Furious West Brom shareholders demand to see club accounts after £20m loan
Shareholders are demanding to see the Albion’s accounts following confirmation the club had taken out £20million loan secured against assets including The Hawthorns and training ground.
Baggies supporters were rocked yesterday when plans to take out the figure from MSD Holdings, a New York-based investment firm, across a four-year period were confirmed.
The borrowing, for which interest rates were not confirmed, was taken against all West Bromwich Albion Group assets. It is understood Albion are very confident that ‘last resort measures’ of selling such assets will not be reached.
In a letter to shareholders dated December 20, WBA Group confirmed plans to enter a loan agreement with MSD, stating ‘the proceeds will only be used for general corporate or capital purposes of group and its subsidiaries’.
It is understood a significant number of shareholders are deeply disappointed and frustrated that the significant loan was confirmed before many even received notice of the intentions via what they feel is a hurried letter ‘rushed through at an unhealthy rate’.
In the letter, believed to be signed from Group director Xu Ke, known as Ken, stated shareholders’ ‘entitlement’ to vote on the resolution, but added it will come into effect regardless once passed by majority shareholder, Jersey-based WBA Holdings and controlling shareholder Guochuan Lai.
They feel a lack of ‘correspondence’ – despite a club statement on Wednesday stating ‘the club has conresponded with all group shareholders in connection with the written shareholder resolution’ – goes against shareholders’ basic rights.
“What a way to treat many of your most loyal and long-standing supporters, some of whom have supported the club in financial terms in the past,” one shareholder told the Express & Star. “This whole episode seems to be a fundamental breach of the rights attaching to even minority shareholders.”
Shareholders, who make up around 12 per cent of WBA Group and those not belonging to Lai, are also concerned at the lack of clarity on terms and conditions of the move, including interest rates and other factors.
It has been confirmed the loan was required to fund ‘general business operations’ given the ending of parachute payments this summer following Premier League relegation. Some shareholders fear such urgency speaks volumes of struggling finances and want the Group’s board – which consists of just Xu Ke – to release accounts drafted 12 months to June 2022 to confirm the landscape.
“We assume that MSD have been shown a copy of the draft accounts for the 12 months to 30th June 2022,” a shareholder said.
“I would urge our board, which bizarrely means just Ken, to publish these accounts without delay.”
It was added: “This affects tens of thousands of loyal supporters who can now see the future of the club in jeopardy.”
The £20m figure is separate to a £4.95m loan taken out by Lai to aid one of his companies, Wisdom Smart Corporation, in March 2021. A second deadline to repay this fee, after the first was missed, is December 31 – with a final banking day tomorrow before time runs out.
It is understood these fees are separate and, despite fears, the MSD figure will not be used to help repay the outstanding £5m. It remains to be seen if and how much of the loan or repayment will be used to back head coach Carlos Corberan in the upcoming transfer window.
Shareholders want assurances no money has left the club for purposes unrelated to the club since the approval of the previous accounts in March 2022. Chief executive Ron Gourlay has stressed that no money will leave the club under his watch.
