If you want to read the 82-page circular to shareholders, you can do so at this link, while at this link you can read my piece when the sale was originally announced and at this link you can read a bit more about who Vong Pech and Oriental Rainbows are.
What’s an EGM? When is it?
The EGM is a meeting of BSH’s shareholders arranged to specifically approve one transaction – ie the partial sale of the club. Ostensibly it’s arranged so that shareholders can ask questions etc but realistically it’s a rubber stamp exercise to approve the transaction due to the number of shares concentrated in the hands of Paul Suen Cho Hung and those of the elusive Mr King’s (aka Wang Yaohui) placemen.
Normally these meetings would be held in a conference room of one of the many business class hotels in Hong Kong, but in these times of coronavirus this meeting will be held at the offices of Tricor-Alpha Corporate Secretarial Services Ltd in Causeway Bay.
The knock on effect of that is it will make it harder for any dissenting shareholders to cast a “nay” vote due to the strict protocols to enter the building – or for foreign shareholders such as myself, entry into Hong Kong itself.
The meeting will be held at 10:30am HKT (2:30am GMT) on December 8.
If approved, what does this mean for the club?
The obvious question on everyone’s lips is if this partial sale will herald a January window of spending at Blues. It’s an impossible question to answer – simply because this partial sale will make transactions to put money into the club less transparent.
While BSH will raise £5.4M from this sale, that money is earmarked mainly for paying down debts and working capital rather than investing in the club itself. However, what the partial sale does is opens a new avenue for money to be put into the club which would circumvent any need for regulatory approval from the Stock Exchange – making it more difficult for people like me to understand how much money is being put in, or where that money has come from.
There will be changes at board level. As part of the deal Vong Pech will have the right to add his own man to the board of the club. I surmised in my last piece on this that Suen’s man Jerry Yiu Chun Kong will be the man to make way.
There will also be a “strategic committee” put in place to offer a big picture assessment to the board.
Two names put forward are known while a third would be chosen by BSH. Mike Wiseman needs no introduction to Blues fans but Shanghai banker Zhou Desheng is another matter. His former university produced this glowing assessment of Zhou’s investment strategy, including into craft beer company Panda Craft. Maybe he’ll do something about improving the quality of beer available when fans return?
The next we’ll hear about this will be immediately after the EGM, when BSH will announce the results of the EGM.
Obviously the deal is subject to EFL approval; however I do not believe that this should be an issue. I have asked the EFL to confirm whether Vong Pech has already taken the Owners and Directors Test (OADT) in light of his shareholding but they have declined to comment.
For fans, the decision has to be if this is good or bad.
On the one hand, it should help ensure that the club receives funding despite BSH’s loan situation being maxed out; on the other hand there is no telling who or where that money will be coming from – or any warning if the tap will be suddenly turned off.