What we've learned in the week since Wigan Athletic went into administration

When Dave Whelan sold the club to Hong Kong-based International Entertainment Corporation, Wigan Athletic went into the unknown.

But nobody could have predicted the fate that would befall the former FA Cup winners – and the way in which its future would be plunged into uncertainty in such dramatic fashion on July 1, 2020.

Yes, there was an uncertainty when IEC took over.

But any early cynicism of foreign ownership receded with the early investment; in the stadium facilities – and in the squad.

There was a new big screen, updated bars, an improved pitch.

And when £7m was made from the sales of Will Grigg and Dan Burn, reducing the club's losses to £9.2m, it was followed up with more investment last summer.

Coupled with that was the reassurance that IEC is listed on the Hong Kong Stock Exchange, with the transparency of published financial updates.

Even when the club was sold last month, it was passed off as a restructure, given the chairman of IEC – Dr Choi Chiu Fai Stanley, reportedly a professional poker player – owned more than half of both the selling company and the buying company, Next Leader Fund.

There was a thread of consistency.

The new owner was effectively the old owner, too.

What’s more, there was a new director, Au Yeung, coming on board.

“I hope to work with the staff within the club in the future and most importantly I hope to meet the club’s passionate fans,” he said at the time.

Some supporters questioned the motives of the new owners who, in addition to the £17.5m paid for the club, and raised concerns about the little public information available about Au Yeung.

On June 24 – just a week before the club was placed into administration – Au Yeung went from minority shareholder to owning 75 per cent of Next Leader Fund - and consequently Wigan Athletic.

NLF, only set-up in January, operates out of Hong Kong but is registered in the Cayman Islands.

It was stated that the £24m loan, covering the money spent by IEC since buying Latics, had been repaid in full as part of Au Yeung’s takeover.

The English Football League approved the change, meaning the governing body was satisfied the new owners were fit and proper and there was money in the bank.

This test has been widely criticised as being inadequate, with some suggesting owners need to provide a bond - rather than proof of funds - but either way, they passed it.

And in the day-to-day operations, there were no red flags that the owners wanted to stop funding the club, and so suddenly.

Consider this: On Friday June 25, the club extended Leon Balogun’s contract and gave striker Joe Garner a new deal.

The day later, an ex-Hong Kong footballer Szeto Man Chun – recruited by former owners IEC as a ‘football consultant’ – watched their 2-0 win against Blackburn Rovers.

Just three days later, and hours before hosting Stoke City at the DW Stadium, executive chairman Darren Royle and chief executive Jonathan Jackson were told in a phone call there would be no more money, and that the club was being placed into administration.

They were stunned. They’d had no notice.

"We were as shocked as anyone," said Jackson, a lifelong fan who has been in the role for a decade. "We were planning for next season knowing that we would be almost certainly staying up. The events of the past week have been heartbreaking after years spent developing a successful academy and creating a competitive Championship team with players coveted by other clubs."

By the time Jackson was informed, lawyers acting for the owners had already made contact with administrators Begbies Traynor last Tuesday, and their appointment was ratified by the court the following morning. Manager Paul Cook, shielded from the bombshell news to prepare his squad for their Tuesday night game against Stoke, was told the following morning.

“His reaction was being very surprised,” says Paul Stanley, one of the three administrators in charge.

“Normally in these circumstances we’re picking up clubs on a losing streak and people haven’t been paid.”

At 12.30pm last Wednesday, some staff lined the back wall of the South Stand bar as Krasner confirmed at a hastily-arranged press briefing that the club was in administration.

Less than a month after the new owners had taken charge.

“I think four weeks (from sale to administration) is a record that will stand for some time,” said Krasner.

When asked why the owners wouldn’t have elected to wait three weeks until the end of the season to assess options – perhaps even sell players to raise revenue – the former Leeds United chairman said, simply, “No comment.”

For many, it simply made no sense.

If the new owners wanted a sharp exit, they could have waited three weeks, sold their best players and recouped some losses. Antonee Robinson, remember, was the target of a £9m move in January, while Joe Gelhardt has been tracked by many Premier League clubs.

Later this month, they were also due to receive more than £2m in central funding from the EFL - money which will, now, not be paid.

The EFL confirmed administration would bring with it a 12-point penalty – ready to send Latics to the bottom of the table.

The puzzling and baffling development took an extraordinary twist the following day.

A fan posted on social media a recording of a conversation with EFL chairman Rick Parry, in which he said there was a rumour that the club’s administration was linked to “a bet in the Philippines on them being relegated”.

The EFL confirmed the audio clip was genuine but did not say if it was investigating the rumours. The Gambling Commission did not respond to a request for comment.

Former chairman David Sharpe doesn’t think there is substance to the speculation.

“It’s a bit of a bizarre story, I can’t believe it, it’s very far-fetched,” he said.

“I struggle to believe that rumour... but you never know in this day and age.”

Subsequent investigations into the owners – and many fans have since spent hours trawling over financial documents – suggest Au Yeaung had previously been bankrupt.

Latics fan Dylan Harris is the owner of Lupine Travel, which specialises in ‘tours to unusual destinations’.

“Documents that I’ve applied for and obtained from the Official Receivers Office in Hong Kong now prove that Au Yeung Wai Kay was declared bankrupt in 2004. The bankruptcy was discharged in 2008,” he posted on Twitter.

A discharged bankruptcy does not necessarily prevent someone owning a football club, but it further murkies the waters.

Amid swirling rumours of insider trading, Wigan MP Ms Nandy described this as a “major global scandal”.

Krasner says he has instructed his legal team to make contact with lawyers representing the owners.

Lisa Nandy's plea for owner with right intentions

A London-based PR agency contacted Wigantoday yesterday, saying it had been commissioned to release a statement from Au Yeung, in which he blamed the coronavirus crisis for his decision to put the club into administration - despite the fact he took charge just a month ago, during the pandemic.

"We bought Wigan Athletic with the best intentions: to create a team that would get the club back into the Premier League, and I have invested more than £40million (to buy the club and repay a loan to former owners IEC)," he said.

Which brings us on to the loan itself.

"The new owner is said to have repaid the old owner the loan, on behalf of Wigan, and is now owed that money," Krasner told BBC Five Live last night.

This could, he explained, have ramifications on Latics next season - presuming they reach that point.

"If we sell the club we have to pay the creditors a minimum of 25p in the pound, otherwise we fail part of the test and there can be a penalty next season of 15 points," he explained.

"They could be hit with 12 points this season and 15 points next season, so it's a double-whammy."

He suggested a "strategy" to try and ensure the £24m loan is not added to the list of creditors, without divulging any details, but it is something the prospective new owners - and of the 50 showing interest, he expects three or four serious bidders - will want clarity about.

Krasner is also seeking evidence of any bet on the club being relegated, rather than rumour, so he can present it as part of their appeal against the 12-point penalty.

The more he has dug, the more he has discovered, the more he thinks that “if we made a film of what was going on, we could pay all the debts”.