Lower League Armageddon Awaits

[Pragmatist]

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.

They will only do what the company wants if they are able to qualify the accounts accordingly to state why they are not a true and fair view. 

If the directors here had refused to write down the Wisdom Smart loan then Azets would have had to state that they do not agree with that treatment and as a result the balance sheet was overstated by £5m.

[Fulham Fallout]

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.

They will only do what the company wants if they are able to qualify the accounts accordingly to state why they are not a true and fair view. 

If the directors here had refused to write down the Wisdom Smart loan then Azets would have had to state that they do not agree with that treatment and as a result the balance sheet was overstated by £5m.

Agreed.  

Nice cop out for the directors, to blame the auditors for wiping off the debt.  

Brush is under the carpet and hope the fans forget about it.

[KRO]

I know this may upset some, but the greatest power we have is voting with our feet. The only way to rid ourselves of this owner is likely to be Administration. Starve the bastard of funds and you’ll hasten that outcome. I’m done with it under this owner.

I don’t think it’s that easy. Certainly not in our case which of course is different to yours because of our Hong Kong Stock Exchange listing and it’s intrinsic value alone being worth probably more than the Club is. But the vast majority of money the Club earn isn’t from paying supporters. Then take the costs involved from hosting games and it’s worth even less. If attendances dropped massively you’d go from signing Dike to Jutkiewicz, Jed Wallace to Leko again etc. It would be the same situation with shitter players on the pitch I reckon

[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.

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.

If you think that any fund operates a business model to be "lender of last resort" then you are wrong  MSD we're at serious risk of losing a significant amount of money at Derby 

The fact they were prepared to work with Derby when Morris was owed so much in itself should ring alarm bells. They heaped fuel on the fire.

The only way MSD will be able to keep control of West Brom will be to appoint a Non-Executive Director to sit at Board meetings. They didn't do it at Derby.

You might know Company Law very well, Prag, but law and practice are two very different things.

[Tom Joad]

Probably worst case scenario is to continue in the same vein as we are. For all the talk about how its against the law to asset strip, it happens. I am still very suspicious about the entire Periera fiasco, the Chinese striker no one ever saw, the mystery surrounding the Peace loan which was inherited by Lai. The mystery 2M, the 5M loan to a company that doesn't trade? And on here, we have (undoubtedly) experts in finance and company law who can't be sure what's going on. This is where A4A have done so well. They can't stop the shenanigans but by keeping us in the spotlight, now all in football, finance, the EFL, parliament and of course, us fans, can get to the truth eventually.

[Pragmatist]

I know this may upset some, but the greatest power we have is voting with our feet. The only way to rid ourselves of this owner is likely to be Administration. Starve the bastard of funds and you’ll hasten that outcome. I’m done with it under this owner.

I don’t think it’s that easy. Certainly not in our case which of course is different to yours because of our Hong Kong Stock Exchange listing and it’s intrinsic value alone being worth probably more than the Club is. But the vast majority of money the Club earn isn’t from paying supporters. Then take the costs involved from hosting games and it’s worth even less. If attendances dropped massively you’d go from signing Dike to Jutkiewicz, Jed Wallace to Leko again etc. It would be the same situation with shitter players on the pitch I reckon

What Hong Kong Stock Exchange listing?

[KRO]

Just for clarity when I say ‘our’ I mean Blues.

[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.

---

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.

If you think that any fund operates a business model to be "lender of last resort" then you are wrong  MSD we're at serious risk of losing a significant amount of money at Derby 

The fact they were prepared to work with Derby when Morris was owed so much in itself should ring alarm bells. They heaped fuel on the fire.

The only way MSD will be able to keep control of West Brom will be to appoint a Non-Executive Director to sit at Board meetings. They didn't do it at Derby.

You might know Company Law very well, Prag, but law and practice are two very different things.

MSD’s risks were higher with Derby than on most of their loans but they knew and accepted the level of risk when they invested.  Mel Morris not acting rationally did not help, but they ended up getting paid in full which justified their stance. 

I don’t accept that they need a NED at board meetings here. Monthly management accounts and copy bank statements will suffice and I’m sure that’s what they’re getting.

---

Probably worst case scenario is to continue in the same vein as we are.  For all the talk about how its against the law to asset strip, it happens. I am still very suspicious about the entire Periera fiasco, the Chinese striker no one ever saw, the mystery surrounding the Peace loan which was inherited by Lai. The mystery 2M, the 5M loan to a company that doesn't trade? And on here, we have (undoubtedly) experts in finance and company law who can't be sure what's going on. This is where A4A have done so well. They can't stop the shenanigans but by keeping us in the spotlight, now all in football, finance, the EFL, parliament and of course, us fans, can get to the truth eventually.

I would be far more worried if MSD didn’t have their loan and debenture.  By protecting their own interests re any further attempts to asset strip, they are also protecting us all.

---

Just for clarity when I say ‘our’ I mean Blues.

Got it - thanks!

[EastMidsBaggie]

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.

They will only do what the company wants if they are able to qualify the accounts accordingly to state why they are not a true and fair view. 

If the directors here had refused to write down the Wisdom Smart loan then Azets would have had to state that they do not agree with that treatment and as a result the balance sheet was overstated by £5m.

Agreed.  

Nice cop out for the directors, to blame the auditors for wiping off the debt.  

Brush is under the carpet and hope the fans forget about it.

I don't many of us fans will be buying that line though..... far from it !

---

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.

They will only do what the company wants if they are able to qualify the accounts accordingly to state why they are not a true and fair view. 

If the directors here had refused to write down the Wisdom Smart loan then Azets would have had to state that they do not agree with that treatment and as a result the balance sheet was overstated by £5m.

Agreed.  

Nice cop out for the directors, to blame the auditors for wiping off the debt.  

Brush is under the carpet and hope the fans forget about it.

I don't many of us fans will be buying that line though..... far from it !

[EastMidsBaggie]

What a dismal Easter for Albion but typical in so many ways - we perform woefully yet the P/O rivals all conspire to fail just enough to get us a little false hope.

We need to get used to the mi/lower table mediocrity witnessed in the past six games I suppose. The new norm under this wretched regime.