'Sell before we Dai': How Reading went from model club to the edge of the abyss
Anchored to the foot of League One, a fanbase in revolt, 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 awry and, just when Reading’s supporters feared their plight could not get any worse, the next seven days represent another pivotal week in their recent history.
Yongge is due to attend a hearing to answer a misconduct charge from the English Football League and could be banned if found guilty by an independent commission.
The Chinese businessman has already been fined £10,000 for late payment of wages and is now facing further punishment for failing to deposit funds into a designated account.
Yet 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 been deducted 16 points under the current regime and are anxious at the prospect of more sanctions, with the tax bill finally settled earlier this month after 79 days.
The club is already under restrictions over the next three transfer windows after a number of missed payments from July.
Another points deduction would inflict another dagger to the hearts of those supporters who have witnessed Yongge preside over a masterclass in mismanagement.
Relegated from the Premier League 10 years ago, Reading were once renowned 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 remarked: “Anybody with deep pockets that gets involved in Reading makes my day.”
Yet while Yongge’s ambition is not in question – he has invested more than £200 million – the time has now come for him to sell up and prevent causing any further damage.
Reading face local rivals Wycombe on Saturday 10 points adrift of safety, with head coach Ruben Selles under increasing pressure despite the chaos off the field.
Though this weekend will just be a short trip, Reading’s cash problems are so severe that overnight stays ahead of away matches have been stopped.
A protest group has been set up called ‘Sell Before We Dai’ and say they are “extremely concerned” about the club’s future.
Adam Jones, a spokesperson for the group, said: “The soul of this club has been sucked out by a terrible owner and despite the efforts of the home fans who have continued to go, a lot of supporters have voted with their feet and decided not to come any more.
“You can’t blame them, because results and performances have been miserable on the pitch in recent years. Not only has our off-field situation been a farce, but standards have been declining on the field since Dai Yongge took over.
“Football is supposed to be an escape from daily life, but for the fans, daily 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 the official Reading website.
Now 55, he made his money through the transformation of air-raid shelters into shopping centres and is said to be the 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 have allegedly arisen through his inability to transfer money from China to England, with the Chinese government imposing limits on capital flowing out of the country.
However, Yongge has already seen another two football clubs collapse through bankruptcy under his ownership: KSV Roeselare, in Belgium, folded in 2020 while Chinese club Beijing Chengfeng dissolved after suffering two successive relegations
It is also worth remembering that Yongge and his sister, Dai Xiu Lu, once failed with a takeover of Hull City after allegedly failing the fit and proper persons’ test [as it was known then].
The Premier League were reportedly “cautious” over their plans to buy Reading, and within years those concerns appeared well-founded.
In the 2018-19 season it was reported that Reading’s wage bill was £40 million, working out as 194 per cent of their turnover. For the following campaign their accounts revealed total accumulated losses of £138 million.
Sources with knowledge of Reading’s situation point to Yongge and his associates relying 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 over the permitted £39 million across three years.
Further punishments have followed over the next two seasons, for non-payment of wages and breaching financial rules.
The EFL has come under criticism for imposing the sanctions, though the decisions are always reached by a commission. Trevor Birch, the EFL’s chief executive, said earlier this month: “We are required to ensure all 72 members are treated fairly and consistently on all matters so that the integrity of the competition is maintained.”
Their owner and directors’ test has now been toughened up, but that is no consolation to Reading’s fans.
There is hope of a brighter future, despite the deepening crisis. Yongge is sifting through at least three takeover offers and is poised to grant one group exclusivity over a deal, which could cost around £50 million in total.
Former Newcastle owner Mike Ashley and Genevra Associates, an investment group based in Luxembourg, have made offers, while there are suggestions of interest from American investors, and a party linked to Ken Anderson, the ex-chairman of Bolton Wanderers.
Nigel Howe, the former Reading chief executive, is assisting Yongge in negotiations.
With the club facing relegation to League Two, Yongge is under pressure to make a decision.
“It is of critical importance that he finds the right buyer,” says Caroline Parker, another spokesperson from ‘Sell Before We Dai’.
“This cannot be an ‘out of the frying pan and into the fire’ situation. We need a sensible owner that doesn’t play fast and loose with the rules.
“We urge the EFL to be rigorous with their tests for any 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 take heart that it can all turn around.
It needs to happen quickly, though, for the future of a 152-year club is at stake.
