West Brom £5million Guochuan Lai Wisdom Smart loan guaranteed by WBA Holdings
The £5million loan owed to Albion by Guochuan Lai's Wisdom Smart Corporation is now guaranteed from another of the controlling shareholder's companies.
A guarantee has been put in place with West Bromwich Albion Holdings Limited, the holder of almost 87.8 per cent of WBA Group share capital, stating that should Wisdom Smart continue to be unable to repay the loan, then Holdings will cover the £5m sum as guarantor.
WBA Holdings is owned by Yunyi Guokai, whose controlling shareholder is also Guochuan Lai.
Yunyi Guokai Sports Development, a Chinese investment company, was founded by Lai, who took over Albion from Jeremy Peace in 2016.
A statement from Albion read "An outstanding loan of £4,950.000 owed during the accounting period by Wisdom Smart Corporation Limited has been impaired at Group level by auditors, and West Bromwich Albion Holdings Limited – a wholly owned subsidiary of Yunyi Guokai (Shanghai) Sports Development Limited – has since committed to guarantee the loan and accrued interest."
The statement added a 'repeated assurance' received by the club from Lai 'that the loan and accrued interest will be repaid.'
The controversial £5m loan has been subject of much debate since its revelation in delayed club accounts dated to June 2021 revealed last summer.
Lai took £4.95m from the club in March 2021 to aid another of his businesses, Wisdom Smart, in the aftermath of the pandemic. The controlling shareholder, who had already missed one late 2021 repayment deadline, vowed last summer the fee will be repaid by December 31 in time for this January's transfer window.
But that deadline was also missed, as has a vague 'early in the New Year' repayment date.
Albion's accounts for the season 2021/22, to June 2022, have been published in full.
Figures confirmed by the club show a pre-tax profit increase of more than £5m up to £5.4m from the £0.1m posted in June 2021, when the club's coffers were feeling the effects of Covid-19 and almost a whole season of empty stadiums. A first season of parachute payments, following top-flight relegation, assisted with the profit increase.
Turnover, though, decreased markedly following relegation from the Premier League and a first campaign back in the Championship.
It was down from £106.9m to £65.4m due to a drop in Premier League distributions and sponsorship following relegation.
Fees paid for the purchase of player registrations in the 11 month period to June 2022 totalled £12.6m, down from £30.5m the previous June, while sales returned £17.8m, up from £9.7m. Staff costs decreased from £76.9m to £42.4m.
