Debt issues holding up Shenhua’s Kunming move
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E-mail Shanghai Daily, December 25, 2013
Shanghai Shenhua's intended move to southwest China's Yunnan Province has not been approved yet as some debts have to be cleared and necessary paper work is still pending.
The Shanghai Football Association and the China Football Association said they received applications from Shanghai Shenhua Liansheng FC Co Ltd, the club's managing company, on Monday, with the Chinese Super League side planning to shift its base to Kunming, capital of Yunnan, next season.
In the application, Shenhua said the club encountered financial problems in the middle of last season before a Yunnan-based enterprise bailed it out with a 30 million yuan (US$4.936 million) investment. In return, the club was required to shift to Kunming for the next three years. The application said the structure of the company's shares, as well as the club's name "Shenhua”, which literately means "Shanghai flower”, would remain the same.
The application also included certificates of the company's newly registered branch in Kunming, as well as the Kunming Football Association's approval in accepting Shenhua as a local team.
However, these documents have been deemed not enough.
According to Sui Guoyang, chief secretary of the SFA, the move needs to be approved by the club's board of directors. The approval was not included in the files Shenhua handed over this week. The company has six main shareholders, including its biggest investor, Zhu Jun. Meanwhile, the managing company still has some "debts"to clear, amounting to more than 10 million yuan, including transfer fees Shenhua owes to other clubs.
"If the 'debts' are not cleared, the club won't be given approval to shift its registration city,"Sui insisted.
According to CFA regulations, one company cannot own two CSL teams. If Shenhua's managing company wants to shift the club's base to Kunming, it will have to nullify its registration in Shanghai and then register in Kunming. However, the club's financial deficit will make it tough for the nullification to be completed.
Chinese clubs are required to register at local football associations before December 25 (today) to play in next season's games, with local associations reporting to the CFA before January 15. Shenhua, marking its 20th anniversary this year, had earlier applied to the CFA for a deadline extension, however, the club still needs to clear its financial obstacles within a few weeks.
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