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Carson Yeung And Our Future Finances; according to the HK Standard
Topic Started: Jul 8 2011, 05:12 AM (646 Views)
Trueblood
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Kenny Burns
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Not a good scenario if comes to fruition

http://www.thestandard.com.hk/news_detail....r=20110708&fc=7

The final whistle?

Natalie Wong

Friday, July 08, 2011


What's known as "the beautiful game" - football - has turned real ugly for Carson Yeung Ka-sing. But the challenge of handling a big reverse on the field of sport fades into relative insignificance compared to what the Hong Kong entrepreneur now faces in a court of law.
To understand why he has been shown a glaring red card, flash back first to the VIP stand at London's Wembley Stadium on April 27. It's Yeung's 51st birthday, he beams and the Carling Cup gleams after his club, Birmingham City, beats Premiership rivals Arsenal 2-1.

Next, forward to May 22 and another London stadium, Tottenham Hotspur's White Hart Lane ground. Here, there's nothing to cheer about for Yeung or Birmingham players and fans. For it's another 2-1 scoreline, but Birmingham is on the wrong end of it. That means relegation from the lucrative Premier League for a club that Yeung took over in 2009 after two years of trying.

Now fast forward to late on Wednesday last week, and Yeung is preparing for a night in a holding cell at police headquarters in Wan Chai. That's as charges of money laundering, with a sum of more than HK$721 million involved, are laid against him. There's also a likelihood his personal assets of about HK$635 million worldwide will be frozen.

It seems these enormous cracks in Yeung's worlds of football and business appeared at about the same time. As Birmingham teetered out of the Premiership, staff at a bank in Hong Kong spotted an unusual pattern in a series of Yeung-lin

ked cash transactions and reported what they saw as suspicious activity to police.

Investigations came to a head last week when Yeung, under arrest, was led by officers of the narcotics bureau's financial investigations unit from his home on The Peak and then his appearance in Eastern Magistrates' Court the next day, June 30. The charge sheet listed five counts of "dealing with property known or believed to represent proceeds of an indictable offense."

Prosecutor Hayson Tse Ka-sze told the court that Yeung's four Wing Lung Bank accounts and one HSBC account were suspected to have been used for money laundering between January 2001 and December 2007, involving more than HK$721 million.

Three of the accounts were found to have deposits of HK$632 million, but only HK$1.65 million was reported as taxable income. Additionally, two accounts in his father's name had deposits of HK$88.4 million, but only HK$6,880 was reported as taxable income. The money was later transferred on Yeung's instructions.

Denies wrongdoingYeung, who denies wrongdoing, was freed on bail of HK$7 million and will appear in court again on August 11.

Troubled Birmingham's troubled chief is not, however, in any position to fly to the club's St Andrews headquarters in the English Midlands' city to try to administer much-needed emergency treatment. For he had to surrender his travel documents and must report regularly to police.

And what is shaping up to be a long legal tussle also gnaws at Birmingham. If found guilty the boss could be in prison for up to 14 years and face a hefty fine.

Still, Birmingham's situation is so dire that its fate may be sealed even before Yeung's case is completed. It could certainly be that Yeung will no longer be in control of Birmingham City, on which he's reckoned to have spent at least HK$1 billion.

He runs the club through having the title of president and holding 94 percent of parent company Birmingham International Holdings, listed in Hong Kong but registered in the Cayman Islands. Trading in shares of BIH, which was formerly known as Grandtop International Holdings, is currently suspended.

Under Football League rules, any director of a club must step down if convicted in a case involving dishonesty. There's more. The president of the Asia Pacific Law Association, solicitor Phyllis Kwong Ka-yin, points to the expectation the club's finances will be impacted because of a freeze on Yeung's assets.

She adds: "Yeung, as chairman of a listed company, can be recalled by shareholders if he fails to perform his duty during the prosecution period."

For sure, Yeung's arrest compounds the challenge for the famous football club, and there's the prospect of much worse to follow.

Besides having to come to terms with a big drop in revenue because of its second-tier status, Birmingham City must also convince the English Football Association that the club's finances are not a major cause for concern. Failure could lose the club its place in the new season's Europa League, which should be its reward for winning the Carling Cup.

Even if Birmingham City does make it to Europe, there could be impossible struggles on and off the field. For a cutoff of funding from Yeung would mean the club trying to make do with a very ordinary, perhaps wholly inadequate, squad of players, and one scenario is that the club will be put up for sale.

Although club chief executive Peter Pannu has been at pains to stress there is no connection between the laundering charges and Birmingham City finances, an investment banker close to Yeung told Eastweek, sister magazine of The Standard, that the situation is definitely a worry.

"Relegation from the Premiership is expected to result in an estimated HK$100 million drop in revenue over a season," he says. "In addition, as the club's president has been embroiled in a money-laundering probe, it will be more challenging to get advertisements and lure investment."

Birmingham City has also moved to raise cash by selling top players. The expectation around St Andrews of an injection of capital by Yeung is fading.

In the buildup to Yeung's legal strife - and coincidentally by all accounts - BIH executive director Allan Ip Wing- lun and independent non-executive director Chang Kin-man stepped down for personal reasons last month. Manager Alex McLeish resigned two weeks later to join city rivals Aston Villa.

Former Newcastle manager Chris Hughton stepped into McLeish's boots quickly enough, offering fans some hope that the nightmare that started with relegation could actually end.

But then fans saw scenes of the club's president being driven away in a police vehicle and read with bewilderment the reports of the laundering charges. Irking them further was a media swipe about Hughton going on board "a pirate ship."

The new manager has tried to reduce the heat by claiming the laundering charges against Yeung will not affect the club, claiming "they are very much side issues." That's what he says.

Back to reality and, no matter how shocking the charges, it is clear that Yeung was shown yellow cards of caution before the recent up-down tumult.

He had earlier this year been "hounded by numerous creditors in a number of sectors," claimed one source.

One sign of those troubles came when Yeung surprised many who know something of him by mortgaging his luxury home, 31B Barker Road on The Peak, in return for a loan of HK$150 million to support the club's operations.

He had bought the 5,900-square- foot apartment from Joseph Lau Luen- hung, chairman of Chinese Estates Holdings, for HK$146 million - cash - in 2005. Its market value today is estimated to be more than HK$360 million.

Yeung also mortgaged another property under his name last November.

He has also faced other legal problems over the years. A recent one concerned possession of a luxury flat at Ying Piu Mansion in Mid-Levels.

Heritage International Holdings executive director Peter Ong, the younger brother of solicitor and actress Mary Jean Reimer, sought a writ of possession in the High Court for the flat from Yeung and his ex-wife, Li Wing- sze.

Ong said it was supposed to go to him in 2008 as security against the payment of HK$20 million that Yeung promised him for acting as the middleman in the acquisition of Chinese- language newspaper Sing Pao Daily News from the SMI Publishing Group.

Further back, in 2004, Yeung pleaded guilty to charges of failing to declare his interest in a company called Cedar Base Electronic in Hong Kong and paid a fine.

And then there was strife in October 2009 after Yeung completed the takeover of Birmingham City. He was sued by London-based investment bank Seymour Pierce, which claimed a fee of HK$27 million for its role in introducing Yeung to Birmingham. But then that was settled by the club.

As for Birmingham City-related finances, Yeung raised as much as HK$1.3 billion through a share placement, but shares of BIH went down to HK$0.154 at the end of last month before it was suspended from trading. That was a 43-percent drop from this year's peak of HK$0.27, seen in February.

In addition, there has been a lack of return on his investment. Recent club accounts show debts of more than HK$365 million, of which HK$23 million is owed to HSBC. Its freehold land and buildings, including the St Andrew's stadium, have been pledged to the bank as security.

Yeung's business life has been a cause for conjecture for quite a while, including trying to figure just how much he's worth - an exercise that billed him as one of Hong Kong's "mysterious rich."

Details of his start-up years are indeed few. We do know he was 19 when he returned to Hong Kong from London, and it was in the 1990s that, trained as a hairdresser, he opened a barber's shop called Vanity at the Royal Garden Hotel in Tsim Sha Tsui. Somewhere along the way he was the head of human resources for a gas company.

Then came what were said to be handsome returns on property plays and a move into the mainland with investments in Chongqing, Liaoning and Inner Mongolia.

The Asian financial crisis in 1997 caused him grief along with many others, and investments in penny stocks hurt. But in 2004 Yeung flexed new muscle when he co-founded Greek Mythology, a luxury casino in Macau.

The Macau gambling business is said to have produced big money for Yeung and powered him into influential circles in the mainland.

But activities in Hong Kong business don't appear to have paid off, including taking the major stake in Sing Pao Daily News in 2008. There was bad publicity after claims by former employees about millions of dollars owed in back wages and Mandatory Provident Fund contributions.

Deadly silent

A Sing Pao staffer says most of 200 employees now worry about the daily's finances because of the allegations against Yeung. "The newsroom fell deadly silent when the news of the arrest of out top boss was broadcast on television TV," he says.

"Some staffers have gone through times when they were owed several months' wages. They worry that if Mr Yeung is put behind bars the same thing will happen again or that the company will close."

After Yeung was released on bail, in fact, senior managers of Sing Pao visited his Barker Road home to seek reassurances, but they failed to gain admission.

Yet Yeung enjoys the media, or rather his place in it. He has not been shy about talking publicly on financial matters in another publication he controls, Wealth magazine. The cover story for the inaugural issue was about how he aimed for a profit of HK$2 billion from Birmingham City.

Also playing the field, Yeung laid ambitious plans for football academies in 10 mainland cities.

Yeung is also a far-from-modest giver, claiming to have donated more than HK$60 million to mainland charities since 2008. More than HK$24 million was used to build schools that bear his name.
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Mr. Blue
Geoff Horsfield
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I don't like the fact he's pledged St. Andrews to HSBC as security. Doesn't make me feel very secure at all.....
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Woodbine
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Mikael Forssell
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We were looking for club exposure across China and now we have got a lot more than we thought possible. Come August 11, everyone in that country will know who Birmingham City are. Fantastic! :whistle:
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mybluearmy
Jose Dominguez
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The author attributes 94% of BIHL to Carson, when in fact he only owns a quarter of it. Article not to be taken as gospel, methinks.!
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bluess7
Frank Worthington
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Lazy journalism.......it still claims we could lose our spot in Europe when UEFA have made it quite clear we are ok and have issued our licence!
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andyjjj
Geoff Horsfield
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I just hope he's forced to sell the club, and with all the media exposure in Hong Kong showing us winning the carling cup etc, a wealthy chinaman is thinking he'll take it off his hands.
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bluess7
Frank Worthington
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Why?? We have an owner who has pumped more money into this club that than any previous board, made us one of the top spending clubs and oversaw the winning of our first major Wembley final.......he is now being blamed for all our failures when his only mistake was being honourable and staying loyal to a very poor manager :(

And as for money laundering, from everything I've read, it's more like a spot of tax evasion......not exactly crime of the century.
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Hatton
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Martin Grainger
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I must admit I am worried a little for the future of our club, did Alex leave because he could see this coming?
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sheffield_blue
Martin Grainger
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Trying to think what he was doing in 'London's' Wembley Stadium on April 27th.

KRO

Sheffield Blue
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Kaje
Garry Pendrey
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I'd actually rather we were sold on to be honest, and that they then hurry up and free some transfer funds so we can strengthen further.
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Raters
Bob Latchford
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bluess7
Jul 8 2011, 07:15 AM
it's more like a spot of tax evasion......not exactly crime of the century.

Just think about that statement next time you're in a queue waiting to see a NHS doctor.....
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deanlad
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Garry Pendrey
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bluess7
Jul 8 2011, 07:15 AM


And as for money laundering, from everything I've read, it's more like a spot of tax evasion......not exactly crime of the century.

I wonder if Al Capone thought that. ;)
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DNK
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Frank Worthington
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Kaje
Jul 8 2011, 11:31 AM
I'd actually rather we were sold on to be honest, and that they then hurry up and free some transfer funds so we can strengthen further.

I agree. I dream that some oil rich Sheik will come in and buy us. I'm not saying Yeung has failed us or that it will all go pear shaped with him at the helm. I just don't like all the mystery and uncertainty, and the people resigning mysteriously.

Considering we were all supposed to be "Family" I feel more like the shunned red headed stepchild who never gets a birthday card and daddy is always away on business and never has time for me :unsure:
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blue both nostrils
Geoff Horsfield
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bluess7
Jul 8 2011, 07:15 AM
Why?? We have an owner who has pumped more money into this club that than any previous board, made us one of the top spending clubs and oversaw the winning of our first major Wembley final.......he is now being blamed for all our failures when his only mistake was being honourable and staying loyal to a very poor manager :(

And as for money laundering, from everything I've read, it's more like a spot of tax evasion......not exactly crime of the century.

Behave "very poor manager "
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Des
Malcom Page
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I feel sorry for CY no doubt about it he tried to do the right thing for the club but its all gone to rat s**t!

KRO
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midland red
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Mikael Forssell
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Hatton
Jul 8 2011, 08:33 AM
I must admit I am worried a little for the future of our club, did Alex leave because he could see this coming?

No.

He resigned by email to thus make himself available for Villa - whom he joined in 4 days.

Where have you been ? :D

Alex resigned Sunday 12th June
Carson arrested Wednesday 29th June.

Two and a half weeks later.

What is he psychic ?

;)
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curlyminogue
Unregistered

blue both nostrils
Jul 8 2011, 02:10 PM
bluess7
Jul 8 2011, 07:15 AM
Why??  We have an owner who has pumped more money into this club that than any previous board, made us one of the top spending clubs and oversaw the winning of our first major Wembley final.......he is now being blamed for all our failures when his only mistake was being honourable and staying loyal to a very poor manager :(

And as for money laundering, from everything I've read, it's more like a spot of tax evasion......not exactly crime of the century.

Behave "very poor manager "

You're absolutely right, of course: McScrotum was far worse than that.
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The_future_is_blue
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Frank Worthington
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tl;dr
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