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

[Lower West]

True, I guess wrongful trading is a crime for which Directors are individually liable. So it must be a risk. My concern with administration is it's not just a magic bullet to take 12 more points and get rid of Dai. I'd take that if it was, even if it means L2.

What it really means is a process lasting several months where talent is sold, operations are systematically stripped back and then we may have a further 15 points deducted if we don't agree to pay 25p to £1, presumably in L2. So it's a pretty terrible outcome.

We would probably have sell the training ground if Dai wants his money back.

Even if he didn't, the academy would probably either be closed down or stripped right back.

Considering that Dai is the main creditor, liquidation might see him get more than administration.

How is that even possible ?

Is Dai the main creditor though? What lies beneath the surface. Did he use his currently valueless shares (and pledge club assets) to secure borrowings to fund the expenditure? With numbers well in excess of £200m of debt bound to be complexity.

[tmesis]

How is that even possible ?

I was going to say it isn't but I'm not so sure. If he was going down this route then he'd move Bearwood into a serperate company not owned by Reading FC so the clubs assets will just he the players and maybe a few footballs etc, If it goes under all the debt is written off from all debtors including the owner, but he still holds the two big assets and can sell them on and get his money back. It's the other debtors who are owed money by the club who get screwed over.

Which would almost certainly be defrauding the creditors, of which he is only one, albeit the absolute majority creditor.

I'm not saying doing anything underhand.

If the clubs was liquidated the assets would be sold off to pay the debts, and Bearwood is definitely an asset. The money from that, plus anything else they can shift, would be used to pay of the people the club owes, including Dai. Given how long it is since we signed a player for money, we can't have too much in oustanding fees owed to other clubs, so I would imagine the vast majority of the debt is to Dai.

If the club went into administration, Dai would have to accept 5p in the Pound, or something small like that, which would probably work out less.

Perhaps the very worst case (for Reading) is liquidating the club, and selling the stadium to Mike Ashley. Asley then tries to set up a phoenix club to earn him rent, while the fans set up another, and there's a situation like Bury had with two clubs. I don't think that is likely though.

[WestYorksRoyal]

So another EFL charge for HMRC defaults this time. Has another club ever been deducted points for this? I get FFP breaches and non wage payments have precedent, but it feels like they're making this up as they go along.

I'd also add that the root cause of this is Dai making us unsustainable so that we're reliant upon his handouts, for which we've already been deducted 12 points.

This literally helps nobody while the sale process is ongoing. Makes getting rid of Dai less likely by creating issues for would be owners.

[Snowflake Royal]

William Storey
@richenergyceo
·
14m
After signing a contract & exclusivity in Oct we entered a period of due diligence. Our accountants have reported. My investors & I have decided not to proceed. I wish the club & loyal fans the very best & hope they get an owner who will invest for long term success #readingfc

This guy really is a fantasist ... no way did he sign 'exclusivity'!

Say he's telling the truth though and the due diligence advised against. That ain't great. All ifs and buts though.

He's a total bullshit merchant.

[Brogue]

Reading Football Club has been referred to an Independent disciplinary commission (IDC) for continued non-payment of monies owed to HMRC.

The Club has defaulted in relation to the amount owed to HMRC for September and October 2023 and as a result is currently under a registration embargo.

In addition to the current embargo, the Club is already subject to a fee restriction for the next three transfer windows after it accumulated 30 days or more of late payments in the current 12-month period (1 July 2023 to 30 June 2024). The current default period as of 31 October 2023 was 79 days.

Where a Club continues to fail to make the payment as in the case of Reading, EFL Regulations agreed by EFL Clubs provide for a Club to be referred to a commission independent of the EFL who shall determine an appropriate further sanction.

EFL Chief Executive, Trevor Birch said: “This is a challenging situation for all involved and we understand the frustrations of supporters and the negative impact sporting sanctions and further charges are having on the football club.

“As a League, we are required to ensure all 72 members are treated fairly and consistently on all matters so that the integrity of the competition is maintained. These consistent failures of the Club’s ownership to meet its ongoing obligations have a knock-on effect on all Clubs and as such, the deterrents in place must be actioned when breached.

“We have today met with the Reading Supporters Trust to discuss the ongoing challenges and will continue to work with the Club in an attempt find a positive solution moving forward.”

Meanwhile, the proceedings against Mr Yongge Dai, the Club’s current owner, continue following the failure to deposit an amount equal to 125% of the Club’s forecast monthly wage bill in a designated account.

The hearing for Mr Yongge Dai is expected to take place by the end of November.

[Hound]

What is the point anymore? We literally may as well stop playing this season

Glad the EFL thibk this will help though

[Sutekh]

What is the point anymore? We literally may as well stop playing this season

Glad the EFL thibk this will help though

Yay, way to go, take even more points off the club that'll teach the owner

[WestYorksRoyal]

It absolutely fcuking bollox. They know we're trying to sell and this will make this process much more difficult. We've already been punished plenty for sustainability issues no other club has ever had a referral for this matter. Their citing of fairness and ensuring we don't get an advantage is laughable - it's not like we're benefitting from any of this.

I've stayed clear of EFL conspiracy theories. They can't use a crystal ball to see how shit Dai will be. Points deductions so far have been consistent with those meted out to others. But this seems like an unnecessary, grossly incompetent decision that pushes us closer to the brink. It's almost like they saw us pay our players and staff yesterday and so found a new way to come after us.

[Elm Park Kid]

From what I can tell from the statement - the EFL have kicked this up to an independent body to rule on what should happen to us based on the existing rules that all of the clubs have agreed to. I'm not quite sure how they could handle this any differently? If they don't follow their own rules then the next club that decides to not pay its taxes can just cite this case as a reason why they shouldn't face any punishment.

On the overall topic of how in theory a club acting like ours should be dealt with - I agree that there is a fundamental unfairness that fans 'suffer' for the behaviour of the owner. But then, there is also a strong case that the EFL needs to be fair to the other 23 clubs in our league. We went out and signed a load of players over the summer, knowing that we couldn't actually afford them. Now, we haven't taken advantage of that, but that's beside the point - we tried to gain an advantage by breaking the rules.

I don't know what a reasonable solution to this looks like - it seems to me that banning us from signing any players until 2025 is already a fair response.

[Hound]

They’ll have passed it over with I guess what they think the punishment should be, like with the previous penalty

[From Despair To Where?]

To be honest, the only further recourse I can see if this situation doesn't resolve itself with new ownership is kicking us out of the league.

[WestYorksRoyal]

To be honest, the only further recourse I can see if this situation doesn't resolve itself with new ownership is kicking us out of the league.

They need to be pragmatic for their own good. An independent regulator is around the corner, and if we get expelled/liquidated it makes a very compelling case for them to be more heavy handed with the governing bodies.

[From Despair To Where?]

At the same time, the EFL has to act in the interests of all 72 members and we, or rather Dai are royally taking the piss. At some point they have to say enough is enough.

[WestYorksRoyal]

Anybody know whether the EFL are an body who fall within scope of freedom of information requests? Could SBWD get hold of their decision making process to approve Dai's takeover?

Even if they can justify it, would be good to put them on the back foot.

[Clyde1998]

Anybody know whether the EFL are an body who fall within scope of freedom of information requests? Could SBWD get hold of their decision making process to approve Dai's takeover?

Even if they can justify it, would be good to put them on the back foot.

They don't fall under the FOI legislation, as they're not a publicly-owned company/organisation.

[Orion1871]

The EFL need to get on with it and expel us from the league once and for all. It's what they want, so they need to stop with the slow death and get it over with quickly.

[Hound]

To be honest, the only further recourse I can see if this situation doesn't resolve itself with new ownership is kicking us out of the league.

Said this a while ago - the constant drip drip of sanctions against someone who doesn’t give a toss are getting nowhere. Threaten to make his asset worthless is the only thing he’ll understand.

[WestYorksRoyal]

To be honest, the only further recourse I can see if this situation doesn't resolve itself with new ownership is kicking us out of the league.

Said this a while ago - the constant drip drip of sanctions against someone who doesn’t give a toss are getting nowhere. Threaten to make his asset worthless is the only thing he’ll understand.

Perhaps it's happening behind the scenes. Their ruling against him in November will be a month to fix things or expulsion. I doubt they'll be that strong though.

[blythspartan]

To be honest, the only further recourse I can see if this situation doesn't resolve itself with new ownership is kicking us out of the league.

Said this a while ago - the constant drip drip of sanctions against someone who doesn’t give a toss are getting nowhere. Threaten to make his asset worthless is the only thing he’ll understand.

Perhaps it's happening behind the scenes. Their ruling against him in November will be a month to fix things or expulsion. I doubt they'll be that strong though.

I wouldn’t be surprised if we get expelled as we don’t have the funds to complete the season. I am hoping that the threat of another points deduction will push Dai into negotiating a quick sell.

Tbh, it’s just wishful thinking and I am now leaning 70/30 towards liquidation. Part of me thinks they should put us to sleep so we can start again.

[WestYorksRoyal]

Said this a while ago - the constant drip drip of sanctions against someone who doesn’t give a toss are getting nowhere. Threaten to make his asset worthless is the only thing he’ll understand.

Perhaps it's happening behind the scenes. Their ruling against him in November will be a month to fix things or expulsion. I doubt they'll be that strong though.

I wouldn’t be surprised if we get expelled as we don’t have the funds to complete the season. I am hoping that the threat of another points deduction will push Dai into negotiating a quick sell.

Tbh, it’s just wishful thinking and I am now leaning 70/30 towards liquidation. Part of me thinks they should put us to sleep so we can start again.

AFC Wimbledon hold the record for the fastest promotion to the EFL. 5 promotions in 9 years. Would be quite a fun journey and we'd bring in the fans to do it quickly. Not sure where we'd play initially though. Even if we could access the SCL, imagine 3,000 fans in the 9th tier there. We'd want a more intimate ground.

The other thing I'd enjoy about expulsion is Dai getting fcuked. Petty and nihilistic but hey.