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.
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.
