Premier League told EFL about Yongge

The Reading owner Dai Yongge was told at the time of his takeover that he would not be allowed to own the club in the Premier League, it can be revealed, although apparently Reading fans have known this for years.

Questions have emerged over how Yongge was allowed to buy the club for £24.5million in 2017 after he was blocked from buying Hull City, who were then in the Premier League. The Chinese businessman was disqualified by the EFL in February and has been given until May 5 to sell League One side Reading, who are in serious financial difficulty.

A consortium led by Yongge first tried to buy Hull, but was rejected by the Premier League and he formed a different group, which was allowed by the EFL to take over Reading in May 2017, when they were in the Championship.

It is understood that the Premier League advised the EFL against the move on the basis that Yongge had not shown good faith in his application to buy Hull. But the EFL’s legal advice was that it would not disqualify him from buying Reading under its rules at the time, and that he had proof of source and sufficiency of funding.

Yongge and his sister, Dai Xi Liu, took over the club on the eve of Reading’s Championship play-off final against Huddersfield Town in 2017, which they lost on penalties and helps explain the Premier League’s warning regarding his ownership.

The Premier League has input into takeovers of clubs in the EFL who could go on to compete in the top flight and it is understood to have made clear to Yongge that should Reading win promotion then he would need to divest himself of any controlling interest.

Reading could be suspended by the EFL if a sale is not agreed soon — the club are in with a chance of making the League One play-offs. They are said to be in advanced talks with the former Wycombe Wanderers owner Rob Couhig, an American who last year loaned £5million to Yongge’s holding company.

In a statement last week, the EFL insisted Yongge had not been disqualified by any sports body at the time it approved the Reading takeover, and that the Premier League decision on Hull was due to another individual.