The announcement can be viewed here.
Confirmation of money used to fund BCFC
The first thing the announcement says is to confirm that the company entered into two loan agreements to fund BCFC. To wit, that on 2 August 2017 they received a loan facility of up to HK$100million attracting an interest rate of 4.5% from Dragon Villa which has been utilised in full; and that on 10 October 2017 they received a loan facility of up to HK$150million from Chigwell Holdings attracting an interest rate of up to 6.5%, of which HK$70million has been utilised.
These figures match up exactly with the calculations I made in the previous article in this series.
The announcement goes on to say
The Company borrowed the above loans (collectively the “Loans”) primarily for financing the funding requirement of the operation of the Group’s football club business and general working capital.
This is the first confirmation that money has been sourced from outside the holding company to help fund the football club.
Confirmation of owners of Dragon Villa and Chigwell Holdings
The announcement goes on to clarify the two subscribers, confirming disclosures made to the stock exchange.
Dragon Villa is 100% owned by Mr Lei Sutong while Chigwell Holdings is ultimately beneficially owned by Wang Lehai.
This is interesting in that neither beneficial owner is named as Wang Yaohui (“Mr King”) despite him being named as the borrower on debenture documents regarding Chigwell Holdings.
The announcement also confirms that (my emphasis)
To the best of the knowledge, information and belief of the Directors having made all reasonable enquiries, Dragon Villa and Chigwell and their respective ultimate beneficial owners are Independent Third Parties and there is no relationship, business arrangement or understanding among them.
This is important too; if these parties were acting in concert then they would potentially attract the attention of the EFL as the threshold for owners taking the Owners and Directors Test (OADT) is 10%.
While I believe that the directors of BSH have truly tried to enquire about Wang Lehai and Lei Sutong, I believe they may be mistaken in saying that there is no relationship, business arrangement or understanding among them.
This is for two reasons.
Firstly, from information already linked on this site in previous articles it is possible to see that Wang Lehai and Lei Sutong are the two shareholders in Beijing Hong World Mastery Trading Group (北京宏世通达商贸集团), a company which owns most of another company (Sino-Tech Huafeng Industy (Group) Ltd) which counts Wang Yaohui (“Mr King”) as a shareholder.
Secondly, from information obtained from the Hong Kong companies register it is possible to see that Lei Sutong was formerly a director of Chigwell Holdings Ltd, ceasing that role on 5 May 2017.
What does this mean for BCFC?
As I’ve said previously, these are all small pieces in what is undoubtedly a huge jigsaw puzzle and as such it is imperative that people should not jump to conclusions.
However, that being said it is my belief that there are now more solid questions about the funding of BCFC other than rumours of shadowy background figures.
The [BCFC] directors have prepared detailed cash flow forecasts for the period to 31 December 2018 as part of the longer term forecasts prepared for the company. The forecasts show that BCFC needs additional funding of around £49.5M from BSHL for the period from July 2017 until December 2018.
With the BCFC accounts showing huge losses and £49.5mil needed to keep the company going, I believe it behooves us to ask questions about what is going on – especially as we have proof BSHL are now getting that funding from outside the company.
6 thoughts on “BSH: The Elusive Mr King – Pt 3”