Reading could be thrown out of the English Football League if their owner, Dai Yongge, does not sell the club before 5 April. The Chinese businessman was disqualified as an owner under the league’s owners’ and directors’ test in February, an action made public at commercial court in London on Friday.
During the proceedings, a letter from the EFL was referenced by the lawyer Martin Budworth, who was acting for Dai and Reading, detailing its decision to disqualify Dai. The EFL previously pushed to disqualify Dai after multiple breaches of regulations but was overruled by an independent panel and a financial sanction was imposed.
It is understood the reason for Dai’s disqualification is related to business matters in China and not related to his running of the club. An EFL statement said: “Following its disclosure in open court earlier today, the league can confirm that Mr Yongge has been recently disqualified under the EFL’s owners’ and directors’ test. The disqualification requires Mr Yongge to divest his interests in the club, and in the event that he fails to do so within the agreed timeframe, the league will consider all options available within its regulations to bring the matter to a conclusion.
“The league continues to work closely with Reading FC to progress a sale of the club at the earliest opportunity, in order to end the current uncertainty surrounding its future for its staff, supporters and wider community.”
The EFL granted Reading’s request to extend to 5 April the permitted window to divest his shares. Under league relegations, failure to meet the deadline could result in the League One club being suspended from playing matches. The EFL will determine possible next steps at a board meeting in the week of the deadline.
EFL rules state “the league shall have the power to suspend the club” if a disqualified director “fails to resign and their club fails to ensure their removal from office as required”.
- Download the Guardian app from the iOS App Store on iPhone or the Google Play store on Android by searching for 'The Guardian'.
- If you already have the Guardian app, make sure you’re on the most recent version.
- In the Guardian app, tap the Menu button at the bottom right, then go to Settings (the gear icon), then Notifications.
- Turn on sport notifications.
Reading said in a statement: “Mr Dai remains committed to working with the EFL to sell the club and secure its long-term future.”
The EFL did not disclose Dai’s disqualification in February because it felt doing so could hinder a sale but progress has been slow. Last month Robert Platek, the owner of the Portuguese club Casa Pia, entered a period of exclusivity with the club.
Privately there was a reluctance at the EFL to push for disqualification because of the unknown element of taking such action, until November 2023, when a £50,000 fine was administered.
