Birmingham City’s parent company declared to the Hong Kong stock exchange that it was in takeover talks with “two prospective buyers”.

By Matt Scott

The Cayman Islands-registered Birmingham International Holdings, whose shares traded on the HKSE before being frozen on June 30, is the group company that controls the club. It has announced receipt of the offers barely a month before one of its most significant share­holders, the club’s president, Carson Yeung, stands trial over allegations of money-laundering involving more than £58million. Yeung denies the charges but conviction would put him in breach of the Football League owners and directors test. “The board has been approached by two prospective buyers to explore the possibility of purchasing Birmingham City Football Club,” BIH said in a statement. “Discussions are at its [sic] early stages, the parties having signed confidential non-­disclosure agreements.”

There is no indication of who are behind the bids. The club are bound by stock market rules governing takeovers not to comment on the situation. The BIH statement did add, however: “To the best of the Board’s knowledge, information and belief, the prospective buyers and their ultimate beneficial owners are third parties independent of the Company and its connected persons.”

The bids come at a difficult time for Birmingham, with the club fourth from bottom in the Championship. It is likely any bid would be significantly less than the £48million at which BIH was trading when its shares were frozen.

The club’s long-delayed 2010/11 accounts were finally signed off in May this year with a warning about theor cash-flow solvency. The club had no access to an overdraft last season. Independent auditors refused to declare the club a going ­concern owing to “insufficient appropriate audit evidence”.

It would appear that Yeung, a 25.39 per cent shareholder in the club, could not have helped to underwrite their finances. His assets have been frozen in Hong Kong because of the court case. Moreover, according to the South China Morning Post, he faces a separate civil case this month over a mortgage he allegedly took out over a property the claimants say was not his alone.

The Daily Telegraph can reveal that Yeung’s past actions have led to regulatory sanctions being imposed on BIH’s directors, who have included Steve McManaman and Christian Karembeu. The former players resigned from the board in June 2 of this year and December 2010 respectively.

The HKSE looked into a number of share dealings worth a total of £363,000 that Yeung undertook with BIH – then trading as Grandtop International – in June 2009. At the time its board discussed a plan to turn its 29.9 per cent shareholding in Birmingham into a full takeover. However, regulators found directors had “breached exchange listing rules”. Now, if any of Karembeu, McManaman or BIH’s other directors at the time want to serve on the board of a firm listed on the HKSE they must undertake “24 hours of training covering eight core topics” as part of the sanctions.

McManaman said on Tuesday (9) night that he did not know anything about it.

For more on this story go to:

http://www.telegraph.co.uk/sport/football/teams/birmingham-city/9596379/Birmingham-City-owners-confirm-talks-to-sell-club-with-two-possible-buyers-in-the-frame.html