Reading bidder breaks his silence

Chinese businessman Dai Yongge bought Reading in May 2017, the same month they narrowly failed to achieve a return to the Premier League via the play-offs. Since then, however, the club have been hit with points deductions for missing payments, sold most of their best players, downgraded their women’s team, lost staff and been relegated to League One. 

Rob Couhig has advised clients in thousands of legal disputes, argued cases in hundreds of courtrooms, bought and sold businesses, run a successful baseball team and taken former non-Leaguers Wycombe Wanderers to the second-tier Championship but he has never experienced anything like his attempt to buy Reading.

After months of difficult negotiations, the 75-year-old American’s takeover of the club in League One, the third division of English football, collapsed at the final hurdle in September, without any explanation from Reading or their Chinese owner Dai Yongge.

Since then, Couhig has not said anything publicly, politely declining requests for comment. Until now, that is.  “I have deliberately not said anything because I would still like to do the deal we agreed,” he told The Athletic.

“To this date, I have not been told why the deal wasn’t done. All the documents had been drafted and circulated by the sellers’ lawyers and they had been signed by every party, including the minority owners in Thailand, apart from Dai Yongge.

“I got up that Monday morning thinking it was finally the day when we would get the keys — I told my wife I would be off to England again. But I then saw an email from our lawyers saying the money we had loaned the club had been returned. No explanation, no thanks.”

The New Orleans-based lawyer suggested he and Reading should put out a joint statement but the club from London’s western commuter belt ignored him and issued their own, not that it told us much.

Over the past nine weeks, rumours have been aired on forums and podcasts that it was Couhig’s fault. The theory goes that he either annoyed Dai by acting like he was already in charge or he tried to knock money off the agreed price at the last minute, like a house-buyer who finds damp in the basement.

Couhig remains reluctant to get into the details, as he wants to honour the non-disclosure agreement he signed with the club and Dai, but he did not push back when The Athletic suggested he had agreed to pay £30million ($38m) for the club, with more than half of that sum being forwarded to Dai upon completion.

However, we have learned he also wanted to withhold some of the total payment as a form of insurance against any financial gremlins that might emerge later on. Couhig did not want to get into specifics but acknowledged “there was a reserve element to the price agreed because of potential undisclosed liabilities”.

Asked for his best guess as to why his deal did not go through, Couhig thinks his plans for the club spooked the current regime. “Some people on the inside (of the club) could see there would be substantial change,” he said. “It’s a great club, with lots of good people, and we like the team and (head coach) Ruben (Selles), but it needs a managerial overhaul.”  Reading declined to comment.

And on the subject of his social media posts at the training ground and in a local bar somehow upsetting Dai, Couhig is very clear.  “It’s nonsense,” he said. “I came to Reading four times and in every instance we were encouraged by the club to give the fans some hope that things were happening with the sale. Frankly, we were told it would be good for me to post some pictures.”

In their statement on September 18, Reading said he and Dai had been “unable to find an agreement” and Couhig’s period of exclusivity had now expired. It added that the club would “pursue alternative options” and it soon emerged that they were in exclusivity with a new bidder, whose identity has been aggressively protected.

Couhig says he does not know who that is and there has been no attempt by the newcomer(s) to make contact with him. This surprises him as nobody has done more work on Reading’s complicated ownership structure than he has and he still holds the liens — a form of security over property assets — he attached to his pre-takeover loans of almost £5million.

Reading chief executive Dayong Pang has written to him about the liens, however, asking Couhig to release them. A request he rejected.

“I haven’t released the liens because the loans I made were integral to the sales process — I would not have loaned Reading if I didn’t think I was buying the club,” he explained.

“I also spent over £1million on this deal. We hired lawyers and accountants to do the due diligence. We even went to the trouble of setting up new companies in the British Virgin Islands to help them out with their (secured debt) problem with (Chinese bank) Haitong.

“Is it fair that I should be out of pocket? I don’t want to sound like I’m whining — what I really want is to do the deal — but I cannot release the liens even if I wanted to, because their lawyers drafted the documents and they are now in dispute with the club over their fees.”

British law firm Walker Morris has filed a winding-up petition against Dai’s holding company for his Reading shares over unpaid fees. It is the fourth such petition the club and Dai have faced since 2020, as well as several points deductions from the EFL for late payments.

And their problems are growing, as Couhig has started legal action of his own.   “I’m absolutely sure they breached my exclusivity by talking to others,” he said. “We have a claim but we’ve turned it over to our solicitors. I’ll leave it at that.  I’m trying not to be controversial here but I’ve been doing deals for 40 years and I’ve never experienced anything like this before.”