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Birmingham City say it is 'business as usual' as parent company goes into receivership

BIRMINGHAM, ENGLAND - MARCH 08:   A general view of St Andrews, Birmingham City
Image: St Andrews: Business as usual at the club

Birmingham City insist the day-to-day running of the club will not be affected and they are not in danger of folding, despite the club's parent company being voluntarily placed into receivership.

Sources close to the club say the move is a way of restructuring the business side of the operation and the Sky Bet Championship side have been keen to emphasise they have kept the Football League up to date with developments.

There have been doubts about how the club has been run for some time now, with the Football League asked to look at the situation after Carson Yeung was arrested in Hong Kong for money laundering in 2011 before being jailed last year.

Since then, the board has been "fractious and inharmonious", leading to the appointment of Ernst and Young Transactions Limited by Birmingham International Holdings (BIHL) to manage the company on a day-to-day basis.

The Football League are yet to confirm whether the parent company being placed into receivership would lead to a points deduction for Gary Rowett’s side.

A club statement read: "The club wishes to reassure its supporters and staff most emphatically that no winding up petition has been filed against the company (BIHL) and that it is therefore not in liquidation.

"The subsidiary (BCFC) can fulfil its obligations as a member club of the Football League and shall continue to maintain a strong dialogue with the board of the Football League on this matter.

"With no apparent resolution to the fractious and inharmonious relations within the management, the majority on the BIHL board decided that it had no other option but to openly and voluntarily request reputable receivers to take over the management of BIHL on its behalf."

A Football League spokesman said: "The League received notification earlier today regarding the appointment of receivers by Birmingham City's holding company.

"We have requested a meeting with the club and the appointed receivers at the earliest opportunity to discuss the matter."

Football finance expert David Bick says Ernst and Young will have to act swiftly to demonstrate there has been no form of insolvency in order to ensure Birmingham are not deducted points.

"What counts here in an insolvency event as it's called, is the opinion of the Football League (who will decide) if the club is unable to discharge all of its obligations under league rules." Bick told Sky Sports News HQ.

"I think the receivers Ernst and Young need to move very quickly to make clear to the Football League that the club is either in some form of insolvency, and if it's not, to clarify that position very quickly indeed.

"Because without doubt if it is deemed that there has been an insolvency event - with the Football League having tightened up their rules in recent years - this will result in a points deduction however unfair that may seem." 

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