Tuesday 6 October 2009

Carson Yeung Failed Hairstylist

Judging by his haircut, it's little wonder Carson Yeung turned his back on being a hairstylist and became a typical Hong Kong tycoon instead. His company controls English Premier League club Birmingham City Football Club.

Kinda makes one wonder why his successful company is called Grandtop International Holdings!

[Carson Yeung was a hairstylist in a previous career.]

Budding tycoon sets sights on big league (SCMP; subscription required)
Former hairstylist has goals for Birmingham City
Neil Gough and Ben Kwok
Oct 05, 2009

Ten years ago, Carson Yeung Ka-shing was a struggling Kowloon hairstylist fending off lawsuits from credit card companies.

But as he arrived last week to meet the press in a conference room at the swanky Island Shangri-La hotel, dressed to the nines in a tailored white suit and a white shirt accented with silver buttons and a collar bar, Yeung, 49, looked every bit the budding billionaire.

Indeed, as his HK$731 million takeover of English Premier League football club Birmingham City nears completion, the once low-profile Yeung appears to have been catapulted firmly into the limelight.

Speculation and rumour about Yeung's background and plans for Birmingham City have abounded since his firm, Grandtop International Holdings, first bought a 29.9 per cent stake in the football club two years ago.

Until now he has held his cards close to his chest, and repeatedly declined to be interviewed for this article. However, a closer examination of Yeung's track record, Birmingham City's business prospects and previous statements by Grandtop executives yields a picture of an ambitious if expensive gamble on China's appetite for football and a test of Yeung's own talent as an entrepreneur.

Not much is known about Yeung's background before he entered the professional football business. Hong Kong companies registry filings dating back to 1991 show him living in a Tsuen Wan flat and list his occupation as a hairstylist. For several years in the 1990s, Yeung operated a hair salon in Tsim Sha Tsui East's Royal Garden Hotel, according to corporate filings and press reports.

Following the 1997-98 Asian financial crisis, however, Yeung appears to have run into financial trouble. In late 1998 and early 1999, several credit card companies and banks, including American Express and Hang Seng Bank (SEHK: 0011, announcements, news) , filed lawsuits seeking to enforce their claims against a modest Mid-Levels flat Yeung bought for HK$5.35 million in 1996, according to Land Registry filings.

The lawsuits appear to have been either settled out of court or dismissed since no judgments were entered into the judiciary's database.

Fast forward 10 years and Yeung today shows every sign of being a wealthy man with an increasingly diversified portfolio of investments. In addition to Grandtop's bid for Birmingham City, Yeung emerged last year as a white knight investor in ailing SMI Publishing Group.

SMI, which publishes the Chinese-language Sing Pao Daily News, was having trouble paying rent and salaries until Yeung stepped in with a HK$60 million bailout loan in April last year that gave him an option to acquire up to a 62 per cent stake in the group.

Yeung, who according to press reports now lives on the Peak and is transported around town in a Maybach, is also listed in companies registry filings as a director of Universal Energy Resources Holdings, Universal Management Consultancy, Universal Properties Group Holdings and Super Promise International. However, little or no additional information is available about these privately held firms.

Asked at last week's press conference about his business interests and background, Yeung said he had several successful investments on the mainland in areas including property, resources, coal mining, gold and water supply.

"Our businesses have gone very well in China," he said. "I'm a work-hard man [sic]."

Part of Yeung's rapid rise from struggling salon stylist to media-to-mining industrialist can be explained by a keen participation in the local stock market.

In 2004, his dealings attracted a reprimand from the Securities and Futures Commission for failing to disclose a holding in Cedar Base Electronic (Group), now known as China Water Affairs Group.

The securities watchdog found that he held 25 per cent of Cedar Base on June 1, 2001, and on four other occasions had interests consisting of more than 20 per cent of the firm.

He pleaded guilty and was fined HK$43,000 and ordered to pay the SFC's investigation costs.

Yeung has also been linked to investments in small-cap Macau casino firms. Sources said he made a significant profit dealing in shares of A-Max Holdings, which bought a 49.9 per cent stake in Macau's Greek Mythology casino in March 2006.

In 2007, he also bought and sold a stake of more than 5 per cent in Kanstar Environmental Paper Products in the space of three months and later that same year he bought and sold a stake of more than 5 per cent stake in Macau casino operator Golden Resorts Group, controlled by Pollyanna Chu Yuet-wah.

Chu's Kingston Securities and Kingston Corporate Finance acted as the underwriter and financial adviser to Grandtop on its deal to raise funds for the purchase of Birmingham City.

Last year's purchase of the stake in troubled SMI appears to have been a break from Yeung's previous investments, several of which followed relatively quick buy-hold-sell patterns.

SMI's shares, which are listed on the Growth Enterprise Market, have been suspended from trading since 2005. The company booked a loss of HK$14.29 million in the final quarter of last year and has delayed reporting results since.

But the acquisition yielded other non-financial returns: Yeung's takeover bid for Birmingham City received prominent coverage in Sing Pao, including a series of glowing articles following last week's press conference that took up the first four pages of the newspaper.

One long-time Sing Pao staffer said Yeung was a frequent sight around the paper's Shau Kei Wan offices and was a "pretty hands-on guy".

Yeung sometimes sits in on editorial meetings and tells senior staff the kind of things that he likes to see in the paper, but overall he is regarded as a good boss by most of the employees. "At least he pays us on time," said the staffer.

It is not clear how Birmingham City will fit into Yeung's burgeoning empire. He is no newcomer to the football scene, having served as chairman of Hong Kong's Rangers football club from 2005 to early 2007.

But a Premier League club is a business of a different calibre entirely, and Grandtop executives have hinted at several potential plans for growing the business and tapping new revenue streams.

Birmingham City booked £49.84 million (HK$612.02 million) in revenue last year and reported a net profit of £2.59 million. However, in the six months to February, the club swung to a net loss of £2.79 million on turnover of £15.61 million.

Like most big football clubs, Birmingham City's business is supported by three main revenue streams: ticket sales, television broadcasting income and sponsorships and merchandising.

Last year, ticket sales accounted for about 42 per cent of total revenue, broadcasting accounted for 38 per cent, and sponsorships and merchandising made up only 20 per cent.

That division of revenue is much more heavily weighted towards the sponsorship and merchandising side at leading clubs such as Manchester United.

Grandtop executives say they aim to bolster Birmingham City's performance in this area, mainly by tapping into the mainland's growing appetite for the "beautiful game".

Signing new players is a stated goal, and observers wonder if some top Chinese players might soon be donning Blues' jerseys.

"With the concept of Greater China in mind, I think that next year significant profit will be brought to the group, and we are not just talking about football," Grandtop chief executive Vico Hui said last month.

"I'm sure that the income from entertainment and other segments will be very significant and I will give you good news next year."

Moreover, Birmingham City's healthy balance sheet and physical presence in England's second-largest city may offer other profit potential - perhaps as a property play.

"First, this football club is free of debt," Yeung said last week after being asked why he pursued the acquisition. "Secondly, the football club owns its own stadium, so in the future we can incorporate some commercial elements."

Still, the details of how Yeung plans to go about selling Birmingham City to the Chinese market remain largely unknown except to him and his top executives.

And for now, no one is giving away anything more than vague clues.

"Regarding the plans for Greater China, it's too early to confirm every little bit now," chief operating officer Sammy Yu said last month.

"Manchester United, Chelsea, Liverpool - all these successful teams have given us a very good example. We will learn from them. We are not geniuses but we will learn."

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