Lower League Armageddon Awaits

[Calgary_Baggie]

Proth with all due respect I sometimes wonder if you're on the the same planet. Our owners do exactly as they want. They answer to no one. They could easily pay the loan off and tell MSD to take a hike.
This is real business they bend, break and make the rules. 
I said a long time ago they were taking money out of the club and it was noooo they simply can't take money out of the club when they want. Well they did. And mark my words they have not finished yet.
They don't work within the same moral code as we do. Our rules and regulations do not mean anything to them. Lai could have simply paid himself a £5m dividend and paid the loan off. He couldn't even be bothered to do that. He just crossed it out and wrote it on another balance sheet. That's the type of people our owners are. No matter what we are not getting a penny back. They probably charged us a large fee for moving it.

Past tense.  They USED TO do what they wanted until their actions came under the microscope once it was clear what was going on.  The owners can’t “easily pay the loan off” if the owners can’t or won’t find the money to do so. They are an investment consortium and the investment was made on the clear basis that the investment would be self-financing. 

The FACT is that for the past 3 months a debenture is in place re the MSD loan. It’s on public record at Companies House on public record.  Well worth a read. So it’s impossible for them to take anything more out without being in breach, which would trigger MSD demanding repayment of their debt in full.  So your “mark my words” is without foundation.  The rules have changed with MSD in place.  That’s actually a good thing. 

Lai couldn’t do that with the £5m loan. Wisdom Smart owes the money. Wisdom Smart is not a shareholder. The shareholder (ultimately) is Yunyai and its 1032 (approx) investors, not Lai.   Any dividends belong to all of the shareholders,  so the money would not easily find its way to Wisdom Smart to enable Wisdom Smart to repay its debt.  And remember that a dividend can only be paid out of available cash flow - which we don’t have.  And also remember that any dividend also has to be paid to the 12% shareholders. The cash outlay is simply not an option currently to pay the dividend. 

You are overlooking the reality that Lai is merely a front for the 1032 investors. He is one of them.  It is NOT, and never was his money.  He is answerable to a lot of people in China.  He cannot just do as he pleases - although I think that’s exactly what he WAS doing until he was rumbled.  He will be facing enormous heat in China as a result.  That’s why I think a sale will come soon - once promotion is impossible this season.

I'm nowhere neat to being anywhere near your understanding of this but one thing I think folk seem to miss is that Lai is a front for a consortium so what difference will yelling g at him make?

If I'd invested I'd at least want back what I put in regardless of a bunch of ageing English blokes yelling obscenities at a glass door.

I too would want at least what I'd invested back but if I realised that had little to no chance of ever happening then I might be tempted to get what I can rather than waiting forever for something that will never arrive

All this I want back what I put in is clearly taken from people who don’t take risk’s and realise how the world works. 
You invest in something and you’ve no guarantee. I have shares that have gone up and down. I thankfully got out of the dot.com fiasco before it went arseways in 2001 or so. I’ve made some investments though that were rubbish. 
The 1000 odd investors will never get their money back. That’s life.

Then surely now they'll cash out before they really start losing out? And if they don't they're very much in it for the long term.

[Pragmatist]

Proth with all due respect I sometimes wonder if you're on the the same planet. Our owners do exactly as they want. They answer to no one. They could easily pay the loan off and tell MSD to take a hike.
This is real business they bend, break and make the rules. 
I said a long time ago they were taking money out of the club and it was noooo they simply can't take money out of the club when they want. Well they did. And mark my words they have not finished yet.
They don't work within the same moral code as we do. Our rules and regulations do not mean anything to them. Lai could have simply paid himself a £5m dividend and paid the loan off. He couldn't even be bothered to do that. He just crossed it out and wrote it on another balance sheet. That's the type of people our owners are. No matter what we are not getting a penny back. They probably charged us a large fee for moving it.

Past tense.  They USED TO do what they wanted until their actions came under the microscope once it was clear what was going on.  The owners can’t “easily pay the loan off” if the owners can’t or won’t find the money to do so. They are an investment consortium and the investment was made on the clear basis that the investment would be self-financing. 

The FACT is that for the past 3 months a debenture is in place re the MSD loan. It’s on public record at Companies House on public record.  Well worth a read. So it’s impossible for them to take anything more out without being in breach, which would trigger MSD demanding repayment of their debt in full.  So your “mark my words” is without foundation.  The rules have changed with MSD in place.  That’s actually a good thing. 

Lai couldn’t do that with the £5m loan. Wisdom Smart owes the money. Wisdom Smart is not a shareholder. The shareholder (ultimately) is Yunyai and its 1032 (approx) investors, not Lai.   Any dividends belong to all of the shareholders,  so the money would not easily find its way to Wisdom Smart to enable Wisdom Smart to repay its debt.  And remember that a dividend can only be paid out of available cash flow - which we don’t have.  And also remember that any dividend also has to be paid to the 12% shareholders. The cash outlay is simply not an option currently to pay the dividend. 

You are overlooking the reality that Lai is merely a front for the 1032 investors. He is one of them.  It is NOT, and never was his money.  He is answerable to a lot of people in China.  He cannot just do as he pleases - although I think that’s exactly what he WAS doing until he was rumbled.  He will be facing enormous heat in China as a result.  That’s why I think a sale will come soon - once promotion is impossible this season.

I'm nowhere neat to being anywhere near your understanding of this but one thing I think folk seem to miss is that Lai is a front for a consortium so what difference will yelling g at him make?

If I'd invested I'd at least want back what I put in regardless of a bunch of ageing English blokes yelling obscenities at a glass door.

I too would want at least what I'd invested back but if I realised that had little to no chance of ever happening then I might be tempted to get what I can rather than waiting forever for something that will never arrive

All this I want back what I put in is clearly taken from people who don’t take risk’s and realise how the world works. 
You invest in something and you’ve no guarantee. I have shares that have gone up and down. I thankfully got out of the dot.com fiasco before it went arseways in 2001 or so. I’ve made some investments though that were rubbish. 
The 1000 odd investors will never get their money back. That’s life.

Spot on

I suspect the investors have not exactly been given the full picture of what Lai has been up to.  That’s where all this media exposure has been so good. There’s no hiding place now for Lai

[Fulham Fallout]

Past tense.  They USED TO do what they wanted until their actions came under the microscope once it was clear what was going on.  The owners can’t “easily pay the loan off” if the owners can’t or won’t find the money to do so. They are an investment consortium and the investment was made on the clear basis that the investment would be self-financing. 

The FACT is that for the past 3 months a debenture is in place re the MSD loan. It’s on public record at Companies House on public record.  Well worth a read. So it’s impossible for them to take anything more out without being in breach, which would trigger MSD demanding repayment of their debt in full.  So your “mark my words” is without foundation.  The rules have changed with MSD in place.  That’s actually a good thing. 

Lai couldn’t do that with the £5m loan. Wisdom Smart owes the money. Wisdom Smart is not a shareholder. The shareholder (ultimately) is Yunyai and its 1032 (approx) investors, not Lai.   Any dividends belong to all of the shareholders,  so the money would not easily find its way to Wisdom Smart to enable Wisdom Smart to repay its debt.  And remember that a dividend can only be paid out of available cash flow - which we don’t have.  And also remember that any dividend also has to be paid to the 12% shareholders. The cash outlay is simply not an option currently to pay the dividend. 

You are overlooking the reality that Lai is merely a front for the 1032 investors. He is one of them.  It is NOT, and never was his money.  He is answerable to a lot of people in China.  He cannot just do as he pleases - although I think that’s exactly what he WAS doing until he was rumbled.  He will be facing enormous heat in China as a result.  That’s why I think a sale will come soon - once promotion is impossible this season.

I'm nowhere neat to being anywhere near your understanding of this but one thing I think folk seem to miss is that Lai is a front for a consortium so what difference will yelling g at him make?

If I'd invested I'd at least want back what I put in regardless of a bunch of ageing English blokes yelling obscenities at a glass door.

I too would want at least what I'd invested back but if I realised that had little to no chance of ever happening then I might be tempted to get what I can rather than waiting forever for something that will never arrive

All this I want back what I put in is clearly taken from people who don’t take risk’s and realise how the world works. 
You invest in something and you’ve no guarantee. I have shares that have gone up and down. I thankfully got out of the dot.com fiasco before it went arseways in 2001 or so. I’ve made some investments though that were rubbish. 
The 1000 odd investors will never get their money back. That’s life.

Spot on

I suspect the investors have not exactly been given the full picture of what Lai has been up to.  That’s where all this media exposure has been so good. There’s no hiding place now for Lai

I still don’t understand why we have removed the debtor from the balance sheet 

If the directors genuinely believed the debt would be repaid, then the debtor should have been retained in the balance sheet and a suitable provision for bad debt held as a liability in case of bad debt. 

I wonder if wba holdings have also removed the loan from their accounts.

[Pragmatist]

I'm nowhere neat to being anywhere near your understanding of this but one thing I think folk seem to miss is that Lai is a front for a consortium so what difference will yelling g at him make?

If I'd invested I'd at least want back what I put in regardless of a bunch of ageing English blokes yelling obscenities at a glass door.

I too would want at least what I'd invested back but if I realised that had little to no chance of ever happening then I might be tempted to get what I can rather than waiting forever for something that will never arrive

All this I want back what I put in is clearly taken from people who don’t take risk’s and realise how the world works. 
You invest in something and you’ve no guarantee. I have shares that have gone up and down. I thankfully got out of the dot.com fiasco before it went arseways in 2001 or so. I’ve made some investments though that were rubbish. 
The 1000 odd investors will never get their money back. That’s life.

Spot on

I suspect the investors have not exactly been given the full picture of what Lai has been up to.  That’s where all this media exposure has been so good. There’s no hiding place now for Lai

I still don’t understand why we have removed the debtor from the balance sheet 

If the directors genuinely believed the debt would be repaid, then the debtor should have been retained in the balance sheet and a suitable provision for bad debt held as a liability in case of bad debt. 

I wonder if wba holdings have also removed the loan from their accounts.

Standard accounting policy.  Assets have to be stated at their realistic value otherwise the balance sheet is overstated.  After a loan repayment has defaulted several times the auditors will have insisted on writing down the value on the balance sheet. 

The money is not owed to WBA Holdings so they have nothing to consider writing down.  The write-down is reflected in their consolidated accounts though, for the same accounting policy reason. 

The written-down amount is in the provision for bad and doubtful debts in Group.

[Kit Kat Chunky]

Well Prag, we will just have to differ

In my 35 years of Corporate  Banking I've never seen an SME come running to a Bank to report a breach. The only times it happens is in Insolvency, or if they are required to do so due to be the members of an Exchange. This is the reason Peace took West Brom of AIM, so he didn't have to disclose so much h information. Most SME lending requires quarterly Management Information at best, and that tends to be focused around Profitability covenants. There is a more detailed annual covenant check when accounts are  received

My understanding is this is a Visa scheme. I worked with a similar group of Chinese trying to buy an EFL club around the same time. Mass events were held to encourage investment. It was just like selling time share.

Yes we’ll have to agree to disagree. 

Normal rules of bank lending don’t apply to hedge fund lenders in a narrow market who set their own rules.  I also categorically know 100% how MSD operate in relation to football clubs. 

This absolutely is not an investment visa scheme.

I've worked with hedge funds, Mezz funds, V C, Investment banks  I've documented Securitisations  I know how facilities are documented, covenanted and monitored.

If MSD had the ring of iron you are suggesting then the Derby situation would never have happened.

[Pragmatist]

Well Prag, we will just have to differ

In my 35 years of Corporate  Banking I've never seen an SME come running to a Bank to report a breach. The only times it happens is in Insolvency, or if they are required to do so due to be the members of an Exchange. This is the reason Peace took West Brom of AIM, so he didn't have to disclose so much h information. Most SME lending requires quarterly Management Information at best, and that tends to be focused around Profitability covenants. There is a more detailed annual covenant check when accounts are  received

My understanding is this is a Visa scheme. I worked with a similar group of Chinese trying to buy an EFL club around the same time. Mass events were held to encourage investment. It was just like selling time share.

Yes we’ll have to agree to disagree. 

Normal rules of bank lending don’t apply to hedge fund lenders in a narrow market who set their own rules.  I also categorically know 100% how MSD operate in relation to football clubs. 

This absolutely is not an investment visa scheme.

I've worked with hedge funds, Mezz funds, V C, Investment banks  I've documented Securitisations  I know how facilities are documented, covenanted and monitored.

If MSD had the ring of iron you are suggesting then the Derby situation would never have happened.

MSD were repaid in full, with interest.  It worked. 

The Derby situation happened because of Mel Morris.  The club owed him an astonishing £192m and he was demanding as much as possible back, and the club had already sold the ground to him.  Derby had no collateral left.

---

Well Prag, we will just have to differ

In my 35 years of Corporate  Banking I've never seen an SME come running to a Bank to report a breach. The only times it happens is in Insolvency, or if they are required to do so due to be the members of an Exchange. This is the reason Peace took West Brom of AIM, so he didn't have to disclose so much h information. Most SME lending requires quarterly Management Information at best, and that tends to be focused around Profitability covenants. There is a more detailed annual covenant check when accounts are  received

My understanding is this is a Visa scheme. I worked with a similar group of Chinese trying to buy an EFL club around the same time. Mass events were held to encourage investment. It was just like selling time share.

Yes we’ll have to agree to disagree. 

Normal rules of bank lending don’t apply to hedge fund lenders in a narrow market who set their own rules.  I also categorically know 100% how MSD operate in relation to football clubs. 

This absolutely is not an investment visa scheme.

I've worked with hedge funds, Mezz funds, V C, Investment banks  I've documented Securitisations  I know how facilities are documented, covenanted and monitored.

If MSD had the ring of iron you are suggesting then the Derby situation would never have happened.

MSD were repaid in full, with interest.  It worked. 

The Derby situation happened because of Mel Morris.  The club owed him an astonishing £192m and he was demanding as much as possible back, and the club had already sold the ground to him.  Derby had no collateral left.

As I said, I have direct experience of dealing with MSD loans to football clubs. Their money is as safe as houses with their loan to us because there’s no other debt.  They will be paid in full whatever happens.

[Malcolm Tucker]

If it’s as safe as houses then why couldn’t we borrow it off Barclays at a significantly lower rate?

[Fulham Fallout]

I too would want at least what I'd invested back but if I realised that had little to no chance of ever happening then I might be tempted to get what I can rather than waiting forever for something that will never arrive

All this I want back what I put in is clearly taken from people who don’t take risk’s and realise how the world works. 
You invest in something and you’ve no guarantee. I have shares that have gone up and down. I thankfully got out of the dot.com fiasco before it went arseways in 2001 or so. I’ve made some investments though that were rubbish. 
The 1000 odd investors will never get their money back. That’s life.

Spot on

I suspect the investors have not exactly been given the full picture of what Lai has been up to.  That’s where all this media exposure has been so good. There’s no hiding place now for Lai

I still don’t understand why we have removed the debtor from the balance sheet 

If the directors genuinely believed the debt would be repaid, then the debtor should have been retained in the balance sheet and a suitable provision for bad debt held as a liability in case of bad debt. 

I wonder if wba holdings have also removed the loan from their accounts.

Standard accounting policy.  Assets have to be stated at their realistic value otherwise the balance sheet is overstated.  After a loan repayment has defaulted several times the auditors will have insisted on writing down the value on the balance sheet. 

The money is not owed to WBA Holdings so they have nothing to consider writing down.  The write-down is reflected in their consolidated accounts though, for the same accounting policy reason. 

The written-down amount is in the provision for bad and doubtful debts in Group.

The auditors do what company’s say, unless of course they no longer want to audit the company in the future 

The auditors can’t force the company to write off the debt.  They can make a statement in the audit report, but they can’t force a company to write something off the directors believe will be repaid.

[Pragmatist]

If it’s as safe as houses then why couldn’t we borrow it off Barclays at a significantly lower rate?

Barclays no longer lend to football clubs.  Nor do any of the other mainstream banks. MSD and Macquarie are the only lenders in the market currently.

[Malcolm Tucker]

It hasn’t been written off - it has been impaired with a provision.

Not sure if the auditors can force the club to post the provision or not but they can give an adverse opinion on them if they believe the balance sheet to be overstated. Otherwise there’d be no point in having an audit if you could just post any old shite.

---

If it’s as safe as houses then why couldn’t we borrow it off Barclays at a significantly lower rate?

Barclays no longer lend to football clubs.  Nor do any of the other mainstream banks. MSD and Macquarie are the only lenders in the market currently.

Fair enough. Sensible from a PR perspective, I guess.