by Anchored at the bottom of League One, a fan base in rebellion and mired in financial difficulties, Reading are another cautionary tale of owners reaching for the stars but flying too close to the sun.
Dai Yongge’s Premier League dream has gone badly wrong and, just when Reading fans feared their plight could not get any worse, the next seven days represent another crucial week in their recent history.
Yongge must attend a hearing to answer a charge of misconduct by the English Football League and could be suspended if an independent commission finds him guilty.
The Chinese businessman has already been fined £10,000 for late payment of wages and now faces further punishment for failing to deposit funds into a designated account.
However, the more serious concern for Reading fans is the threat of another points deduction “for continued non-payment of monies owed to HMRC”.
Reading have already had 16 points deducted under the current regime and are anxious at the prospect of further penalties, with the tax bill finally settled earlier this month after 79 days.
The club is already under restrictions for the next three transfer windows after a series of late payments since July.
Another point deduction would be another stab in the hearts of those fans who have witnessed Yongge presiding over a masterclass in mismanagement.
Reading, who were relegated from the Premier League 10 years ago, were once recognized as the benchmark for sensible, well-run clubs. After winning the championship by a record 106 points in 2006, they finished eighth in the top division the following season.
At the time of Yongge’s takeover in May 2017, Reading were days away from the Championship play-off final against Huddersfield, which they would lose on penalties.
Shortly after the sale was completed, former owner Sir John Madejski commented: “Anyone with a lot of money getting involved in Reading makes my day.”
However, while Yongge’s ambition is not in doubt (he has invested more than £200m), the time has come to sell and avoid causing further damage.
Reading face local rivals Wycombe on Saturday 10 points from safety, with manager Ruben Selles under increasing pressure despite the off-field chaos.
Although this weekend will be just a short trip, Reading’s cash problems are so bad that overnight stays before away games have been suspended.
A protest group called ‘Sell Before We Dai’ has been set up and they say they are “extremely concerned” about the future of the club.
Adam Jones, spokesman for the group, said: “The soul of this club has been sucked out by a terrible owner and, despite the efforts of local fans who have continued to attend, many supporters have voted with their feet and decided not to. come more.
“You can’t blame them, because the results and performances on the field have been miserable in recent years. Not only has our off-field situation been a sham, but standards have been declining on the field since Dai Yongge took over.
“Football is supposed to be an escape from everyday life, but for fans, everyday life has been a welcome escape from Reading.”
Little is known about Yongge in this country and he rarely conducts interviews apart from occasional statements on Reading’s official website.
Now 55, he made money converting bomb shelters into shopping malls and is said to be the chief executive of Renhe Commercial Holdings Company Limited.
Yongge rents a seven-storey Grade II listed mansion near Buckingham Palace, which was valued at £76.5 million three years ago. He is also believed to be a regular customer of the exclusive Mayfair casino, Les Ambassadeurs.
Problems have allegedly arisen due to their inability to transfer money from China to England, as the Chinese government imposes limits on capital leaving the country.
However, Yongge has already seen two other football clubs collapse due to bankruptcy under his ownership: KSV Roeselare in Belgium folded in 2020, while Chinese club Beijing Chengfeng dissolved after suffering two successive relegations.
It’s also worth remembering that Yongge and his sister, Dai Xiu Lu, once failed to take over Hull City after allegedly failing the fit and proper test. [as it was known then].
The Premier League were reportedly “cautious” about their plans to buy Reading and, within a few years, those concerns seemed well founded.
In the 2018-19 season, Reading’s wage bill was reported to be £40 million, representing 194 per cent of its turnover. For the following campaign, their accounts revealed total accumulated losses of £138 million.
Sources with knowledge of the Reading situation note that Yongge and his associates relied heavily on the advice of prominent agents during that period.
Reading were first punished with a six-point deduction by the EFL in November 2021, for exceeding losses above the £39m allowed over three years.
More punishments for non-payment of wages and failure to comply with financial regulations followed over the next two seasons.
The EFL has been criticized for imposing sanctions, although decisions are always made by a commission. Trevor Birch, chief executive of the EFL, said earlier this month: “We must ensure that all 72 members are treated fairly and consistently in all matters so that the integrity of the competition is maintained.”
The test of their owners and directors has now been toughened, but that is of little comfort to Reading fans.
There is hope for a better future, despite the deepening crisis. Yongge is examining at least three takeover bids and is prepared to grant one group exclusivity over a deal, which could cost around £50m in total.
Former Newcastle owner Mike Ashley has made an offer, while there are suggestions of interest from American investors and a party linked to Ken Anderson, former Bolton Wanderers chairman.
Nigel Howe, Reading’s former chief executive, is helping Yongge in the negotiations.
With the club facing relegation to League Two, Yongge is under pressure to make a decision.
“It’s vitally important that you find the right buyer,” says Caroline Parker, another spokesperson for ‘Sell Before We Dai.’
“This cannot be a ‘get out of the frying pan and into the fire’ situation. We need a sensible owner who doesn’t get carried away by the rules.
“We urge the EFL to be rigorous with their testing of new owners as this cannot happen again.”
These are still very worrying times, but Reading fans only need to consider recent episodes at Birmingham City and Derby to realize that everything can change.
However, it must happen quickly as the future of a 152-year-old club is at stake.
