With talk of Liverpool being the subject of interest from a Chinese group, Jim Boardman takes a look at the ownership situation and whether FSG may be looking to sell sooner or later.
Another day, another takeover rumour for Liverpool. This time the claims are that an organisation from China wants to buy Liverpool, for £700m, with their plans apparently also including a new stadium alongside the Mersey as well as the redevelopment of Melwood. It all sounds very exciting but is any of it even true? And do we even want it?
Liverpool fans are used to rumours of this nature and the gaps between them are never very long. If there’s a country or region with big investment funds burning holes in their pockets it will be linked with a Liverpool takeover before long. This week it’s China, next week it might be India, the week after the Middle East. So far so good on the complete lack of links with Donald Trump.
Much as it is with transfer gossip, the rumours will be a mixture of stories based loosely on genuine fact and complete works of fiction.
If a Liverpool scout is spotted at a certain game it triggers stories that the Reds are about to bid for one of the players involved that day, even if the Liverpool scout was looking at a completely different player and realised 20 minutes in it was best to steer well clear. There was an element of truth to the story – a Liverpool scout was at that game – but the bits about an imminent bid for a specific player were added in by a budding JK Rowling.
People make transfer gossip up for all kinds of reasons, whether it’s a fan having some fun on the internet or somebody genuinely involved and trying to engineer a deal that suits them or whoever they work for. Player wants new contract, player isn’t getting new contract, agent leaks interest from big club, player gets new contract. Club want player, player not for sale, club leak interest, player asks for move, club gets player.
There is no doubt whatsoever that Liverpool’s owners Fenway Sports Group want to sell the club – or at least part of it – at some stage, whether that’s in the extremely distant future or sometime next month. They knew when they spent what they did on LFC that they were getting a bargain in a distressed sale. RBS wanted their money back, FSG gave it to them, now LFC is worth at least three times what they paid for it.
There is also no doubt that the purchase of Liverpool Football Club, at the right price, would be seen as a very attractive deal by certain wealthy investors. TV money is continuously on the rise, LFC like the rest of the Premier League are continually tapping into new markets.
Liverpool have also added a couple more thousand hospitality seats and with the right people doing the deals could just about have their pick of big money sponsors and partners to swell the coffers further.
All the ingredients are there for a Liverpool takeover to happen at some point in time but it’s impossible to predict when that might be or what kind of money will need to change hands. Have your own guess.
In the meantime we’ll get gossip of varying levels of credibility, some of it made up by a kid in his bedroom, some of it fuelled by people who stand to get a cut of the action in some way.
Back in 2010, Liverpool were in financial turmoil and under the threat of going under completely but there was a big story doing the rounds about a rescue bid from China. It would have not only got rid of all the debt but would have finally seen a new stadium built and serious money pumped into upgrading the squad. In those dark days it was seen by many as a true beacon of hope for the future.
With the benefit of hindsight many supporters are now totally dismissive of the whole China 2010 charade. Kenny Huang was exposed for not quite being the powerful businessman his supporters claimed him to be and disappeared into the sunset. He reappeared two years later in Milan, working on a deal for a Chinese takeover of Internazionale, with the Italian club announcing he would be joining their board as part of the deal. China Railway 15th Bureau Group Co Ltd were one of the investors named in that announcement.
A year later that deal had apparently collapsed and an Indonesian consortium, International Sports Capital, took a 70% stake. Erick Thohir, part-owner of DC United, was part of the consortium and became club president.
Earlier this month Inter changed hands again when Chinese retail giant Suning Holdings took a majority stake. They bought former president Massimo Moratti’s remaining 30% stake and a chunk of the shares held by International Sports Capital, leaving Thohir’s company with 30%. Thohir remains club president.
So, four years after first being associated with Kenny Huang, Inter are now finally owned by China. Well, a Chinese corporation. Is that going to happen to Liverpool too, or are the latest rumours nothing more than the work of someone’s overactive imagination?
The China 2016 rumour comes with a bit of “proof”, a letter doing the rounds of social media purporting to be from SinoFortone. It’s “signed” by Dr Peter Zheng, although SinoFortone’s man is actually called Dr Peter Zhang. Typo? Surely you’d notice your own name was wrong on a letter of introduction for a deal worth three-quarters of a billion pounds?
The Liverpool Echo pointed this typo out, along with other issues relating to the letter and the claims it contains. The Echo also report that “senior FSG officials say no such letter was received and are adamant that they haven’t had any discussions with SinoFortone about either part-investment or a potential takeover.”
Then again, they would say that wouldn’t they?
The Echo report also said that the sinofortune.com website at the foot of the letter doesn’t exist, in fact it does exist but seems to be hosted on a server struggling under the weight of the interest from LFC’s worldwide fanbase.
Contrary to what the Echo report says, SinoFortone's website does exist, it's just down due to traffic. pic.twitter.com/C2O5ldoFlr
— This Is Anfield (@thisisanfield) June 15, 2016
The letter claims Anfield will still be redeveloped despite a new stadium being built, a bit of a strange idea to say the least, but perhaps the biggest pointer to the 2016 letter being a fake is the signature itself. Not only does it appear above an incorrect spelling of his name, it also looks totally different to Zhang’s signature on an official document signed with the Scottish Government.
Children's book recommendation: "Peter Zhang and the mysterious case of having two markedly different signatures." pic.twitter.com/bTpMrCjLzb
— Dave Phillips (@lovefutebol) June 16, 2016
Compare the two and try not to laugh. A few teachers might see similar efforts today from pupils trying to get out of school early for the England-Wales match.
The date on the letter coincides with a trip Liverpool director Billy Hogan made to China in February to, according to reports, enter into discussions about the potential sale of naming rights. Whoever created the letter, assuming it is as fake as it looks, no doubt thought that would be a good date to use for their ruse, but if anything it just adds to the rapidly growing list of reasons to laugh at the letter.
Even if the letter is fake it could be argued that doesn’t disprove completely the possibility that there is interest from SinoFortone. They have signed big deals elsewhere and past approaches for the purchase of Liverpool by other interested parties have often been somewhat cloak and dagger.
The China 2010 saga involved various people, most of them never named publicly, who were all making efforts in different ways to try and get a deal done. Whether they were all duped or not is another question for another day, but a lot of people believed the money was there and that a deal could be done.
The story that seemed to come out in the end was they felt there were no other serious bidders and that they could get the club for a knockdown price in the region of £100m once it went into administration. They were just playing a waiting game, sitting on the sidelines as Liverpool’s days got ever darker. It turned out they were wrong, two bids did come in – one from FSG – and by the time they realised this it was already too late.
Whatever their intentions were, their efforts collapsed without them actually making a formal bid. They played a game and lost.
Are similar people working behind the scenes on a China 2016 bid? Kenny Huang himself barely spoke about the deal back then, other people did it for him, and looking back now it’s laughable how certain people acted.
Certain fans, convinced it was a genuine deal and having been promised great personal rewards if it all went through, went to great lengths to sell the idea to other Liverpool fans, convincing them to sell the idea onto other supporters and making all manner of claims about how wonderful it was all going to be. To be fair they weren’t the only ones to believe the claims, as could be seen by how it was reported in the national press at times.
Six years on and it could well be that similar people have resurfaced having been made similar promises, or having been convinced in a similar way that great things lie ahead for Liverpool should it get sold to China. Maybe they put the letter together.
If there is any truth in the story it will be found further back in the shadows than that letter or any claims being made publicly by people who claim to be in the know. The environment is completely different now and a hostile attempt to wrestle control from the club’s current owners would surely be resisted by most fans, even fans who feel FSG are still struggling to meet expectations. If Liverpool fans are being hired to sell an idea now they will have a much tougher job doing it.
Do we even want our club owned by the people in this latest story?
The document mentioned earlier, signed by the real Dr Zhang, a Memorandum of Understanding between the Scottish Government and two Chinese companies – SinoFortone and wholly-owned China Railway Group subsidiary China Railway No 3 Engineering Group (CR3) – has rung alarm bells with Amnesty International.
Amnesty cite a report that says the Norwegian oil fund’s ethics council withdrew a £26m stake in CRG after uncovering “an unacceptable risk that the company is involved in gross corruption” in 2014. The report contained claims that huge bribes had been paid to help secure housing and rail contracts and says CRG were implicated in one of China’s largest ever corruption cases, which came to light after a high-speed rail crash had left 40 people dead.
Amnesty carried out an investigation of its own in 2013 and its report implicates CRG and its subsidiaries in illegal forced evictions in the Democratic Republic of Congo, saying communities were forced out of their homes into Chinese trucks before being dumped in appalling conditions, all to make way for a mineral processing plant linked to the mining industry.
Amnesty’s Naomi McAuliffe talks about “the fact that grave reservations about potential investment opportunities for SinoFortone and CR3 have been publicly raised” and says it is “crucial” that due diligence is conducted “on any prospective partners with regard to human rights, bribery and corruption.”
One day one of these rumours about Liverpool being taken over will turn out to be true, the letters won’t be fake and the people trying to sell us the idea will be moving closer to getting their rewards for it.
No matter how exciting they make it sound to us, whether it’s through big transfer kitties or fancy new stadiums, we need to make sure we are happy with the hands we are potentially being sold into. Can we trust the people being paid to seduce us into thinking it will make us great again?
This week’s rumour has given us all something to have a laugh about, but it should also remind us to, as Ian Ayre might put it, be careful what we wish for.