Events on the pitch have precluded an update article on this being released until now, but the answer is very much yes.
Although it doesn’t seem much has happened on the surface, it doesn’t take much to understand what the Stock Exchange has done.
On receiving the massive deluge of emails – numbering in the hundreds – the Stock Exchange contacted BSH for their comments.
One limb of the complaint especially stuck in the craw in the BSH offices; the omission of details of the second EFL charge in the BSH accounts. This was left out quite simply because no one in Birmingham had thought to let their bosses in Hong Kong know about it.
Luckily, no sanction was put in place – however at the time of publication no one knew what would happen and a points deduction could well have put Blues into relegation trouble, which would mean a massive devaluation of the main asset owned by BSH.
In order to be compliant, two things have had to happen.
Firstly, the Birmingham-based board members at BCFC have now been forced to notify Hong Kong immediately of anything that could be construed as having a similar effect. This means that the board can no longer hide issues from their Hong Kong superiors in the hope it will go away.
Secondly, BSH now have to advise their shareholders of any issues in a timely manner, allowing investors the opportunity to consider their holdings in the company.
The upshot is pressure has been brought to bear to force the club and the company to be more transparent in their dealings.
With Blues struggling for a win and relegation now maybe more than an outside possibility, there have been opinions online that maybe relegation and administration would be good to force change at the club.
While it is possible that change could be forced by relegation and / or administration, the truth is both of those circumstances are pretty much the “nuclear option”.
There is no guarantee that relegation would force any change in ownership and might merely encourage the owners to stop funding the club, running it down over time to a point where administration becomes inevitable. During that time span, it would be increasingly hard for the club to bounce back to the upper tiers of the league.
Likewise, while administration would take the club out of the hands of the current owners, there is no guarantee that the club would be sold to anyone with huge amounts of money and / or the intention to spend it. It is the job of the administrators to get the best deal for the creditors – and the biggest creditor BCFC has right now is Birmingham Sports Holdings.
There is a better way.
While it’s pretty well known that the stock market listing is the most important thing to the owners of BSH, due to having an intrinsic value which is worth more than the club, that doesn’t mean that nothing can be done.
Circumstances are changing in Hong Kong; more Mainland China companies are able to launch IPOs (initial public offerings), meaning the value of a shell listing has dropped to around £30million in recent times.
It would appear that if the problem is with the owners desperate to hold on to the listing, then the solution is to make the listing as awkward and as devalued as possible.
The best bit is this has been done before; Carson Yeung was forced out because Birmingham International Holdings (as they were then known) were forced to suspend trading in their shares due to a rogue director (Peter Pannu) posting inside information online. With trading suspended and the board ripped apart, Receivers had to be called into protect minority shareholders.
While there is no guarantee that any BCFC director is stupid enough to “pull a Pannu”, ensuring the Stock Exchange continue to monitor and question the BSH board is only going to cause the owners to consider whether it’s worth it to hang on.
Paul Suen already has problems with other listed companies and is due to attend a Market Misconduct Hearing tribunal in October. He doesn’t need any more hassle.
Likewise, “Mr King” will not want to draw any more attention to his activities than he already has done.
As we saw across the expressway, in desperate times principles can go out of the window. It might be possible to force the sale of the club without any need for administration – and with the listing for once taking second place.
It’s not an easy road – but it would be preferable to force the sale of the club without the attendant difficulties administration causes.