BSH: The Great Wall of Silence

It’s been three days since Paul Richardson and Maxi Lopez turned up at St Andrew’s to tell the world that they’d exchanged contracts and were to become the next owners of Birmingham City. While there has been fairly extensive reporting of their meetings with club officials, the silence from Hong Kong has continued.

Hong Kong Stock Exchange

I will admit that I’m somewhat surprised that in the wake of so much publicity surrounding Richardson and Lopez rocking up at St Andrew’s that there has been no word from Birmingham Sports Holdings.

I would have thought that we had reached a point where BSH couldn’t continue to remain silent in this.

Lack Of Announcement

One of the good things about Richardson being so public in announcing that his consortium were exchanging contracts, is that he was asked pertinent questions by the press.

For example, when Brian Dick of the Birmingham Mail asked Paul Richardson on video that there was a contractual obligation to sell the remainder of Birmingham City plc to his consortium, Richardson said:

We will be getting the remainder of the business yeah … over two, two and a half years

Richardson also confirmed Brian Dick’s assertion that this agreement was legally binding.

This represents a change of position for BSH from June 14 when they confirmed to the HKSE that

As at the date of this announcement, the Company has not entered into nor exchanged any agreement to dispose of its approximately 75% interest in BCP, and BCP and the Club remain subsidiaries of the Company.

If we are to take Richardson at face value, then BSH have entered into an agreement to dispose of the 75% interest in Birmingham City plc and as such will need to confirm that to the stock exchange.

In addition to this, it’s considered best practice by Hong Kong listed to update shareholders within 21 days on news in an announcement which is pending. An example of this would be the disposal of Vong Pech’s 21.64% interest in Birmingham City plc.

It has been long past 21 days since we were told this and one would hope that in light of all the various news that has been swirling around here in the UK that BSH would make an announcement to clarify things properly.

Apparently, I’m not the only person who thinks this either.

Paul Richardson has been keen to tell people (including myself) that he requested BSH put out an announcement on Tuesday around the same time he arrived at the club to clarify and confirm matters; and that BSH declined his request.

In the interests of fairness, I have emailed BSH Company Secretary Robert Yam Pui Hang to ask for a comment.

Sadly, rather than answer my question or make any comment BSH saw fit to email me a formulaic response stating that the company mainly communicates via announcements to the Stock Exchange.

Talk about missing the point, eh?

As a shareholder in Birmingham Sports Holdings, I’ve got to admit that I’m disappointed in the lack of clarification surrounding this takeover, especially considering how volatile the share price has been of late.

With this in mind I have been in contact with the stock exchange of Hong Kong over the last few weeks to ask them if they can push BSH to provide clarity on this situation.

It goes without saying that this would be not only for the benefit of shareholders, but for fans too.

If things are as advanced as Paul Richardson is saying, then I personally would think Richardson should also be pushing the HKSE to force BSH to say something.

The lack of clarity doesn’t do anyone any favours and an announcement confirming that Richardson is in negotiation would help give substantial confirmation to this takeover and remove any possible worry from the minds of fans.

What’s next?

While Paul Richardson and his consortium speak to officials at St Andrew’s and the training ground to help them hit the ground running, there is only so much they can do until they officially get the word that they have control.

Most of what remains for them appears to be regulatory hurdles now.

Without confirmation from BSH on what is happening there I don’t want to make assumptions on what regulatory approvals are needed from the HKSE for at least the first part of the transaction to go through.

On this side of the world, there is the EFL to deal with.

There are basically two parts to what Richardson and his consortium need to do to get EFL approval.

The first part is quite simple; the EFL will need to see proof that Richardson’s consortium have the funds in place to run the club for at least a year on top of what they are paying for it.

I’m not an expert in high finance but I would think proof of an escrow account with the required funds (£30m or so) sitting in it should probably be enough.

The second part is a bit trickier – the “Owners and Directors Test” or OADT.

There’s been some confusion online as to who would need to submit documents to the EFL for approval with regards to this test.

Thankfully, the EFL have their regulations available online which include details of who needs to take the OADT.

“Owners and Directors” is a bit of a misnomer because in reality the test is also applicable to people who are neither owners or directors.

The list of “relevant people” who need to take the test is quite extensive, and I think is an effort from the EFL to ensure that people can’t hide behind a technicality to avoid taking the test for whatever reason.

Effectively, anyone who has any form of control or decision making has to take the test.

This means not only would Paul Richardson or Maxi Lopez would have to take the test, but also people like Matt Southall if he is indeed to become CEO.

Likewise, any new appointment as Chief Financial Officer, Chief Operating Officer or Managing Director would have to take the test.

This process could take two or three weeks to complete as there are a lot of documents to be submitted.

I would think that there may be time taken over some applications such as for Matt Southall, although it has been reported by The Athletic on Wednesday that they had seen a document that suggests that the EFL will not disqualify him as a ‘relevant person’ at a club.

While patience isn’t the strong suit of many Blues fans right now, I think at this moment in time it is something we all need to show.

There has been lots of rumour swirling around who is backing Richardson’s consortium; who he is looking to bring in and who might go out the door. Until the deal is confirmed, those are just rumours and I think we should be careful not to get too hung up on them.

The sooner official clarity is given, the better for all of us because any remaining doubts will then be swept away.

With this in mind, I plan to continue putting pressure on both BSH and the HKSE to force an announcement to confirm the status of the takeover.