Post by Webster on Jun 7, 2018 3:33:34 GMT
The Guardian: Aston Villa face bleak future as Tony Xia shortfall exposes house of cards
-Read more: www.theguardian.com/football/2018/jun/06/aston-villa-tony-xia-bleak-future
Alarm bells were ringing at Aston Villa long before a tax bill went unpaid last month. The first indication that all was not well came last year, when Tony Xia’s monthly payments stopped arriving with the same frequency, leaving a club that were operating way beyond their means, and are totally dependent on the owner’s financial support, scrambling around to pay the bills.
Xia, the Chinese businessman who revealed that it was his dream to turn Villa into one of the world’s top three clubs when he took over two years ago, had previously always made regular transfers to cover the outgoings, averaging around £4m a month across his first season. Yet the Guardian understands that those payments were made nothing like as consistently from as far back as 2017.
Villa, one way or another, managed to get by for the majority of last season, sometimes by asking clubs to bring forward staggered transfer fees for players that had been sold on. That practice, not uncommon in the Championship, saw Villa write off money in the long term to solve cash-flow problems in the short term.
Reality, however, was about to bite. In April and May, as the season neared the end, the money trail from China dried up completely and Villa’s financial position became critical. HM Revenue & Customs was due a payment in the region of £4m after May’s payroll and Villa, quite simply, had no way of getting their hands on the money.
The Championship play-off final was on the horizon – a get-rich-quick ticket that had the potential to put Villa’s financial worries to bed – but so was the HMRC deadline, which came 24 hours before the pivotal game against Fulham at Wembley. Villa missed the deadline and the golden ticket slipped through their fingers the following day. Suddenly it was crisis time.
Plenty of staff working within Villa Park must have seen the storm coming, including Keith Wyness, the chief executive, who felt duty-bound to act once it became clear that the club were not going to be able to pay HMRC. Wyness, who would have known the fiduciary responsibilities that come with his role on the board, is believed to have sought insolvency advice before and after the Fulham match.
Indeed, it is understood that Wyness advised Xia, who has been in Beijing since the play-off final, of the severe consequences of failing to pay HMRC, including the prospect of Villa being placed in administration and served with a winding up petition...
Xia, the Chinese businessman who revealed that it was his dream to turn Villa into one of the world’s top three clubs when he took over two years ago, had previously always made regular transfers to cover the outgoings, averaging around £4m a month across his first season. Yet the Guardian understands that those payments were made nothing like as consistently from as far back as 2017.
Villa, one way or another, managed to get by for the majority of last season, sometimes by asking clubs to bring forward staggered transfer fees for players that had been sold on. That practice, not uncommon in the Championship, saw Villa write off money in the long term to solve cash-flow problems in the short term.
Reality, however, was about to bite. In April and May, as the season neared the end, the money trail from China dried up completely and Villa’s financial position became critical. HM Revenue & Customs was due a payment in the region of £4m after May’s payroll and Villa, quite simply, had no way of getting their hands on the money.
The Championship play-off final was on the horizon – a get-rich-quick ticket that had the potential to put Villa’s financial worries to bed – but so was the HMRC deadline, which came 24 hours before the pivotal game against Fulham at Wembley. Villa missed the deadline and the golden ticket slipped through their fingers the following day. Suddenly it was crisis time.
Plenty of staff working within Villa Park must have seen the storm coming, including Keith Wyness, the chief executive, who felt duty-bound to act once it became clear that the club were not going to be able to pay HMRC. Wyness, who would have known the fiduciary responsibilities that come with his role on the board, is believed to have sought insolvency advice before and after the Fulham match.
Indeed, it is understood that Wyness advised Xia, who has been in Beijing since the play-off final, of the severe consequences of failing to pay HMRC, including the prospect of Villa being placed in administration and served with a winding up petition...
