Shareholders vow to keep up West Brom pressure after director frustration

Shareholders For Albion (S4A), whose members own 12 per cent of the club not controlled majority shareholder Guochuan Lai, have sought answers from Xu Ke, known as Ken, who is sole director of WBA Group, Albion’s parent company.

The correspondence, seen by the Express & Star, was originally submitted from S4A on March 6 with members looking for answers on the unpaid £5million loan known as ‘Wisdom Smart loan’ – funds taken out of Albion by Lai to aid one of his companies, Wisdom Smart, two years ago.

China-based Lai has since missed two repayment deadlines, most recent of which was December 31, where a statement assured the repayment ‘early in the New Year’.

Ken, mainly based at The Hawthorns, replied on S4A’s given deadline of March 13 but answers have left many shareholders deeply unsatisfied. As detailed in a subsequent reply to Ken over the weekend, members argue Ken’s use of transparency deflection techniques and argued the director’s response “provides little in substance and is short of meaningful detail and reassurance.”

The director stated both an “assurance” and “expectation” the loan, plus interest, will be repaid, to which shareholders requested clarity on discrepancies in the phrasing. Ken insisted he has been in regular contact with Lai ‘since the turn of the year’ and is “taking the steps I consider appropriate to protect the position of Group and to its repayment” – to which S4A asked for further detail.

Angry shareholders want to see evidence of the formal loan agreement, via an exact date, details of the agreement draft and whether club lawyers were involved, as is practice.

“A current irritant is the refusal of Ken, as the only director of WBA Group, to provide any sort of useful information about exactly what Lai really intends to do about the Wisdom Smart Loan,” one shareholder told the Express & Star.

“We want to know the date of the loan agreement and whether it was drafted and approved by WBA’s lawyers. We also want to know exactly what Ken and head of finance (Henry Pu) have done to collect the defaulted loan back. Have they instructed the lawyers involved?”

Other topics raised by shareholders in the letter to Ken included whether there was an intention for annual general meetings to be reinstated at The Hawthorns, a move abolished by former owner Jeremy Peace after they were initially moved to London.

Ken stated he does not intend to reinstate annual general meetings and added “I feel that we have good lines of communication concerning affairs of Club and Group”. That has been strongly refuted by minority shareholders, who did not have the opportunity to read and respond to the special written resolution of the controversial £20m MSD Holdings loan last December before the resolution was passed.

Also raised was the subject of Wisdom Smart and Lai’s exact links to the company which received £4.95 from Albion.

S4A also queried why the loan remains unpaid after a special resolution to Wisdom Smart on capital reduction in May 2022, which allowed the capital in the business to be reduced by roughly £24m due to ‘being in excess of the requirement of the company’. No response was given.