Note that I say “should” not “will” because I have little faith in the system to over-turn the establishment. Nor do I want to get false hopes up. But just for once, EFL, the FA, the footballing world, please, I am implore you to look under the bonnet on this one, for this is a scandal, the likes of which has never been seen before.
I am not a lawyer, nor a barrister. There are many, many reasons however to argue that this is not a normal situation and this needs to addressed properly (and rectified) in a court of law.
- This was not an administration, this was a liquidation
This is in the public sphere and has been stated by Begbies as being the sole intention of our new owners. Had they gone through with this, there would have been no Wigan Athletic to deduct points as they wanted to lock the doors and throw away the key.
The EFL should be grateful to the administrators for saving them the indignity of having yet another member disappear following the disgraceful situation at Bury. The integrity of their competition has had it’s blushes spared here, and what do they do? They punish us for it!
- We did not go into administration in order to seek a financial advantage
The argument for giving football clubs a 12 point deduction is to prevent football clubs and their owners from gaining a financial advantage by racking up big debts, in the form of football creditors and otherwise, then using administration to walk away from their obligations. Transfer everything into a new company, and pay a nominal sum, ten pence in the pound to all existing creditors. Slate wiped clean.
Of course, it can be done in a manipulative way, but this did not happen here. Begbies were not appointed to put us into administration. They were not appointed to find a way to continue to trade as a business / football club and waive existing debts.
They were appointed as insolvency practitioners. They were appointed to liquidate our assets, not transfer them to a new debt free company. Their brief was to sell everything then lock the gates and throw away the key.
How on earth would that have given Wigan Athletic a competitive or financial advantage? It would no longer exist if they had followed the initial instruction!
- No winding up petition was issued by creditors
This is another key one. Usually administration occurs when an owner is struggling to pay their debts and a creditor applies to the court for a winding up petition. In essence, saying to the court: this company cannot or will not pay me, so I would like to apply for them to be placed into insolvency. Those familiar with the Bolton story will recall that HMRC are particularly hot at this.
In this case, there were no dissatisfied creditors, no outstanding payments to anyone, over their standard terms, and it is the owner himself who has put us into administration.
That is fair enough, maybe Au Yeung cannot pay the club’s future creditors. However, just a few weeks ago, he showed the EFL that he had funds to run the club for the next two years and splashed out £40m (apparently) to purchase a football club.
Oh and guess what, of the £30m creditors, guess who the £24m non footballing creditor is? Next Leader Fund, and guess who their majority (only?) shareholder is: Au Yeung. The same individual who bought a football club at a premium price in the middle of a global pandemic off someone who claims not to know him but was actually the majority shareholder himself at Next Leader Fund at the time the sale went through. So a person who bought a company a few weeks ago is demanding repayment of that money from……himself.
Pull. The. Other. One.
- Failure of fit and proper persons test (overall)
This is a much shorter, simpler one. The fit and proper persons’ test is not fit for purpose. Football knows it, the government knows it, the EFL knows it and yes Rick Parry knows it and has said as much in his numerous interviews.
Why wait until one more club falls foul of unscrupulous owners before changing it? One is one too many. It has killed Bury, it nearly killed Bolton and it may well kill Wigan Athletic. This needs challenging in court NOW.
The EFL need to stop kicking the difficult decisions into the long grass (see also Sheffield Wednesday, Derby County et al)
- The majority shareholder was not sufficiently vetted
How is it that our (hopefully) impending new owner has to wait 3 weeks yet Au Yeung wasn’t even a majority shareholder for three weeks before he decided he wanted to liquidate the club?
How does the EFL vindicate against sleight of hand movements that allows a “company” without scrutiny to transfer shares to someone fit and proper to someone not fit and proper in a matter of days and the EFL fails to regulate that individual because they were only a minority shareholder at the time.
Note, this is a company in the loosest sense, the clue is in the name: Next Leader Fund, is actually that. A fund, a pot of money, or not in this case!
A simple Google of Au Yeung Wai Kay by the EFL would have raised alarm bells. How is it that a man with no footprint at all, with no public background in either football or company directorship and the only public record being a 15 year old bankruptcy charge, can walk into a football club with a photo shopped bank statement and fool the authorities?
I have no idea what current process looks like but even ten minutes of due diligence, and not the hours of research many Latics fans have put in, would confirm that Au Yeung is a ghost, a fall guy, probably with some casino debts, put in place by Stanley Choi to dump a football club he had lost interest in, at minimal damage to his other businesses?
- Force majeure #1 timing
It is an indisputable fact that the 2019/20 Championship league season would have finished on May 2nd 2020 had it not been for COVID19.
It is an indisputable fact that Wigan Athletic were placed into administration on July 1st 2020.
Therefore, had it not been for the global pandemic, it would have been impossible to deduct points from Wigan Athletic’s 2019/20 season. Therefore, force majeure should apply to this case with regard to the 2019/20 season.
Of course, it may be that without coronavirus, the club may have still been put into administration in July 2020 but, again, had it not been for coronavirus, any points deduction would have been applied in the 2020/21 season.
7. Force majeure #2 financial impact
Our majority shareholder, Au Yeung, has publicly stated that the club was put into administration due to the impact of COVID-19. So, this has come straight from the horse’s mouth, and this particular horse doesn’t speak very often. Therefore, global pandemic = force majeure.
The EFL came out with a long, convoluted statement, essentially stating that they don’t believe him. That Au Yeung is a liar.
Yet, a few weeks earlier, they legally agreed he was a fit and proper person capable of owning, running and financing a Championship club.
The EFL have contradicted themselves here. Is he a liar or is he the fine upstanding citizen that they waved through just a few weeks earlier and strolled through their due diligence process?
Let’s assume he is a fit and proper person. The football club has had no income for four months due to the global pandemic, and very limited means of raising it due to a global pandemic. These are FACTS, and were brought on by a global pandemic.
If the EFL can prove that Au Yeung is lying about the COVID19 impact, then maybe the points should be deducted. However, they can’t prove it. They have simply put out a contradictory statement containing their opinion, in relation to his original statement.
8. Force majeure #3 the timing of transfer of ownership
So the counter argument states that Au Yeung / Next Leader Fund bought the football club during a global pandemic, therefore force majeure as a result of coronavirus is not a legitimate defence.
However, the OWNER and MAJORITY SHAREHOLDER of Next Leader Fund, at the time Next Leader Fund, was not Au Yeung, it was Stanley Choi. Stanley Choi was also the majority shareholder in IEC, who bought the club BEFORE the global pandemic began.
It does not take a genius to take the slightest peek behind the corporate veil here to see that Next Leader Fund was solely set up with the purpose of shutting down Wigan Athletic, and that this action was taken by the man, who was the man who was both the majority shareholder in IEC and NLF.
And he carried out these actions DURING a global pandemic to rid himself of a football club he owned before a global pandemic. Argument dismissed.
The EFL are either extremely naïve or are deliberately allowing themselves to fall for the deception that IEC and NLF are not one and the same, with the same majority shareholder at the time, in order to avoid having to admit that they have made a gross error of judgement in their fit and proper test.
9. Destroying a football club with malicious intent
I very much doubt this scenario is mentioned in the EFL Ownership regulations but I firmly believe that is exactly what has happened here and there should be a criminal investigation as to the motives behind this move, before a football club gets punished.
By simply applying a ‘computer says no’ standard procedure to this, as well as their failure to address their own fit and proper persons test, the EFL are complicit in this and are not doing their job.
IEC share price tripled on the Hong Kong Stock Exchange, upon sale of Wigan Athletic to Next Leader Fund. A clear nod to insider dealing. The EFL, like the rest of us have no access to the hidden Caymen Islands based paper trail and construct of shell companies designed to mask this destruction.
And of course rather than do something about it NOW, whilst a football club dies before their eyes, they yet again kick it into the long grass with mealy talk of future investigation.
The EFL are not prepared to do the work to fix their own mistake and have taken the easy, black and white option of punishing the football club, because it is the rules.
10. The Blackpool precedent
In Feb 2019, Blackpool FC were placed into insolvency and did NOT receive a twelve point deduction.
Why not? Because the receivers had been appointed for NON FOOTBALLING reasons to recover NON FOOTBALLING DEBTS and the club’s financial performance had raised no red flags at all prior to the administration.
Wigan Athletic have £30m of external creditors. £6m of football creditors that were not overdue at point of administration and a £24m loan, repayable to Au Yeung.
The majority shareholder has essentially put us into liquidation to recover his own debt, a loan he used to buy the company just a few weeks prior.
What has this got to with football? Absolutely nothing.
The administrators have publicly stated that this is (was) a well run football club with no issues with regard to financial performance.
If anything, this situation is even more valid than the Blackpool case.
Whereas Valeri Balokon called in the receivers to recover £25m from Owen Oyston. Au Yeung Wai Kay and his company, Next Leader Fund, of which he is the majority shareholder, have called in the receivers to recover their OWN DEBT.
They are trying to get money back from THEMSELVES!
Whether this makes sense or is logical matters not, what does matter is that, like Blackpool, this is an extraordinary situation and not a “normal administration”.
- The betting scandal.
I personally think this may not have been a real motive and possibly the weakest reason here, even though Stanley Choi has been linked to multiple fraudulent businesses, money laundering practices and the Philippines gaming commission. But let’s say it was, and indeed there is enough significant evidence and linkages to suggest it could be.
Surely the EFL has a moral requirement to intervene and investigate this properly, seeing as the EFL is almost wholly reliant on the gambling industry to keep the SKYBET (the clue is in the name) Championship and other leagues going.
Or maybe they are being deliberately passive because of their reliance on the betting industry and challenging that industry could make for uncomfortable conversations and sponsorship withdrawals.
As we saw in Italy a few years back in Serie A and other leagues, illegal gambling and match fixing has the potential to completely blow apart the game.
The EFL knows this, which is why they are reticent to act upon it. They are, as mentioned, taking the easy, comfortable option rather than investigating this right now whilst a football club is being ripped apart and jobs are being lost.
- This is not a ‘normal’ administration
Finally, there is no additional argument to be made here as such.
The point of point twelve (see what I did there) is to state that there is a myriad of arguments, theories and indeed facts laid out above.
Some might not be valid, but we only need for one of them to be.
Furthermore, on their own they might not be enough, but combined together there is more than enough to provide a compelling case to reduce, remove and cancel this points deduction.
A points deduction which has only served to further ravage a decent football club that had already been put on it’s knees by unscrupulous fraudsters, who should not have been anywhere near any football club, and would not have been had the EFL had a shred of actual diligence about it’s due diligence processes.
They are to blame and they are passing the blame on to the football club, whilst the actual perpetrators of the crime have walked off scot free.
IN SUMMARY
To those fans of (certain) other clubs, who keep parroting the old “well you went into administration, it’s a 12 point penalty, that’s what you deserve” line.
Well I am sorry this is not a normal case. Most right thinking football fans, experts, journalists and politicians recognise that this is a situation unlike any other.
Even Rick Parry has conceded this. And even he, the chairman of the EFL has admitted that the rules and processes need to change, because they are no longer fit for purpose.
The events of recent weeks should (and will be) be the catalyst and reform across football
It would be even more just if Wigan Athletic could be the catalyst to change this rule right now, seeing as we are the ones who are both suffering and bringing this to light by challenging it.
This is a chance of justice to be served. Rules are rules but law is defined by precedent. The legal system evolves over time as new precedents are ruled upon.
I got mocked by Bolton fans by using Apartheid and racism and putting witches in ducking stools as a comparison. I wasn’t comparing a football club suffering to Rosa Parks being forced to sit elsewhere on a bus because of the colour of her skin.
I was pointing out that just because the legal system says it should be so, it doesn’t mean it is right. And that the rules and legal systems have changed hundreds and thousands of times for the better over time.
The rules regarding football club ownership ARE about to change. We just have to hope it is not too late for us.
We are 100% in the right on principle. It is now up to the courts to do the right thing and remove that 12 point deduction from a football club that has suffered enough in the past few weeks
Come on, the QC! The town and (most of) the football world is behind you
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- Tags: administration, EFL, latics, WAFC, wigan, Wigan Athlletic
