'Victim' Lai unable to pump cash into club, says expert.
CONTROLLING shareholder Guochuan Lai will not be in a position to pump his own money into West Brom for the foreseeable future, a football finance expert warned.
Save for the PS6 million purchase of Chinese international Yuning Zhang, who has since been sold, Guangzhoubased Lai has not ploughed any cash into the club since buying an 88 per cent stake from former chairman Jeremy Peace.
And Professor Simon Chadwick, a leading academic on Chinese football and Chinese investment, does not anticipate that changing any time soon.
Prof Chadwick says that even if the Chinese state relaxes controls on capital leaving the country, it will only allow Lai to invest in West Brom if there's something in it for them.
The revelation comes after it emerged that Lai had told chief executive Mark Jenkins he was unable to pay a PS3.7 million debt - that has risen in interest to PS4.1 million - inherited from his PS200 million takeover in 2016.
After encouraging a wave of investment in foreign football clubs, China clamped down on national outflow in 2017.
"These restrictions, even if they were relaxed, it won't necessarily allow Lai to pay back this debt," said Chadwick, who is in Shanghai for a conference on football participation growth in China.
"That's dead money to the Chinese Government. If it agrees for large amounts of money to leave China it's to make a potential return for China.
"The Chinese Government is willing to spend and relax capital controls, but only for domestic infrastructure.
"The state dictates what money will be invested and that it should be done through projects like railway lines, schools, roads and hospitals.
"Maybe he has a more creative way of thinking about it. Perhaps a plan for the redevelopment of The Hawthorns, apartments, retail or a shopping centre.
In many stuck. He's state policy of himself for West Bromwich Professor "That might be a way for him to move money out of the country, but I don't think the Chinese Government will sanction the release of funds for an inherited debt.
"I don't expect the cavalry to arrive for Guochuan Lai or West Brom any time soon. Any fan of the opinion this will change soon is living in a pipedream."
Lai, who only flew over for one match last season, is not reneging on any promises of investment, it must be stressed.
In his welcome notes, the 45-yearold set out "to maintain the current management ethos in terms of day-to-day management" and to "supplement this with the opportunities that China provides."
ways, he's a victim of and a victim investing in Albion.
Simon Chadwick " "I have not indebted the club and intend to keep it on a sustainable footing," added Lai, who made his millions with Chinese construction firm Palm Eco-Town Development.Chadwick, a sports enterprise expert at the University of Salford Business School, insists Lai's outset statement was designed to reassure authorities in his homeland rather than rein in expectation among Albion fans about a major influx of cash.
"For PR purposes that's fine. Lai would have said that to communicate to the Chinese Government he was not going to expose them to any more risk," Chadwick added.
"They won't allow borrowing from Chinese institutions to spend overseas when there's an unproven business case.
"It's not just on football, but across all industry like vehicle manufacturing and pharmaceuticals. "What Lai said was the right thing to please the state. The target audience for that statement was not West Brom fans, it was the Chinese Government."
The penalty for any businessman that contravenes Chinese state policy can extend far beyond financial and commercial punishment.
Irrespective of stringent directives in China, Lai finds himself "caught between a rock and a hard place".
"It's difficult for him to invest in the club and difficult to sell because he's going to find it very hard to negotiate a price and find a buyer," Chadwick said.
"In many ways, he's stuck. He's a victim of state policy and a victim of himself for investing in West Bromwich Albion."
like railway and hospitals. a of country, the management day-to-day to "the "In many ways, he's stuck. He's a victim of state policy and a victim of himself for investing in West Bromwich Albion." Professor Simon Chadwick
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|Publication:||Birmingham Mail (England)|
|Date:||Jun 20, 2019|
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