Owner Guochuan Lai owes West Brom £4.1m because of loan he inherited from Jeremy Peace
Albion owner Guochuan Lai owes the club £4.1million because of an historical loan he inherited during the takeover, the Express & Star can reveal.
When Lai bought an 88 per cent majority stake off Jeremy Peace for £200m in 2016, he inherited a £3.7m loan the holding company owed the football club.
It has since accrued interest and is now a debt of £4.1m.
Club accounts state there is ‘no fixed date for repayment’ and the loan is ‘payable on demand’, so in theory, whenever the club need the money, they can ask for it.
There is no indication Lai does not intend to honour this debt, or that he has ever taken money out of the club.
However, a number of Albion’s minor shareholders who own the remaining 12 per cent of the club are concerned the historical loan is yet to be repaid.
They believe the £4.1m could be useful for the seasons ahead now the Baggies have dropped out of the Premier League and face the financial downsizing that relegation to the second tier will bring.
The Baggies will receive a second parachute payment of £35m for the upcoming season, but that will be reduced to £15.5m the season afterwards.
Although Lai inherited the loan and did not take it out in the first place, the holding company owned by his company, Yunyi Guokai Sports Development Limited, is now responsible for it.
It's believed the loan, taken out when Peace was majority shareholder, was not repaid because it was accumulating interest at a rate advantageous to the club.
Lai has been reluctant to invest any further money into the club since spending £200m on his takeover in 2016.
It’s believed he did spend £6m on vanity project Zhang Yuning, a Chinese striker who never played for the club before he was sold to Beijing Guoan in February for an undisclosed fee.
But he has not invested anything more than that, having stated when he took over the club that he wanted it to remain ‘self-sufficient’.
Although the Baggies are expected to lose a number of high-profile players this summer, they will have a competitive wage bill for the Championship next season believed to be above the estimated £20m average for the division.
