The Hong Kong owner of English football club Wigan enquired about placing the team into administration the day before he informed the English Football League he had acquired a majority stake an independent panel said in a report.
Au Yeung Wai Kay bought Stanley Choi’s 51% stake in Next Leader Fund the owners of 2013 FA Cup winners for £20 million ($26 million) in June but on July 1 they were placed in administration.
A subsequent 12 point penalty imposed by the EFL saw them relegated to the third tier.
The club’s appeal against the penalty reasoning it was a force majeure — events out of their control — was rejected by the panel although they did express sympathy.
Wigan have been “let down by those who appear to have seen it as an opportunity for investment and profit”, the commission said.
The panel also made clear Kay was solely responsible in bringing the club down and had kept the parlous financial situation to himself.
They said his purchase of the stake off Choi made him “in effect, if not law, the sole owner of the club.”
“Far from acting with due diligence to avoid the happening of that event, at least one of the officials of the club — that is, Mr Kay — actively brought it (going into administration) about,” the panel said in their report.
The panel expressed their amazement at Kay approaching insolvency practitioners Begbies Traynor on June 23, the eve of his informing the EFL he had acquired the majority stake.
“It may seem extraordinary that, notwithstanding the deal which was to be completed the following day which resulted in him becoming, in effect, the sole owner of the club, Mr Kay had already contacted Begbies Traynor regarding putting the club in administration.”
The panel concluded the insolvency “cannot be regarded as a ‘force majeure’ event” as it is considered “a normal business risk that an owner will lose interest or run out of money and/or choose to deploy resources elsewhere”.
Even when Kay had bought Choi’s stake he refused to make available the £6 million expected by Wigan “because his other business took priority”, effectively sending the club into administration.
A suggestion Wigan were put into administration because of a bet was considered “not impossible” but “wholly unsubstantiated” by the panel.
Begbies Traynor, the club’s administrator, is still attempting to find a buyer and has warned unless an agreement is reached by August 31, it will have to consider whether the club can be funded into the 2020-21 season.