Located on the outskirts of League One with 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 wrong and just as Reading’s fans fear their situation cannot get any worse, the next seven days represent another momentous week in their recent history.
Yongge will attend the hearing to respond to the English Football League’s accusation of misconduct 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 will now face further fines for failing to deposit the money into a designated account.
But the more serious concern for Reading fans is the threat of another points deduction “for non-payment of monies owed to HMRC”.
Readings have already been reduced by 16 points under the current regime and they are concerned about the possibility of further sanctions when the tax bill was finally decided earlier this month after 79 days.
The club is already under restrictions for the next three transfer windows after missed payments from July.
Another points deduction would be another dagger in the hearts of fans who have witnessed Yongge presiding over a masterclass in mismanagement.
Reading, who were relegated from the Premier League 10 years ago, were once known as the benchmark of smart, well-run clubs. After winning the Championship with a record-breaking 106 points in 2006, they finished eighth in the top division the following season.
When Yongge took over in May 2017, Reading were days away from reaching the Championship play-off final against Huddersfield, which they would lose on penalties.
Shortly after the sale was completed, former owner Sir John Madejski said: “Anyone with deep pockets involved in Reading would make my day.”
But while Yongge’s ambition is unquestionable (he has invested more than £200 million), now is the time to sell and prevent him from causing further damage.
Reading face local rivals Wycombe on Saturday, 10 points behind, with head coach Ruben Selles under increasing pressure despite the chaos on the pitch.
Although it’s a short trip this weekend, Reading’s cash problems are so serious that overnight stays have been suspended ahead of away games.
A protest group called ‘Sell Before We Dai’ was formed and they said they were “extremely concerned” about the future of the club.
The group’s spokesman, Adam Jones, said: “The soul of this club has been sucked out by a terrible owner and despite the efforts of supporters who continue to go, many fans have voted with their feet and decided not to come back again.”
“You can’t blame them because the results and performances on the field have been terrible in recent years. Not only is our situation off the field a farce, but standards on the field have also been falling since Dai Yongge took over.
“Football is supposed to be an escape from everyday life, but for the fans, everyday life has been a welcome escape from Reading.”
Little is known about Yongge in this country, and he is rarely interviewed apart from occasional statements on the official Reading website.
The man, now 55, is said to have made money converting air raid shelters into shopping malls and is chairman of Renhe Commercial Holdings Company Limited.
Yongge is near Buckingham Palace in a World War II building valued at £76.5 million three years ago. He rents a seven-storey, grade-listed mansion. He is also thought to be a regular at Mayfair’s exclusive casino, Les Ambassadeurs.
It is claimed that the problems arose because the Chinese government was unable to transfer money from China to the UK due to restrictions on capital leaving the country.
But Yongge has seen two more football clubs he owned collapse through bankruptcy: Belgium’s KSV Roeselare closed in 2020, while Chinese club Beijing Chengfeng disbanded after suffering two successive relegations.
It is also worth remembering that Yongge and his sister Dai Xiu Lu failed to take over Hull City after allegedly failing the fit and proper person test. [as it was known then].
The Premier League was reportedly “cautious” about plans to buy Reading, and over the years it has become clear that these concerns were well-founded.
Reading’s wage bill for the 2018–19 season was reported to be £40 million, accounting for 194 per cent of turnover. A total accumulated loss of £138 million was revealed in its accounts for the next campaign.
Sources with knowledge of Reading’s situation indicate that Yongge and his friends relied heavily on the advice of leading agents at the time.
Reading were first punished with a six-point deduction by the EFL in November 2021 for exceeding allowable losses of over £39 million over three years.
Further penalties followed over the next two seasons for non-payment of wages and breaches of financial rules.
Although decisions are always made by a commission, the EFL has come under criticism for imposing sanctions. Trevor Birch, the EFL’s chief executive, said earlier this month: “To protect the integrity of the competition we need to ensure that all 72 members are treated fairly and consistently on all matters.”
Testing of owners and managers has now become tougher, but that is no consolation for Reading fans.
Despite the deepening crisis, there is hope for a brighter future. Yongge is examining at least three takeover bids and is preparing to grant exclusivity to one group in a deal that could cost around £50 million in total.
There are suggestions of interest from American investors and a party linked to former Bolton Wanderers chairman Ken Anderson, while former Newcastle owner Mike Ashley and Genevra Associates, a Luxembourg-based investment group, have made offers.
Former Reading chief executive Nigel Howe is assisting Yongge in negotiations.
With the club in danger of relegation to the Second League, Yongge is under pressure to make a decision.
“It’s critical that it finds the right buyer,” says Caroline Parker, another spokesperson for ‘Sell Before We Dai’.
“This cannot be a ‘out of the pan and into the fire’ situation. We need a sensible owner who doesn’t play fast and doesn’t follow the rules.
“We call on the EFL to be rigorous in their testing for new owners because this cannot happen again.”
These are still very worrying times, but Reading fans need only think of recent episodes at Birmingham City and Derby to take heart that things can get better.
However, this needs to happen as soon as possible because the future of a 152-year-old club is in danger.