The collapse of Wigan Athletic football club is a “global scandal” that should force the English Football League to tighten ownership rules, the town’s MP has said.
Lisa Nandy, the shadow foreign secretary, has called for government intervention after the English championship club was put into administration by a new Hong Kong-based owner just weeks after he took over.
She has asked Oliver Dowden, culture secretary, to investigate allegations that the move into administration is an attempt to relegate the club because of a bet. EFL chairman Rick Parry was filmed discussing the claim on Thursday.
The EFL deducts 12 points from clubs going into administration, which on current standings would relegate Wigan from the Championship, the level below the Premier League, to League One.
“There’s rumours that there’s a bet on them in the Philippines on them being relegated,” Mr Parry said in a video posted on social media. “The previous owner has got gambling interests on the Philippines.”
The EFL confirmed the video was genuine and said Mr Parry was having a chat with a neighbour who supported Wigan.
“The private conversation focused around the events of the last 24-48 hours, how the EFL can assist and what happens next. The various rumours and reports that have been circulating . . . were also discussed,” it said.
Wigan was sold on May 29 by International Entertainment Corporation, a Hong Kong listed business that owns a casino in the Philippines, to the Next Leader Fund. Stanley Choi, the professional poker player who controls IEC was also until recently majority shareholder of Next Leader Fund, which is headed by Hong Kong businessman Au Yeung Wai Kay. The acquisition of the club was completed on June 4.
Mr Au Yeung approached administrators on June 24 after refusing to provide a promised £6m to pay bills, as pledged when he purchased the club, according to Gerald Krasner, the club’s joint administrator. He added that administrators were appointed on June 30.
A person with knowledge of the situation said that Mr Au Yeung provided proof of funds.
Mr Au Yeung could not be reached for comment. But Ms Nandy said the EFL had not conducted thorough due diligence.
Ms Nandy told the FT: “This is a global scandal. How could the ownership change have been approved? This should never happen again. The rules need to change.” She has asked Mr Dowden to ensure proper checks are carried out on any prospective buyers of the club, and has asked the government to provide funds to enable the club to play the final six games of the season.
Mr Krasner, of insolvency specialists Begbies Traynor, who has handled several football administrations, said Wigan was “a first” and “incredible things” had gone on. He said he would investigate the sale to Next Leader once the club’s future was secure.
He told reporters that the EFL should introduce a five-year bond for new owners that could pay out if they reneged on commitments.
The EFL also “need to start looking at foreign ownership a bit more”. He predicted at least six more clubs across England’s lower leagues could go bankrupt because of the coronavirus lockdown, which bans fans from stadiums, cutting revenue.
But Roger Elford, partner at Charles Russell Speechlys, a law firm, said a bond “may act as a significant deterrent to investment in EFL clubs, and may result in clubs failing that might otherwise have been rescued by wealthy investors or benefactors”.
The EFL declined to comment, but according to its website it is currently reviewing regulations “relating to a change in control of a member club”.
Mr Choi and IEC did not respond to a request for comment.