Here we go again...  Southampton's Dusan Tadic seen here during a match with Hull City, both teams at the center of controversial Chinese takeover discussions. Photo: Reuters / Tony O'Brien Livepic
Here we go again... Southampton's Dusan Tadic seen here during a match with Hull City, both teams at the center of controversial Chinese takeover discussions. Photo: Reuters / Tony O'Brien Livepic

The Premier League is believed to have hired forensic investigators to find out whether Chinese investors in England’s top soccer teams are in fact strands of a rule-breaking, conspiratorial web tied to the country’s government, says a leading British expert on the industry.

The rules of soccer’s richest league state that, “If a party owns 10% or more of one club, they are not permitted to own more than a 9.9% stake in another club,” said Simon Chadwick, Professor of Sports Enterprise at University of Salford.

“There is suspicion among some within football that the Chinese government, through its involvement with various investors, may be breaching or seeking to breach such rules,” he said, declining to reveal the source of his information.

The investigators are now burrowing deep into the corporate structure of all prospective Chinese investors to see if they are “insufficiently indistinct from the Chinese state,” Chadwick said. If this was found to be the case it would mean “the English football authorities rejecting their bids to acquire clubs as it would breach the ownership regulations.”

Chadwick made the claims in an interview about the potential sale of Southampton Football Club by current owner, Swiss-German Katharina Liebherr, to Chinese businessman Gao Jisheng and his sports and entertainment business, Lander Sports Development.

Liebherr has been in talks with Gao since October 2016 and the English Premier League – which runs the top division in English football and is currently, in TV revenue terms, the richest football league in the world – has blocked the sale.

Lawyers representing both parties met with Premier League officials last week in an attempt to convince them to allow the deal, reportedly worth in the region of US$250 million, to go ahead.

How the Sun dunnit…

Media in the UK have reported that the English Premier league prevented the sale because Gao Jisheng failed a “fit and proper person” test applied to all potential owners, with English news reports highlighting his one-time connections with two corrupt Chinese officials: Xu Maiyong, former vice-mayor of Hangzhou; and Jiang Renjie, former vice-mayor of Suzhou, who were executed in 2011 after being found guilty of embezzling approximately US$50 million.

Chinese media, however, have not mentioned these links in relation to Gao’s bid and instead have reported that his Shenzhen-listed Lander Sports Development has stopped the deal simply because it is toeing the government line.

Beijing has in recent months very visibly tightened regulations on capital leaving China, especially for funds being used to invest in entertainment businesses. The Southampton delay, said Lander Sports Development in a statement to the Shenzhen exchange that was quoted in numerous Chinese news outlets, is due to the ”fast changing environment and policies of China’s stock market.”

Gao’s office in the eastern Chinese city of Hangzhou is now saying that the Southampton deal will be done privately so Lander can, according to its April stock exchange statement, “keep its principles prudent and safeguard the majority of investors’ interests.”

Trading in Lander shares were suspended at its own request in October 2016 when news of the Southampton deal became public. They resumed again in April – when Lander issued its “prudent principles” stock exchange statement – with Lander saying that the buyout as it initially stood was now dead but will proceed as a private deal. Gao Jisheng will be the new owner of Southampton and this, supposedly, will avoid the tightened bureaucratic regulations that now exists around overseas capital outflow from a listed Chinese company.

Lander declined to answer Asia Times queries, saying it could not currently comment on any matters related to the Southampton deal. The English Premier League and Southampton Football Club did not respond to Asia Times questions.

What is certain is that Chinese president Xi Jinping started the Chinese rush to soccer in 2014, after stating his desire to turn China into a global sporting powerhouse. China’s powerful businesses had already been responding to earlier calls to “head overseas” and to increase the country’s soft power through acquisitions of so-called cultural businesses.

Gao, with impressive patriotic haste, followed the latest clarion call and changed his real estate business, founded in 1990, into a sports related one – Lander Real Estate became Lander Sports Development in 2014 — and since then the business has been involved in a string of large-scale and often international facing entertainment businesses that include Chinese football and basketball teams, stadiums, Macau casinos and sports-related broadcasting companies.

But does this mean that Gao Jisheng is a front for Beijing’s world-conquering sporting ambition? Perhaps. But possibly only as much as everyone is in a China that is still, technically, a state-controlled economy.

According to Forbes magazine, the share value of Lander increased by a jaw dropping 700% the year it re-nosed itself into a sports business and Gao, who owns 59% of Lander – his daughter owns the balance – was now worth US$1.4 billion. So if he just a cog in a state run masterplan for global football domination, he has done very well from it.

2 replies on “Is China’s deep state behind English soccer investment push?”

Comments are closed.