Reading's plight

Two other clubs have gone bust in recent years under the stewardship of Reading owner Dai Yongge and his associates. KSV Roeselare, members of the Belgian top flight as recently as 2010, and Beijing Renhe, a Chinese Super League club who competed in the Asian Champions League, both fell into financial trouble on his watch. Both no longer exist. 

Dai’s takeover, which arrived during a fleeting drive by China to invest in European football, came a fortnight before Reading lost on penalties against Huddersfield Town in the 2017 Championship play-off final.

Since then, the Chinese businessman, whose family fortune was amassed through the construction of shopping centres, has run up a wage bill of historic proportions. In April, after failing to comply with a business plan imposed for breaching EFL spending rules, a six-point deduction ultimately doomed Reading to relegation to the third tier.

In total, Reading have been docked 16 points under the elusive Dai — hence the 16th-minute pitch invasion last week — as players and staff have been paid late on numerous occasions and winding-up petitions continued to be served by HMRC. Accumulated losses of almost £200 million would have been even greater without the sale of the club’s stadium to a Dai-owned company for £40 million in 2019, in an attempt to circumnavigate profit and sustainability rules.

Understandably, morale inside Reading’s £50 million Bearwood training ground — the construction of which is arguably Dai’s one positive contribution in 6½ years as owner — has bottomed out. Some staff were forced to wear coats at their desks during a recent cold snap.

Kitchen staff supplied by the catering firm, Levy, which has provided food at Reading’s training ground and stadium for more than a decade, recently left Bearwood, which meant players relied on microwave meals to refuel after training. Select Car Leasing, who sponsor the club’s shirt and stadium, have twice stepped in with loans to cover the payroll.

Sources say that Dai has failed to return to the table for talks with as many as three bidders.

The EFL, who have also urged Dai to sell the club, is largely helpless. Dai has failed to deposit 125 per cent of the club’s monthly wage bill in an escrow account, as requested by the EFL, on three occasions; he has been fined, but has not paid, a total of £80,000.

In December, the EFL even tried to have Dai disqualified, but an independent panel, which instead imposed an additional £20,000 fine, essentially decided that disqualification would do little to remedy the club’s plight. They have a point. Under EFL regulations, disqualification would give Dai 28 days to divest himself of the club. But in reality, corporate law dictates that the EFL is powerless to force the Chinese businessman out.