Birmingham City have been plunged into crisis after Carson Yeung, the club's president and largest single shareholder, was arrested by Hong Kong police over allegations in relation to money-laundering.
The 51-year-old was detained in custody after being charged with five counts of "dealing with property known or believed to represent proceeds of an indictable offence".
Yeung, who has a 23.3% stake in the Championship club and is chairman of its parent company, Birmingham International Holdings Limited, is due to appear in court on Thursday. Peter Pannu, Birmingham's acting chairman, said Yeung was assisting Hong Kong police in relation to criminal investigations which, at this stage, he believes do not have any connection to the operation of the parent company or any of its subsidiaries.
News of Yeung's arrest is, however, a major embarrassment for the club and will prompt fresh concerns about the ownership structure at St Andrew's. The Football League has confirmed that it is closely monitoring the situation and will continue to do so before deciding whether to take any action. The Premier League will be relieved the problem is no longer on their watch.
Hong Kong police, who would not confirm the identity of the person arrested in relation to the money laundering case, issued a statement that said: "Police today [29 June] arrested a male, aged 51, in connection with a money-laundering case. Narcotics bureau officers also searched a total of two locations today, one on Hong Kong Island and one in Kowloon, and seized some documents.
"The arrested person has been charged with five counts of dealing with property known or believed to represent proceeds of an indictable offence and is detained in police custody. He will appear in Eastern Magistracy tomorrow [30 June]. Active police investigation is under way."
Pannu said the investigation was not connected to the club and parent company. He said: "I have just had a call from the Birmingham International Holdings' lawyers informing me of the position in Hong Kong and I have also been informed by them that Carson is assisting with inquiries that have nothing to do with the operation of BIHL in Hong Kong and therefore nothing to do with the operation of the club, and relate to other matters. 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. I am only using this as an example to calm any fears."
Yeung took over at St Andrew's in October 2009, when he assumed control from David Gold and David Sullivan, after agreeing a deal that valued the club at £81m. Little, however, is known about the source of his financial backing, which came under fresh scrutiny last season when auditors posted warnings about the club's ability to continue in business. It later emerged that Yeung was preparing to mortgage his private properties in a cash-raising exercise to help keep the club solvent.
Although Yeung saw Birmingham win their first major trophy in 48 years, when they defeated Arsenal in the Carling Cup final at Wembley in February, he was also present at White Hart Lane on the final day of the season to see the club relegated to the Championship. The turmoil at the club continued with departure of the manager, Alex McLeish, to Aston Villa this month and shows no sign of abating following Yeung's arrest.
guardian.co.uk © Guardian News and Media Limited 2010
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