Baggies investor slammed by China Watchdog

Troubling questions - again! - about Albion ownership

In the latest draft from my forthcoming book “Where’s The Money Gone - One Fan’s Football Finance Odyssey” I reveal how a key investor in WBA has angered authorities in China.

An investment company with a significant stake in West Bromwich Albion has been accused by China’s financial watchdog of failing to “truthfully disclose” details of its assets and liabilities.

The firm involved is the Yunyi Investment Management (Shanghai) Company.

They have a 55% stake in the similarly named Yunyi Guokai (Shanghai) Sports Development Ltd, which in turn owns 88% of Albion’s holding company, under the control of Guochuan Lai.

According to publicly available records, the main beneficiaries of Yunyi Investement Management (Shanghai) Company appear to be two individuals who are not widely known in the UK – Wang Qin and Liu Lan.  Guochuan Lai’s role in the company – if any – is not clear.

Yunyi Investment has been sharply criticised by the China Securities Regulatory Bureau - a financial regulator - a story reported in a respected financial journal.

The CSRB said:

On February 20, the Shanghai Securities Regulatory Bureau issued the "Decision on the Issuance of Warning Letter to Yunyi Investment Management (Shanghai) Co.”.

It was found that the company, in the course of its private equity fund business activities, had the following facts: it failed to truthfully disclose to investors the individual financial data of the underlying investments, and failed to disclose to investors the assets and liabilities of the fund and the expenses borne by the fund in accordance with the contractual agreement.

The above facts violated Article 24 of the Provisional Measures for the Supervision and Administration of Private Investment Funds. In accordance with Article 33 of the Provisional Measures for the Supervision and Administration of Private Investment Funds, it is hereby decided to take the supervisory and management measures of issuing a warning letter to the Company and to record it in the integrity file of the securities and futures market.

The Company shall strengthen the study of relevant laws and regulations, enhance the awareness of standardized operation and effectively protect the legitimate rights and interests of investors.”

The warning is effectively a rap on the knuckles by the authorities, and poses yet more troubling questions about the financial underpinning of The Baggies. Fans are so concerned that 4,000 of them recently staged a protest march to the stadium under the Action For Albion banner.

In a separate and apparently unrelated article on a sports’ website published in China on Feb 27, an opinion piece discussed the Baggies controlling shareholder Guochuan Lai, dubbed "the first person in China to acquire a Premier League team".

The report suggests that Lai is the Executive Partner of Yunyi Investement Management (Shanghai) Company – the company which has fallen foul of the regulator.

Don’t worry if you find all this confusing.   You’re not the only one.  In a previous post I revealed details of the labyrinthine ownership structure of the Baggies which indicated that there are more than 80 investors in the club.

Beneath this is another layer of ownership, which one financial expert told me extends to more than 1,000 business entities in China, all of whom - one way or another – have a financial interest in the football club.

West Bromwich Albion have been contacted for comment.

Thanks to Chris Lepkowski for tipping me off about this.   I’ve verified details with the help of a China expert, using original sources in China. Chris and I discuss this in the latest episode of the Liquidator podcast.

If anyone mentioned in the article wishes to have a Right of Reply, please email goldbergradio@gmail.com