Carson Yeung, the former hairdresser who bought control of English soccer club Birmingham City in 2009, was charged with money laundering in a Hong Kong court.
The police brought five charges against Yeung, 51, for dealing with property “known or believed to represent proceeds of an indictable offense,” with a total value of HK$721.3 million ($93 million), according to documents read in court today. He was granted bail, with a hearing scheduled for Aug. 11.
Shares in Birmingham International Holdings Ltd., the West Midlands-based team’s parent company, were suspended from trading in Hong Kong today, according to a statement to the city’s stock exchange. Peter Pannu, Birmingham’s acting chairman, said in a statement yesterday that the investigations didn’t have any connection with that company or any of its subsidiaries.
“This does not appear to be a strong case whatsoever” as prosecutors haven’t said what crime the money is supposed to have come from, Daniel Marash, Yeung’s lawyer, said in court.
Yeung, who was detained yesterday, was released after posting bail of HK$4 million in cash, and HK$3 million in cash guarantees from two supporters. No plea was taken.
The charges against Yeung have the “hallmark of money laundering” according to forensic experts, Hayson Tse, a lawyer representing the prosecution, said in court today. Each charge is punishable by as long as 14 years in jail and a fine of as much as HK$5 million.
HK$400 Million House
Yeung will surrender his travel documents as one of the conditions of his bail. His assets include a HK$400 million house in Hong Kong’s Peak neighborhood, Marash told Acting Principal Magistrate David Dufton today.
Yeung has a six month-old baby girl and 16 year-old son and isn’t a flight risk, his lawyer said. The former hairstylist stood throughout the English-language proceedings with his hands clasped behind his back, and a translator outside the dock.
Hong Kong-listed Birmingham International Holdings is operating normally, and the charges against Yeung are a “personal issue,” Vico Hui, chief executive officer of the company, told reporters in Hong Kong today.
The charges won’t affect the company or the soccer club, said Hui, who posted a third of Yeung’s bail guarantee.
League Cup, Relegation
Yeung at a 2007 press conference said he has investments in energy, hotels and property. An October 2009 statement by Birmingham City Football Club said Yeung has “accumulated many years of experience in international investment,” and was chairman of Hong Kong Rangers Football Club during 2005 to 2006.
Birmingham was relegated from the Premier League last season, three months after winning the League Cup, its first major trophy in 48 years. The club appointed Chris Hughton as its new manager last week after Alex McLeish quit to join city rival Aston Villa.
The businessman needed to be bailed because Birmingham players have to be sold before the start of the new season, and he plays a direct role in those decisions, Marash said.
In addition, a 17 million-pound ($27.4 million) loan to the club by HSBC Holdings Plc is now being questioned due to Yeung’s incarceration, the lawyer told the court.
The team’s finances have been under scrutiny since Birmingham International earlier this year said its liabilities exceeded assets by about HK$348 million. A fully underwritten share sale in March raised HK$87 million.
Bought in 2009
“People are reminded that in recent years members of the previous board were placed on bail for a significant amount of time and nothing came of it,” Pannu said. “I am only using this as an example to calm any fears.”
Birmingham, previously controlled by David and Ralph Gold and David Sullivan, was bought by Yeung in October 2009 in an 81.5 million-pound deal. Sullivan and the club’s former managing director Karren Brady were questioned in April 2008 as part of a fraud enquiry before being cleared of any wrongdoing.
In comments to Sky Sports News today, Pannu said he’d fly to Hong Kong today “and I don’t think I can make any comment until I find out more facts about it.”
“What I have been told by my colleagues in Hong Kong is that charges relate to a period from 2001 to 2007, so that is at least two years before Carson invested in this club, so I don’t see any relationship,” he said. “The fans don’t have anything to worry about, the finances are fine. These things do happen. No charges are proven against him.”
The case is Hong Kong Special Administrative Region and Yeung Ka-sing Carson, ESCC2717/2011 in the Hong Kong Eastern Magistrates’ Court.