EFL tells Reading FC owner to fund or sell club

Following Reading’s League One match against Port Vale on Saturday at the Select Car Leasing Stadium, which was halted after 16 minutes, and then abandoned after around 1,000 home fans invaded the pitch to protest against the ownership of Chinese businessman and entrepreneur Dai Yongge, the English Football League (EFL) issued a statement which called on Mr Dai to fund the club adequately or sell up.

The EFL's statement said that it has in recent months become increasingly clear that Dai Yongge is no longer in a position - or does not have the motivation - to support the Club financially as he did following the change of control in 2017.     

Mr Dai is the former owner of Chinese football club Beijing Renhe (which closed in 2021). According to reports he is currently the executive chairman of Renhe Commercial Holdings Company Limited, a listed investment holding company which operation of shopping centres transformed from air-raid shelters.

In November 2023, the EFL called for the disqualification of Mr Yongge following the failure to fund the deposit account to cover player and staff salaries following repeated breaches of EFL Regulations. This was ultimately rejected by an Independent Disciplinary Commission and a financial sanction was imposed instead.   

But the businessman did not meet last Friday’s latest deadline to fund the deposit account as ordered, meaning he has been in default for nearly four months.  As a result a further £50,000 fine has now been imposed, taking the total to £80,000.   

The EFL statement said: "His continued failings mean that once again the Club's hardworking staff have no reassurance as to payment of wages and demonstrates a clear disregard for his obligations as a director of the Club.   

"In respect of this issue, the League will now consider all available options it has under the Regulations and will have no hesitation in bringing further charges against Mr Dai."

The EFL is now urging Mr Dai either to fund the Club adequately or to make immediate arrangements to sell his majority shareholding to appropriate new owners.

 The EFL added: "We will work with Mr Dai, his team and the Club plus any potential purchaser to navigate and meet the requirements of the Regulations as quickly as is physically possible and bring an end to this difficult period for all parties."

Speaking during a Culture, Media and Sport Committee meeting earlier today, Rick Parry Chair of the English Football League, said: "We need to change the system. We have a succession of boom and bust owners who come in and throw money [at the club], doesn't work and they walk away. We share the fans concern, we really do. Reading has fallen foul of our profit and sustainability rules and has suffered the punishments. To be fair to them they came clean and acknowledged the problem.

"Just before Christmas we took action against the owner, not the club, in an attempt to get him disqualified, but he was fined instead. We are meeting fan groups this afternoon and we want a resolution to the problem, and we want a new owner. We are not in a position where we can easily force him to divest the club."

"It is a complex situation. We have the power potentially to disqualify the owner. What we don't have the power to do is to force a sale."

Our sources say that this would likely see Dai Yongge banned from being a relevant person associated with Reading FC and any other football activity. This would then give him 28 days to divest his shares in the club.

While this doesn't force a sale, breaching the regulations and bringing the threat of further sanctions would reduce the value of the club in the eyes of potential investors.

Other consequences could include the club being suspended, however this is only one of a number of options.

While there are some similarities between this process and that of a director of a business being disqualified, they are two separate processes.