Embargos, HMRC Payment defaults, non payment of wages, the usual under Dai Wrongge

[Moonfish]

In the EFL ruling for the recent 1pt deduction (3pts suspended) the club were clearly arguing Dai had the money, it was purely a cashflow/timing issue in getting it out of China. The events of this last week have clearly shown that not to be entirely accurate:

- We had a month to get the 125% of wages into an account with the EFL to avoid the 3pts suspended. This should have been plenty of time, yet we still failed to meet this requirement. There's no way we'd risk a 3pt deduction if the money was available and there was a way of getting it out of China in time, therefore I can only conclude the cash isn't there (or it is and the problems are deeper)
- Rumours are that we've borrowed the cash to pay our last wage bill from SCL. Why would we need to do this, as pointed out by others our outgoings (predominantly wages) are incredibly predictable, and if the cash was there in China why wouldn't we just draw it down earlier each month or get one lump sum payment over to cover say the next 3months wages so that we don't have this issue every month?
- If Dai had the cash why is it being strongly rumoured that we are about to late pay HMRC for the fourth time? Anyone in business knows the first person you make sure you pay each month is the tax man, this is inexcusable.
- Lastly, where is our Bank in all of this? If a Business had genuine timing/cashflow issues but the money was there, they'd simply approach their bank for some form of working capital or revolving credit facility. The fact we've not been able to do this, and instead have potentially turned to SCL last month and are looking for an external investor to provide liquidity, is by far the biggest red flag to me in all of this as it signals that our troubles run far deeper than it just being difficult to get money out of China. Why won't our bank (Bank of China?) step in to provide the short term finance? Do they know more about Dai's financial issues in China and its put them off, are they simply maxed out on exposure to RFC, or perhaps the non-payment of Tax has triggered an event of default on our existing debt? There is something they clearly don't like and that should genuinely concern us all.

[Snowflake Royal]

This may come as a shock to some but Dai, through the club, is not being honest about what is happening.

[Sutekh]

In the EFL ruling for the recent 1pt deduction (3pts suspended) the club were clearly arguing Dai had the money, it was purely a cashflow/timing issue in getting it out of China. The events of this last week have clearly shown that not to be entirely accurate:

- We had a month to get the 125% of wages into an account with the EFL to avoid the 3pts suspended. This should have been plenty of time, yet we still failed to meet this requirement. There's no way we'd risk a 3pt deduction if the money was available and there was a way of getting it out of China in time, therefore I can only conclude the cash isn't there (or it is and the problems are deeper)
- Rumours are that we've borrowed the cash to pay our last wage bill from SCL. Why would we need to do this, as pointed out by others our outgoings (predominantly wages) are incredibly predictable, and if the cash was there in China why wouldn't we just draw it down earlier each month or get one lump sum payment over to cover say the next 3months wages so that we don't have this issue every month?
- If Dai had the cash why is it being strongly rumoured that we are about to late pay HMRC for the fourth time? Anyone in business knows the first person you make sure you pay each month is the tax man, this is inexcusable.
- Lastly, where is our Bank in all of this? If a Business had genuine timing/cashflow issues but the money was there, they'd simply approach their bank for some form of working capital or revolving credit facility. The fact we've not been able to do this, and instead have potentially turned to SCL last month and are looking for an external investor to provide liquidity, is by far the biggest red flag to me in all of this as it signals that our troubles run far deeper than it just being difficult to get money out of China. Why won't our bank (Bank of China?) step in to provide the short term finance? Do they know more about Dai's financial issues in China and its put them off, are they simply maxed out on exposure to RFC, or perhaps the non-payment of Tax has triggered an event of default on our existing debt? There is something they clearly don't like and that should genuinely concern us all.

Without an expert in the current world of Chinese banking we can only speculate but largely paying the bills has never been an issue for the club until last season, which I believe coincided with the result of policies implemented by the Chinese government to make things very awkward for Chinese nationals to move money out of China to anywhere else in the world - and then there's the investigation that has been going on into Dai's company (which has only just finished) that may well have played a part in the delays.

The question is what can be done about it and the best answer would be to sell the club but as we know there aren't exactly very many multi billionaires out there looking for a lower division club to lose large amounts of money on each month.

[Snowflake Royal]

The idea that you have to be a multi-billionaire to buy a L1 football club is one of the stupidest things I've ever heard.

[blythspartan]

I honestly can’t be oxf*rd with this anymore. I can’t control what will happen with Dai etc.,but I’m currently enjoying going to the games and supporting the youngsters.

I have some money put aside if we ever get the option as fans to buy a stake in the club, but Dai would need to oxf*rd off first.

[Lower West]

then there's the investigation that has been going on into Dai's company (which has only just finished) that may well have played a part in the delays.

Dai was also personally named at the outset when the share suspension was announced last October. Despite standing back from direct involvement in the running the company a while back. Wouldn't be a surprise therefore if his own financial activity in China was curtailed immediately by the authorities as a consequence.

[From Despair To Where?]

He was cleared of any wrongdoing last month but there is an ongoing investigation which is why trade in the shares is still suspended. If the bulk of his wealth is held in company stock, he cannot raise cash by selling stock.

From my limited understanding of the case, it's an accounting irregularity that occurred prior to him buying into the company that only came to light after he bought into the company. Something to do with directors' loans.

[Elm Park Kid]

Apologies if this has been put on another page already - but just to confirm that the 3 point deduction for not paying the 125% fund is a one-off. Dai has point blank refused to pay it and as far as the EFL is concerned the punishment they gave us is the end of the matter.

[skipper]

Apologies if this has been put on another page already - but just to confirm that the 3 point deduction for not paying the 125% fund is a one-off. Dai has point blank refused to pay it and as far as the EFL is concerned the punishment they gave us is the end of the matter.

Can you link us to this confirmation?

[Snowflake Royal]

Apologies if this has been put on another page already - but just to confirm that the 3 point deduction for not paying the 125% fund is a one-off. Dai has point blank refused to pay it and as far as the EFL is concerned the punishment they gave us is the end of the matter.

Can you link us to this confirmation?

There's no confirmation needed. It's just part of the decision against us.

We got a 4 point penalty. 3 of those points were suspended on the condition that we pay the 125% into an account and not be late paying the players again for x period.

We didn't make payment, so the 3 points are deducted. To have more deducted we'd have to commit a new offence, there be a new investigation and a new finding of a breach of rules by the independent panel and a new penalty.

[Elm Park Kid]

Apologies if this has been put on another page already - but just to confirm that the 3 point deduction for not paying the 125% fund is a one-off. Dai has point blank refused to pay it and as far as the EFL is concerned the punishment they gave us is the end of the matter.

Can you link us to this confirmation?

I was told this directly by a reliable source. Has never been wrong so far.

[Royals and Racers]

When is the next date we need to worry about ?

[Mid Sussex Royal]

When is the next date we need to worry about ?

Friday week - payday.

I guess if we don't pay the tax this week then if EFL true to form we will get a transfer embargo which will be meaningless on the basis of Selles saying we are maxed out re budget.

[MartinRdg]

When is the next date we need to worry about ?

Friday week - payday.

I guess if we don't pay the tax this week then if EFL true to form we will get a transfer embargo which will be meaningless on the basis of Selles saying we are maxed out re budget.

And the fact that we already in a transfer embargo for the next three windows....

[skipper]

Apologies if this has been put on another page already - but just to confirm that the 3 point deduction for not paying the 125% fund is a one-off. Dai has point blank refused to pay it and as far as the EFL is concerned the punishment they gave us is the end of the matter.

Can you link us to this confirmation?

There's no confirmation needed. It's just part of the decision against us.

We got a 4 point penalty. 3 of those points were suspended on the condition that we pay the 125% into an account and not be late paying the players again for x period.

We didn't make payment, so the 3 points are deducted. To have more deducted we'd have to commit a new offence, there be a new investigation and a new finding of a breach of rules by the independent panel and a new penalty.

I should have been clearer, that was my fault. I meant to ask, "Can you link us to this confirmation of it being a one off penalty, and won't be repeated every time Dai fails to pay in 125%?"

Because I fear we'll repeat that a few times this season.....

[Snowflake Royal]

Can you link us to this confirmation?

There's no confirmation needed. It's just part of the decision against us.

We got a 4 point penalty. 3 of those points were suspended on the condition that we pay the 125% into an account and not be late paying the players again for x period.

We didn't make payment, so the 3 points are deducted. To have more deducted we'd have to commit a new offence, there be a new investigation and a new finding of a breach of rules by the independent panel and a new penalty.

I should have been clearer, that was my fault. I meant to ask, "Can you link us to this confirmation of it being a one off penalty, and won't be repeated every time Dai fails to pay in 125%?"

Because I fear we'll repeat that a few times this season.....

Yeah, the EFL decision that was published.

It's a four point penalty, of which 3 were suspended, and have been applied because of a failure to meet the conditions for suspending them.

https://www.efl.com/news/2023/september/13/efl-statement--reading-fc/

https://www.efl.com/news/2023/august/16/efl-statement--reading-fc/

There is no further requirement to deposit 125% of wages in a holding account.

[windermereROYAL]

The next judgement will come then when and if we fail to pay wages on time.

[Snowflake Royal]

Correct, but it'll require a further investigation and won't automatically be 3 or 4 points

[WestYorksRoyal]

Correct, but it'll require a further investigation and won't automatically be 3 or 4 points

What did Wigan get per non payment in the summer, which was after last season's breach? 4 points each time? Would be a pretty clear precedent and near impossible to justify anything different for us.

[Snowflake Royal]

Correct, but it'll require a further investigation and won't automatically be 3 or 4 points

What did Wigan get per non payment in the summer, which was after last season's breach? 4 points each time? Would be a pretty clear precedent and near impossible to justify anything different for us.

Very likely 4 points. But we're naughtier boys than Wigan.