues ownership has been. Three years on from heady days of live Chinese TV coverage of Blues games and other dreams, Yeung awaits trial in his native Hong Kong on money-laundering charges. And Blues are edging down the Football League Championship and selling all significantly valuable players simply to stay in business – a process which, the latest football club accounts confirm, is far from complete.

The article also shows how central ‘acting chairman’ Peter Pannu has always been. It’s references to the “X-Tep deal” being “the tip of the iceberg as far as what Carson Yeung is doing for us in China” and how “this link-up and our combined expertise…can only help our star shine” all came from “club chief” Pannu.” And a photograph on the Guardian newspaper’s website last weekend literally showed Pannu in a central role when Yeung and co. took over in September 2009. Yeung is flanked by six ‘associates’ from home and Hong Kong. Immediately to Yeung’s right is Vico Hui, former Chief Executive of Blues’ ultimate parent company Birmingham International Holdings (BIH). Hui is currently blamed for what eventually became the X-Tep fiasco – the extent of which was also revealed by the accounts. Immediately to Yeung’s left is Pannu. And in such photos, the ‘central’ figures really are the central figures.

The accounts also centred on Pannu, revealing that, during furious cost-cutting across the club after relegation from the Premier League, “director’s emoluments” leapt from £80,247 to £687,611, all paid to one director… Peter Pannu. Pannu somehow overlooked his central role in, and huge ‘reward’ for, Blues’ financial demise during his late-December media onslaught, although the latter only emerged subsequently. The focal point was a 27-minute interview on local radio outlet Free Radio, conducted by an embarrassingly obsequious Tom Ross, in which Pannu rewrote recent Blues history in his own image and likeness. Ross’s second question was “Everyone knows that you’ve worked tirelessly to make things happen – with Carson Yeung’s problems in Hong Kong, it’s left you high and dry to some extent in trying to keep this football club going without investment coming in. How difficult has that been for you?”

Even without the accounts’ revelations on Pannu’s salary jackpot, this was as soft and runny as a fluffy toy with diarrhoea – with equivalent intellectual merit. Pannu could hardly have written the question any better for his own purposes. Pannu looks like Harry Hill after a two-year fast-food diet. And he sounds like comedian Omid Djalili in middle-class mode. But there was nothing intentionally funny about the interview, despite it being liberally peppered with comedy gems. The best was “my man has done a very, very phenomenal job here,” which was presumably a reference to Yeung rather than the butler Pannu could almost certainly afford on £687,611p.a. A close second was “we can’t say we are happy where we are but Bolton, Blackburn, Wolves, they are not very far away from us,” as if being not far behind the division’s three biggest under-achievers, especially Blackburn, was a plus.

Elsewhere, Birmingham’s problems were treated as somehow one step removed from Yeung’s decision-makers, while the solutions were all their own work. Add some overbearing arrogance, jaw-droppingly sexist analogising and extremely unwise – possibly self-defeating – transfer talk and you had an unedifying mix. Pannu repeatedly referenced “the monies we are deprived of due to relegation,” like some external force was at work. And “we have kept this club afloat,” like “we” had played no part in nearly sinking it. “I’ve got a new auditor,” he boasted, adding: “he’s very efficient,” like previous auditors BDO were inefficient rather than appalled at financial (mis)management by club directors, presumably including the vice-chairman of finance, whose identity I’m sure you can guess.

Still, Blues’ “finances were OK” last summer & Pannu told Ross: “I’ve already got the accounts done up for year-end June 2012,” like they weren’t required by December 1st, in line with Football League financial requirements. “(They) don’t look too bad, we’ve got some profits to report,” Pannu added, an analysis which history has already destroyed. Pannu also told Ross that he recently had meetings with “my senior players.” And he believed there was concern over how Blues could function when he was in Hong Kong: “I have indicated (to the club’s staff) the sort of things they have to deal with in my absence and Roger Lloyd, who is my financial guy, is stepping in in my absence.” Phew, eh?

However, the accounts’ cash-flow forecasts stated that “to continue its operations until December 2013” City required “forward-funding of player transfers,” whatever that meant – even the well-informed, well-advised Blues Supporters Trust need help with “the mechanics of these arrangements” – and money from “additional transfers.” This task was hardly helped by Pannu’s confession that “I rejected £6m from Southampton last summer for Jack Butland (Blues’ highly-rated young goalkeeper) but I might not be able to reject it (now)”, thereby ensuring that no-one will offer anything of the sort. There was more… and worse. “On a micro level, these things happen in every family,” he noted of Blues’ money worries, explaining that “Every fan will have a wife at home. She’s going to say ‘I want a new TV, I want a new fridge,’ and the fan is going to say ‘hey dear, I can’t do that because this is all I earn.’” Pannu’s fan had a solution: “Lets sell this car and I’ll buy you a new fridge and a new kitchen” (where, naturally, the wife belongs). However, Pannu wasn’t telling fans “you are not treating your wife well, why don’t you buy her an eight-carat diamond ring and a gold chain?” He was just “putting it in perspective.”

“Guys,” Pannu implored, adding irritating modern jargon to offensive sexism from about 1955, “think at a micro-level and you’ll understand the macro-dynamics at play.” But Pannu had done quite enough “thinking at a micro-level” thank you very much. Pannu has consistently divided fans’ opinions. But if his reputation wasn’t already trashed by his radio performance, it surely was by the club’s accounts and Pannu’s ridiculous and rude attempts at explanation. The X-Tep deal grabbed the first headlines. Not only had it fallen short of promised income streams, it had cost the club money last year. X-Tep’s sponsorship contribution halved on relegation but Blues still had to pay them full whack for club promotional work in China, according to an (ahem) “unannounced counter-contract” negotiated by Hui, BIH’s then-CEO. “The outflow was larger than the sponsorship fee,” the accounts noted, matter-of-fact as you like. In June, Pannu made great play of calling Hui, and BIH co-director Pauline Wong, to account over more general problems with X-Tep. And Hui soon resigned from both company and club boards, leaving Pannu apparently triumphant in an internal power struggle, and the man responsible for ridding the club of its turbulent sponsors.

Earlier this month, however, the excellent Blues’ fan website Often Partisan discovered that Hui remains a major player in four “Birmingham” companies operating from BIH’s offices – in addition to the apparently-untraceable ‘Birmingham (Hong Kong) Limited’ to which X-Tep monies were supposedly paid. Hui owns two of them and is also sole director of a third. But perhaps more significantly in this context, he remains a director of the fourth, Birmingham International Management, which is wholly-owned by BIH. This suggests that Hui’s spat with Pannu and his subsequent resignations were not as significant as first thought (by me, among others). And OP has asked Pannu “why Mr Hui remains a director of a wholly-owned BIH subsidiary if there remains a question over his conduct with respect to the X-Tep deal?”

X-Tep has, though, been edged out of the headlines by Pannu’s six-figure remuneration. Challenged on this with belated but welcome vigour by Ross, Pannu e-mailed a response so ill-thought out that he could scarcely have sounded more panic-stricken had he been door-stepped. Despite what the accounts said, he claimed his annual salary was only £250,000, which “with PAYE tax is 50% less.” He also claimed he’d had “no pay rise since October 2010” which begged the question as to how his salary could be £250,000 in 2011-12 when directors’ emoluments were only £80,000 in 2010-11. And the remaining £437,611 covered “pocket expenses” (‘out-of-pocket’?) “for all the Hong Kong staff that regularly comes to the UK, on which full taxes are paid and accounted for through my name.”

This begged questions on how these expenses were paid in 2010-11, as they could not have come from that year’s director’s emoluments unless they had increased at least five-fold. And even the Birmingham Mail’s regular and never-knowingly-hyperbolic financial expert Peter Knowles thought this method of paying staff expenses from personal salary “totally bizarre.” Knowles said: “When accounts report what a director is being paid, that is what the director should be getting paid,” adding, perhaps significantly, that “I’m surprised the auditors” (which Pannu “got” and declared “very efficient”) had approved it”.  Then there’s the understandable outrage that Pannu should be so highly paid for his part-time club role (he is BIH CEO and MD too). The BIH and, presumably, Birmingham City PLC accounts will complete Pannu’s remuneration picture. So it’s unfortunate that BIH’s accounts have been so-long delayed. Isn’t it? And 2011/12’s profit figure of £15.7m, which masked a £4m operating loss, included £20m in player sales and the £16m Premier League parachute payment. Blues cannot continue selling players for that money. The parachute payment halves next season. And City owe BIH £7m and Yeung £14m, for which both will wait 12 months – not that Yeung is currently in much of a position to spend it (the club was inordinately pleased that none of Yeung’s contribution was “sourced from money-laundered funds”). So the finances were certainly not “OK” last summer, as Pannu stated.

Meanwhile, Pannu controls the on-and-on-going takeover saga too. He told Ross that BIH shareholders had the ultimate say on any bid but made it clear they would have nothing to talk about without his approval – “what is the point of doing a deal with me if I feel they are not suitable persons to take the club forward?” And he is reluctant to look much further than Hong Kong for new owners or investment. Gianni Paladini’s media pals, including Ross, continue to fight his corner – his consortium remains Blues’ only publicly-declared bidder. But Pannu continues to counter with complaints about their anonymity. “I’m baffled,” he told Ross. “What’s the problem in telling me who they are?” And he raised not unreasonable doubts about Paladini’s own role, noting that the consortium was represented by “a footballing agent” when he met them, adding: “I’m not sure if Paladini is the purchaser.” He said: “If the backers were connected to Inter Milan…or, for God’s sake, the previous president of Italy. I would be very happy.” And, yes, he meant Silvio Berlusconi. For God’s sake, indeed. But, as per any stereotypically-bad “club chief’s” apparent contractual obligation, Pannu implied that media and supporter “attacks on owners and directors will not and do not help the sale” and caused “the last-minute” withdrawal of the “last interested party.” Yawn.

When the transfer window closes, Blues’ financial situation may be clearer. But the full picture will take longer to emerge, as Pannu said that even his “efficient” auditor, Adrian Stevens of Walsall-based Edwards Chartered Accountants, won’t be able to “claw back (BIH’s) 2011 and 2012 accounts” – a necessary pre-requisite for any takeover – until “towards the end of March.” “I will not allow this club to go into administration,” Pannu told Ross. That administration is even part of the conversation, three years after the X-Tep deal was so expansively trumpeted, is a damning indictment of Yeung, his associates and his “vice-chairman of finance.”

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