West Bromwich Albion owner Guochuan Lai has explained the reason for his failure to repay the debt he incurred according to the Express & Star.
Albion’s Chinese owner inherited the debt from Peace in the 2016 takeover and it has remained on club accounts ever since.
Chief executive Mark Jenkins has since requested for the debt to be repaid as finances become ever more tight at the Hawthorns after failing to win promotion last season.
Guochuan Lai has acknowledged that the debt needs to be repaid however in response said he could not repay it at the moment because of government restrictions specifically on sports related investments in his native China.
The debt, which was originally worth £3.7m is accruing interest at a rate that is around five per cent. Although the formal request to the owner has been made, repayment is not thought to be at a crucial stage as there is the possibility for Jenkins to take out a loan should he need to at a lower interest rate.
Jenkins has subsequently wrote to Lai after losing out on the race for promotion in order to ask Lai what he intends to do about the debt, but the owner claims restrictions from his native China is currently stopping him from repaying the money.
As is stated by the club accounts, there is no fixed date for the debt to be repaid however the longer this issue continues the more tension which could be created within the club’s hierarchy.
There is currently no suggestion of friction between Jenkins and Lai although this could change if the situation becomes more fractious.
Lai bought an 88 per cent majority stake in Albion from Jeremy Peace in 2016 for £200m during a record year of Chinese investment overseas.
But a year later, the Chinese government clamped down on overseas investment in sport and entertainment industries.
With another season in the Championship beckoning, this is a situation which needs sorting sooner rather than later.
