Actions and Reactions: The Ethics of Emailing the HKSE

Hong Kong Stock Exchange

It’s been a tough few weeks to be a Birmingham City supporter. Actually, that’s a lie, it’s been a tough few years but the last few weeks have been rougher than most.

The team had already dropped to 23rd in the Championship table, when on Saturday they offered a performance which can only be described by the word flaccid.

I’d opine that the club needed some Viagra to put some pep in their step but it’s probable we need to save that going up feeling for next year when we’re in League One.

The performance was so bad Blues manager Aitor Karanka said in a post-match interview that it would be impossible to believe that the team to stay up should they continue to perform as badly.

This all came on the back of the club’s CEO Ren Xuandong telling BBC Radio WM reporter Richard Wilford that he had no doubt that Birmingham City manager Aitor Karanka was the man for the job, and that while sad the players hadn’t got the points their performances deserved, he felt positive about the “growth” and “progression” he’d seen as a team.

As one can imagine, there are a fair few peeved Blues fans right now online. As ever, trying to be the practical person, along with my comrades in the 1875 group Matthew Elliott and Chris Goulding, I offered an idea for what fans could do to help effect change at the very top.

I’m writing this piece on my own cognisance; it’s not an “official” 1875 communication and it represents no one’s views but my own. What I want to do is to offer my reasons for why I’m asking people to email the Stock Exchange of Hong Kong, what I’m hoping it achieve and the risks I think are possible.


On Friday February 12, Radio WM broadcast a 15 minute interview with Birmingham City CEO Ren Xuandong, conducted by reporter Richard Wilford.

In that interview, among various other facts and figures Ren Xuandong twice made mention that the club is forecasted to make a loss of £6.7M this year.

While that might seem innocent, that data is market sensitive and should not have been given out in the interview. As it stands, Birmingham Sports Holdings Ltd (the HKSE-listed parent company of the club) have not released their interim results for the year, and have made an announcement in January that the group expects to have made a profit in the first six months.

Likewise, neither Birmingham City Football Club plc nor its UK parent company Birmingham City plc have produced their accounts for last season, which may have offered an indicator as to finances this season in the future contingencies section.

While BCFC’s figures are different to those of BSH, the football club has made up more than 90% of the turnover for BSH for many years and thus will have a massive material effect on what the results for BSH could be.

Thus, in my eyes as a shareholder in BSH, the figures given out by Ren Xuandong were in contravention of Chapter 13 of the Hong Kong Stock Exchange rules — specifically 13.06A and 13.06B:

13.06A An issuer and its directors must take all reasonable steps to maintain strict confidentiality of inside information until it is announced.

13.06B An issuer must not divulge any information in such a way as to place in a privileged dealing position any person or class or category of persons. It must not release any information in such a way that Exchange transactions may be entered into at prices which do not reflect the latest available information.

I reported what I considered the breach to be on the evening of Friday 12th February, and then templated an email so that other fans could also do the same should they feel the desire or need to do so.

Potential Actions of the HKSE

There are various actions the HKSE can take in light of this potential breach.

Back in 2014, I reported a similar breach of insider information rules when then-Blues “Acting Chairman” and BSH CEO Peter Pannu posted as a comment on detailed financial information about Birmingham Sports Holdings.

The HKSE took a very dim view of this and immediately demanded a halt of trading in shares in BSH (then called Birmingham International Holdings). That caused a chain reaction of events starting with the firing of Peter Pannu and culminating in the appointment of Receivers to run the company to ensure minor investors were looked after.

It’s entirely possible that trading in shares could be brought to a halt again.

If and when that happens, then I have no doubt it will cause alarm within BSH’s head office. It will mean that until the suspension in trading has been lifted it will be difficult to raise money by offering rights or subscription issues, and it will invite questions from the HKSE into the governance and accounting of the company; questions that BSH may not feel comfortable in answering.

There would be much fallout from that, but there are so many variables that are impossible to predict I would not like to even hazard a guess as to what would happen.

However, I believe it would also offer an opportunity for an outside investor or consortium to come in and offer to take the club from out of the hands of the listed company. I’ll readily accept that there is no guarantee of success or even of better owners, but I would also offer the opinion that it offers a chance of success that is not currently present.

The HKSE might not consider the breach severe enough to warrant a suspension of trading in shares, but severe enough to warrant a reprimand or reminder to BSH of their duties as a listed company.

My feeling is if that happened that would bring increased pressure on Ren Xuandong from the HK listed company. It would be the second time that the company have been given a slap on the wrist because of something Ren has done, and it might force action into the removal of Ren from his position as CEO.

I will state openly I would be happy to see the company consider a new person as CEO as I believe Ren has failed at the job.

It might be the HKSE considers there is no case to answer. In which case, nothing further will happen, and all that will have been wasted is a few emails.

Risk and Reward

There has been some talk about the risk occurring by undertaking such action.

This is an absolutely fair point. In a previous Medium blog I offered the point that any fan action should have thoughts about if any unintended consequences will occur — and how bad these might be.

In my opinion, the biggest risks come down to money; levels of funding into the club from Hong Kong either being lowered or completely withdrawn, leaving the club with severe financial issues.

Obviously that is painful and is going to hurt not only the fans but the people working for the club, and people supplying the club. It’s not something to take lightly and I think serious thought has to be given to it.

However, it’s my personal opinion that the club is on a financial precipice anyway, with a constant sword of Damocles hanging over it regarding finance. The club owes in excess of £110M to two main debtors — Birmingham Sports Holdings and Oriental Rainbow Investments. The only reason the debt isn’t being called in is because it may do damage to the listing; in other words it’s not because of the damage it would do to the club.

Thus the risks being taken are that the issue will be forced to happen sooner rather than later; which in my opinion although being painful also offers a potential fix of the problem sooner rather than later.

I think the actual risk of funding being withdrawn because of our actions are quite low, because I think the possibility of there being a suspension in trading of shares is also quite low. However, I think the possibility that pressure being placed to remove Ren Xuandong would be quite high, and I think that the removal of Ren would also enforce the removal of Karanka, which seems optimal at this time.


There’s also been some talk of the ethics of using Ren Xuandong’s words against him after campaigning for so long to get Ren to speak on record.

I think this is a very flawed argument, as the whole reason to get a CEO to speak on record is so that they are accountable for their words and actions. If the CEO is stupid enough to say something that causes their company issue then it’s absolutely right to hold them accountable for doing so.

I’d further offer the opinion that this isn’t actually the first time it’s happened either. The first time it happened Ren gave similar information to someone else to put out into the public domain; information that could have got that person into a whole heap of trouble. It was only because a larger number of like minded people contacted that person and told them to quickly remove that information that they didn’t get caught out by it.

That in turn suggests a pattern of behaviour from Ren, and also suggests to me that Ren Xuandong is unfit to perform the role he is currently in.

People have offered the opinion that by taking the course of action offered by myself and 1875, we have endangered the chances of Ren granting an interview again, should nothing change. I’d counter that Ren’s words have proven that he should not be in the position he is in, so it is moot whether he grants an interview again as there is nothing he can say that will change that fact.


I fully understand the reticence of some people to take part in the action initiated by the 1875 group and myself, and I accept the questions that have been asked. Those questions show that people are thinking responsibly and are concerned that we as fans should act in the right way, to do the least harm possible when trying to effect change.

However, I believe that the club is already on a dangerous path which has many dark possibilities. I feel that a time has come that we must do what we can to try and push things into a brighter long term future.

¯\_(ツ)_/¯ #bcfc #sfgiants #youbears #Grimezsz #YuriSNSD