English club's risky pitch to HK investors

PUBLISHED : Sunday, 23 October, 2011, 12:00am
UPDATED : Sunday, 23 October, 2011, 12:00am
 

It's not the most enticing of invitations: This is an ultra-high-risk investment and if we get it wrong, you could lose all your money.

But that is exactly the pitch would-be bidders for a lower-league English soccer club are making to potential investors from Hong Kong.

Last week, Hong Kong newspapers published advertisements that sought investors for the club, which did not reveal its name. The ad said a bid was being planned for 'a well-known club and potential investors were being interviewed', assuring complete confidentiality.

Using the e-mail address provided, the Post discovered that the club is in the Blue Square Bet Premier league, formerly known as the Football Conference, a tier below English League Two.

A bid representative who gave his name as Stephen James would not give the club's name, saying only that 'in its day, it was much higher up the football league system'.

'We are at a very delicate stage in discussions and have enough money to buy the club. However, moving forward a cash injection from one or two fans would be a great help,' James said. 'We are looking for a minimum of GBP100,000 (HK$1.23 million) from any prospective investor.'

James said he believed the club could be sold in years to come and a substantial profit could be made. Former English League teams such as Luton Town, Wrexham and Cambridge United are now playing in the Blue Square league.

But James warned: 'You should be comfortable that this is an ultra-high-risk investment. And if we get it wrong, you could lose all of your money.'

The representative did not give further information, but said he met prospective investors in Hong Kong last week and then flew to Singapore to meet others.

Crawley Town, who were promoted from the Blue Square league last season and currently top English League Two, had profited from Asian investment - some of it from Hong Kong, British media reports said.

However, former Portsmouth owner Balram Chainrai warned Hong Kong investors to get involved in the business at their own peril. He said being an owner or investor in a British soccer club was like having an expensive toy, with basic day-to-day upkeep likely to drain finances.

As for the ads seeking funding for the unnamed Blue Square club, Chainrai was not impressed.

'Do not release any funds until you have done complete due diligence and understand the full scope of the deal,' he said. 'It may not be a scam, but you have been warned: be ready to lose your money.'

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