Without any fanfare or even explanation by the club or Birmingham International Holdings Limited (BIHL), two notices were slipped out yesterday which make a significant difference to the ownership of our club.

A disclosure was made to the Hong Kong Stock Exchange (HKSE) that Yang Yue Zhou has sold more than 4.8 billion shares, reducing his current shareholding in BIHL from  about 16% to less than 1%. The deal was done “off-exchange” and for “cash” on 27^th November 2014 according to the notice. So ownership of a sixth of our club has changed with only a very quiet a whisper! What’s more, included in the sale are rights to conversion shares that could have made Yang Yue Zhou a 30% shareholder in BIHL. So, on this basis almost a third of our club has changed hands overnight, without any explanation! There is no indication or other notice on the HKSE web-site saying to whom these shares have been sold.

Quite separately from the HKSE announcement, the club web-site discretely changed the information it provides under Football League Regulation 94. This identifies persons holding a significant interest (i.e. >10%) in the club. Previously the notice said that Carson Yeung (with about 28% of both BIHL and the club) and Yang Yue Zhou (with about 16% in both) were persons with significant interest. The club notice now says that as of 8^th December Carson is still there with 28% but a person called Wang Li now has 16%. There is no mention that Yang Yue Zhou no longer has a significant interest – perhaps we are meant to remember that he was named in the previous notice?

So, putting two and two together (because nobody at BCFC or BIHL seems to want to do this for us) we conclude that Yang Yue Zhou has sold at least a good proportion of his shares to Wang Li. But the club notice is all about shares in issue rather than outstanding conversion shares – so we don’t know for sure whether Wang Li now holds the 4 billion conversion shares also sold by Yang Yue Zhou, but if he or she does he or she could become a 30% shareholder over time. We won’t know this until Wang Li makes a disclosure to the HKSE.

Daniel Ivery, on the Often Partisan web-site, has suggested that Wang Li may in fact be Carson Yeung’s common law partner – which would make things very interesting!

Irrespective of who the new owner is, the episode demonstrates how in our situation, with a holding company listed on a stock exchange, large ownership changes can occur very quickly and with very little publicity. And large changes in shareholdings are not a new phenomenon. Carson himself sold down from about 19% in February 2014 to about 1% in August. Then in November he converted shares from his Debt Convertible Bond to take his shareholding back up to 28%. Reporting of these events on both the club web-site and the HKSE was not at all timely.

The Trust thinks it is important that there is transparency and visibility on club ownership. The Football League apparently does too, requiring publication of >10% ownership under regulation 94, but does not appear to monitor individual clubs closely in this respect. Whilst we cannot directly change the HKSE rules that regulate how ownership of a listed company can change hands, we can seek to ensure that the transparency requirements of the regulatory authorities are both appropriate and adhered to. In our view this would involve timely, well publicised  and more detailed reporting of events such as those in relation to BCFC ownership that were revealed in a rather underhand way yesterday. This is one avenue the Trust will be pursuing as part of its plans for the future.

The Trust intends to contact the relevant regulatory authorities drawing attention to where there may have been breaches of their disclosure requirements in the past, and to ensure information is provided in a transparent and timely manner in future.

Mark Sutton

Blues Trust