" Keith Morgan on Vincent Tan's unfulfilled promises "

" Keith Morgan on Vincent Tan's unfulfilled promises "


The unfulfilled promises of Vincent Tan on converting club debt into equity.


The Trust again raised the issue of converting debt into equity in its open letter yesterday to club owner, Vincent Tan. Board member Keith Morgan, who is a football finance expert, looks back on some of the promises made by the owner of Cardiff City and his executives that have yet to be fulfilled.

In a BBC Wales interview July 18, 2013, when Mr Tan was awarded his honorary degree from University of South Wales, he stated clearly that he was “days away” from a settlement with Langston and that if the deal could be done he would “convert ALL my loans to equity”. In the same interview, he said, he was owed £120m at that time so he promised to convert at least such a total (not the later £50m). http://www.bbc.co.uk/news/uk-wales-23362625

That is also a bit of a mystery as in the May 31, 2013, audited accounts it shows Mr Tan as being owed £66m in loans and £6m in shares , so a total of £72m , not the £120m he claims he was owed just 7 weeks later.

On January 12, 2014 Sky Sports News quotes club chairman Mehmet Dalman as saying “I don’t think club supporters should be worried”. “We want to get rid of the debt by converting to equity” and “that means Vincent Tan will own this club 98% and it will have no debt”. http://www1.skysports.com/football/news ... b-accounts

In the meeting with fans’ representativees on March 20, 2014, (reported by WalesOnline) Mr Tan himself said he would be converting once the Malky dispute had been settled http://www.walesonline.co.uk/sport/foot ... bt-6854784

On May 11, 2014, Mr Tan quotes “the club owes me maybe £120m and I put in £140m or £150m. Maybe I will convert £50m and leave £100m debt”. Contradicts previous full conversion promises and also only the May 2014 accounts when released will show what he was owed when he said this. http://www.bbc.co.uk/sport/0/football/27358728

In a WalesOnline article by Steve Tucker dated May 15, 2014 he lists quotes by the club and by Mr Tan himself promising a full debt to equity conversion. Mr Tan had recently moved the goalposts saying that he might now only convert £50m of the £150m that he claimed he was owed. http://www.walesonline.co.uk/sport/foot ... nt-7127908

NOTE: As far back as a meeting of shareholders held in July 2011 there was a resolution passed from Mr Tan and his fellow Malaysian investors to convert £5.1m of loans into shares. It never happened.

In April, 2014, accountant Keith Morgan explained the difference between debt and equity which we reproduce below for the information of fans.




" [i]DEBT OR EQUITY – WHAT DOES IT MATTER TO CARDIFF CITY?[/i] "

Many people have raised the issue of Vincent Tan`s continued delay in carrying out his promise , made publicly on several occasions , to convert all of the loans he has made to the football club into shares and to make the club debt free.

Some fans are of the view that it makes no difference on the basis that “he only owes the money to himself” now that he holds a significant majority of shares in the club`s parent company. However, unfortunately, this is simply not the case.

As long as Vincent Tan continues to be a creditor of the company then it gives him two significant powers.

1) To control the board of directors by appointing the majority of the holding company board – Malaysian employees of his who can simply outvote the UK directors – even though Vincent Tan is not officially a director himself (although under UK insolvency law , should the company enter a formal insolvency, he would be regarded as one because of that control he exerts).

2) More importantly, he can demand his money back at any time as it is not a term loan to be repaid over a period of time, but is repayable on demand like an overdraft. There appears to be a wide disparity between Vincent Tan`s own claims that he is owed £70m to £80m by the club and the claims of the Chairman Mehmet Dalman that Vincent Tan has put in up to £140m.
Whichever figure is correct. the club simply does not have the money to repay it even with a sell-off of a lot of players and Vincent Tan taking all the end of season Sky TV payment plus next season`s first instalment of “parachute” payment. (The football authorities may not allow this to happen anyway if they believe the club may fold financially as a result and hold on to the money until the position is clear).

If Vincent Tan honours his promise to convert all debt into shares, then he is no longer owed any money and can make no demand for repayment from the club. His outlet for recovering his money would then be a sale of his shares to a new investor. Two other routes are NOT available to him in the foreseeable future.

1) A float on a Stock Exchange, either in the UK or Singapore or Malaysia. The club simply does not qualify for such a float due to its record of financial losses and lack of growth potential ( a relegation would half the club`s income while as it would have to finish well up the Premier League on a consistent basis to significantly improve this season` income level). The inability of the club to follow this route was confirmed by the Chairman at a recent meeting with supporters` representatives.

2) Paying himself back with big share dividends each year. This would be a breach of UK law as companies are only able to do so out of cumulative profits – i.e. all of the £millions of losses from past years would have to be cleared first. The recently amended budgeted profit for the current season is about £12m even playing at the top level with all the Sky income that entails, so it would take ages for this to happen.

So Vincent Tan sticking to his promise to convert all his debt into shares does make a difference to the club`s financial stability – a very big difference. I am sure that most fans hope that he will honour that promise as soon as practicable as it was first promised to be done when the Langston debt was settled, which happened several months ago.

Summing up:

1. Tan keeps his loans then he needs to find a buyer to get out.

2. Tan converts loans to shares then he needs to find a buyer to get out.

To sum up, it's his club and he can do what he wants when he wants.

The majority of fans wanted his investment even when warned not to accept it.

To sum up, it's his club and he can do what he wants when he wants.

The majority of fans wanted his investment even when warned not to accept it.

You may well be right but most fans have also realised this & have moved on.
All you seem to do is harp on & on about it. Almost all your posts just go on about our shit fans accepting blah, blah.
Like I say you're right, we should never have gone along with it but all you seem to do is shit stir on here constantly.

To sum up, it's his club and he can do what he wants when he wants.

The majority of fans wanted his investment even when warned not to accept it.

You may well be right but most fans have also realised this & have moved on.
All you seem to do is harp on & on about it. Almost all your posts just go on about our shit fans accepting blah, blah.
Like I say you're right, we should never have gone along with it but all you seem to do is shit stir on here constantly.

Most fans haven't moved on though have they, it's a daily topic on here and in the media. Those same fans now want their ball back. It's not shit stirring just stating the obvious in reply to Keith Morgan first post.

Now as you want your ball back, the first post expresses regards debt to equity and the point being it's Vincent's Club and he can do exactly what he wants. In what other world do customers tell the business owner how to run his company or spend it's money ?

And there lies the answer !!! Can you work it out this time or do you need me to advise you again ? Albeit you didn't listen the last time. You and thousands more. The small percentage in 2012 had the right idea although based more on principal at the time. The rest were prepared to " support " a franchise operation.

Thing is lads we continue to dig ourselves into a deeper hole on this one.

Who in their right mind is going to shell out one penny when the fans/customers, whatever you want to call us, just continue to sing abusive songs and plot against the club and it's owner (which like it or not are one and the same at the moment).

In the last few weeks we've heard about boycotting games, not renewing season tickets, going to games then walking out, sending in drones!, throwing red clothing onto the pitch, throwing blue tennis balls on, dissing Tan on Malaysian media, dissing him to all our sponsors, having a plane tow a banner across the sky, singing anti Slade songs (not because he's crap but because Tan won't like it), someone wished Tan dead this week on the forum and we've even had a suggestion of a full pitch invasion!

Despite all this we're now asking him to keep his promises and write off 120 million.

Be serious lads this isn't going to happen. You and I probably wouldn't buy someone a pint if they'd called us a wanker and worse.

Thing is lads we continue to dig ourselves into a deeper hole on this one.

Who in their right mind is going to shell out one penny when the fans/customers, whatever you want to call us, just continue to sing abusive songs and plot against the club and it's owner (which like it or not are one and the same at the moment).

In the last few weeks we've heard about boycotting games, not renewing season tickets, going to games then walking out, sending in drones!, throwing red clothing onto the pitch, throwing blue tennis balls on, dissing Tan on Malaysian media, dissing him to all our sponsors, having a plane tow a banner across the sky, singing anti Slade songs (not because he's crap but because Tan won't like it), someone wished Tan dead this week on the forum and we've even had a suggestion of a full pitch invasion!

Despite all this we're now asking him to keep his promises and write off 120 million.

Be serious lads this isn't going to happen. You and I probably wouldn't buy someone a pint if they'd called us a wanker and worse.

ALL TALK, Keyboard Warriors.

Yes you are correct though, the answer is actually very simple. Don't renew and don't go. Your owner is clearly trying to make cut backs and less investment entered. Less revenue ............ Means more investment and harder to cut back.

To sum up, it's his club and he can do what he wants when he wants.

The majority of fans wanted his investment even when warned not to accept it.

You may well be right but most fans have also realised this & have moved on.
All you seem to do is harp on & on about it. Almost all your posts just go on about our shit fans accepting blah, blah.
Like I say you're right, we should never have gone along with it but all you seem to do is shit stir on here constantly.

Most fans haven't moved on though have they, it's a daily topic on here and in the media. Those same fans now want their ball back. It's not shit stirring just stating the obvious in reply to Keith Morgan first post.

Now as you want your ball back, the first post expresses regards debt to equity and the point being it's Vincent's Club and he can do exactly what he wants. In what other world do customers tell the business owner how to run his company or spend it's money ?

And there lies the answer !!! Can you work it out this time or do you need me to advise you again ? Albeit you didn't listen the last time. You and thousands more. The small percentage in 2012 had the right idea although based more on principal at the time. The rest were prepared to " support " a franchise operation.

NO.

Most fans have moved on. There are rarely more than a handful of people posting on this board (or should I say BORED), which gives a very disjointed opinion about how many people really give a sh-t. The rest of us don't like it, but stick to moaning about the football, not the colour of the shirt or the owner.

To sum up, it's his club and he can do what he wants when he wants.

The majority of fans wanted his investment even when warned not to accept it.

You may well be right but most fans have also realised this & have moved on.
All you seem to do is harp on & on about it. Almost all your posts just go on about our shit fans accepting blah, blah.
Like I say you're right, we should never have gone along with it but all you seem to do is shit stir on here constantly.

Your right mate, on a different post it's looking back all the time. It's gone, it's done, mistakes are made and you can only look forward. We will get our club back.

To sum up, it's his club and he can do what he wants when he wants.

The majority of fans wanted his investment even when warned not to accept it.

You may well be right but most fans have also realised this & have moved on.
All you seem to do is harp on & on about it. Almost all your posts just go on about our shit fans accepting blah, blah.
Like I say you're right, we should never have gone along with it but all you seem to do is shit stir on here constantly.

Most fans haven't moved on though have they, it's a daily topic on here and in the media. Those same fans now want their ball back. It's not shit stirring just stating the obvious in reply to Keith Morgan first post.

Now as you want your ball back, the first post expresses regards debt to equity and the point being it's Vincent's Club and he can do exactly what he wants. In what other world do customers tell the business owner how to run his company or spend it's money ?

And there lies the answer !!! Can you work it out this time or do you need me to advise you again ? Albeit you didn't listen the last time. You and thousands more. The small percentage in 2012 had the right idea although based more on principal at the time. The rest were prepared to " support " a franchise operation.

NO.

Most fans have moved on. There are rarely more than a handful of people posting on this board (or should I say BORED), which gives a very disjointed opinion about how many people really give a sh-t. The rest of us don't like it, but stick to moaning about the football, not the colour of the shirt or the owner.

I base my outside opinion on the media links and this board. So it's all hunky dory then in reality ? Well if that's the case why everyone bleating on ? Maybe because the club they supported has been raped of its history and tradition ?

But there lies the simple answer, if you support the newly formed franchise keep going. If you don't don't go. It's not hard the rest will take care of itself.

To sum up, it's his club and he can do what he wants when he wants.

The majority of fans wanted his investment even when warned not to accept it.

same old, same old

tell us something new

In a BBC Wales interview July 18, 2013, when Mr Tan was awarded his honorary degree from University of South Wales, he stated clearly that he was “days away” from a settlement with Langston and that if the deal could be done he would “convert ALL my loans to equity”. In the same interview, he said, he was owed £120m at that time so he promised to convert at least such a total (not the later £50m). http://www.bbc.co.uk/news/uk-wales-23362625

That is also a bit of a mystery as in the May 31, 2013, audited accounts it shows Mr Tan as being owed £66m in loans and £6m in shares , so a total of £72m , not the £120m he claims he was owed just 7 weeks later.

This bit does it for me . Bit of a difference between the two numbers . The guy has told nothing but lies .

Does anyone know the debt number as at May 2014 . I assume it won't have got worse since this date . Surely we should be washing our face with the premier league cash and following the big name sales since May 14 .

To sum up, it's his club and he can do what he wants when he wants.

The majority of fans wanted his investment even when warned not to accept it.

same old, same old

tell us something new

Ok - " the bitterest pill is hard to swallow " was one of the Jams biggest hits.

To sum up, it's his club and he can do what he wants when he wants.

The majority of fans wanted his investment even when warned not to accept it.

You may well be right but most fans have also realised this & have moved on.
All you seem to do is harp on & on about it. Almost all your posts just go on about our shit fans accepting blah, blah.
Like I say you're right, we should never have gone along with it but all you seem to do is shit stir on here constantly.

Most fans haven't moved on though have they, it's a daily topic on here and in the media. Those same fans now want their ball back. It's not shit stirring just stating the obvious in reply to Keith Morgan first post.

Now as you want your ball back, the first post expresses regards debt to equity and the point being it's Vincent's Club and he can do exactly what he wants. In what other world do customers tell the business owner how to run his company or spend it's money ?

And there lies the answer !!! Can you work it out this time or do you need me to advise you again ? Albeit you didn't listen the last time. You and thousands more. The small percentage in 2012 had the right idea although based more on principal at the time. The rest were prepared to " support " a franchise operation.

NO.

Most fans have moved on. There are rarely more than a handful of people posting on this board (or should I say BORED), which gives a very disjointed opinion about how many people really give a sh-t. The rest of us don't like it, but stick to moaning about the football, not the colour of the shirt or the owner.

Ha ha! You really believe that?
I think you're a little out of touch with that train of thought!

To sum up I agree with Daya

Thing is lads we continue to dig ourselves into a deeper hole on this one.

Who in their right mind is going to shell out one penny when the fans/customers, whatever you want to call us, just continue to sing abusive songs and plot against the club and it's owner (which like it or not are one and the same at the moment).

In the last few weeks we've heard about boycotting games, not renewing season tickets, going to games then walking out, sending in drones!, throwing red clothing onto the pitch, throwing blue tennis balls on, dissing Tan on Malaysian media, dissing him to all our sponsors, having a plane tow a banner across the sky, singing anti Slade songs (not because he's crap but because Tan won't like it), someone wished Tan dead this week on the forum and we've even had a suggestion of a full pitch invasion!

Despite all this we're now asking him to keep his promises and write off 120 million.

Be serious lads this isn't going to happen. You and I probably wouldn't buy someone a pint if they'd called us a wanker and worse.