Reading, anchored at the foot of League One, a fanbase in revolt and mired in financial difficulties, is 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 supporters feared their situation could not get any worse, the next seven days represent another crucial week in their recent history.
Yongge will attend a hearing to answer a misconduct charge from the English Football League and could be suspended if found guilty by an independent commission.
The Chinese businessman has already been fined £10,000 for late wage payments and now faces further penalties for failing to deposit money into a designated account.
But the more serious concern for Reading fans is the threat of a further points deduction “for continued non-payment of monies owed to HMRC”.
Reading has already had 16 points deducted under the current regime and they are concerned about the prospect of more sanctions, with the tax bill finally settled earlier this month after 79 days.
The club has already imposed restrictions for the next three transfer windows after a number of missed payments from July.
Another point deduction would strike another dagger in the hearts of supporters who witnessed Yongge preside over a masterclass on mismanagement.
Relegated from the Premier League a decade ago, Reading was once known as the benchmark for sensible, well-managed clubs. After winning the championship with 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 deep pockets who gets involved with Reading makes my day.”
But while Yongge’s ambition is not in question – he has invested more than £200 million – the time has now come for him to sell his business and avoid further damage.
Reading face local rivals Wycombe on Saturday 10 points behind safety, with head coach Ruben Selles under increasing pressure despite the chaos off the pitch.
Although this weekend will only be a short trip, Reading’s money problems are so serious that overnight stays ahead of away games have been halted.
A protest group called ‘Sell Before We Dai’ has been set up, saying it is ‘extremely concerned’ about the club’s future.
Adam Jones, a spokesman for the group, said: “The soul of this club has been sucked out by a terrible owner and despite the best efforts of the home fans who have kept going, many supporters have voted with their feet and decided not to come anymore .
“You can’t blame them, because the results and performances on the field have been terrible in recent years. Not only has our off-field situation been a farce, but on-field standards have also dropped since Dai Yongge took over.
“Football should be an escape from everyday life, but for the fans, everyday life was a welcome escape from Reading.”
Little is known about Yongge in this country, and he rarely conducts interviews apart from occasional statements on the official Reading website.
Now 55, he made his money transforming bomb shelters into shopping centers and is said to be executive chairman 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 thought to be a regular at Mayfair’s exclusive casino, Les Ambassadeurs.
Problems are said to have arisen from his inability to transfer money from China to England, with the Chinese government imposing restrictions on the flow of capital out of the country.
However, Yongge has already seen two other football clubs collapse due to bankruptcy under his ownership: KSV Roeselare, in Belgium, went bankrupt in 2020, while Chinese club Beijing Chengfeng dissolved after two consecutive relegations.
It is also worth remembering that Yongge and his sister, Dai Xiu Lu, once failed to take over Hull City after reportedly failing the suitability 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 2018/2019 season it was reported that Reading’s wage bill was £40 million, representing 194 percent of their turnover. For the next campaign their accounts revealed total accumulated losses of £138 million.
Sources with knowledge of Reading’s situation indicate that Yongge and his associates were heavily dependent 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 allowable £39 million over three years.
More punishments followed over the next two seasons for non-payment of wages and violation of financial rules.
The EFL has been criticized for imposing the sanctions, although the decisions are always made by a committee. Trevor Birch, the EFL’s chief executive, said earlier this month: “We are obliged to ensure that all 72 members are treated fairly and consistently in all matters so that the integrity of the competition is preserved.”
Their owner and director test has now been tightened, but that is no consolation for Reading fans.
There is hope for a better future, despite the deepening crisis. Yongge is exploring at least three takeover offers and is ready to grant one group exclusivity in a deal, which could cost around £50 million in total.
Former Newcastle owner Mike Ashley has made a bid, amid interest from American investors and a party linked to ex-Bolton Wanderers chairman Ken Anderson.
Nigel Howe, Reading’s former chief executive, is assisting Yongge in the negotiations.
With the club at risk of relegation to League Two, Yongge is under pressure to make a decision.
“It is crucial that he finds the right buyer,” said Caroline Parker, another spokesperson for ‘Sell Before We Dai’.
“This cannot be an ‘out of the pan and into the fire’ situation. We need a sensible owner who doesn’t play fast and loose with the rules.
“We urge the EFL to be strict with their testing for new owners as this cannot happen again.”
These are still very worrying times, but Reading fans only have to look at the recent episodes at Birmingham City and Derby to be sure that it could all change.
However, it must happen quickly, because the future of a 152-year-old club is at stake.