c/o 1st Floor
15 June 1999
West Bromwich Albion plc
Further to my letter to Shareholders of 26 May 1999, you should now have received from the Club the notice of the extraordinary general meeting which has been called to allow Shareholders to decide whether they wish Mr Hale to continue as Chairman or not.
The notice of the EGM contains a letter (the "Directors' Letter") from Mr Brandrick, Mr Wile and Mr Colston. Although this letter contains little of real substance certain matters should be considered by Shareholders in response to the letter.
So-called Independent Directors
Mr Brandrick, Mr Wile and Mr Colston are described as "Independent Directors" but only Mr Brandrick really fits that description.
Mr Colston is an overseas Director who was put on the Board on 23 March 1999 by Mr Hale. Mr Colston has no personal knowledge of the way in which the Club has been run during the five years that Mr Hale has been Chairman.
Mr Wile is a full-time employee of the Club. As Chief Executive he is paid to implement the policy of the Board and he will always do that to the best of his ability with the professionalism and integrity which he has shown throughout his career. However, as a full-time employee of the Club, he cannot be regarded as independent.
Shareholders are therefore effectively being asked to support Mr Brandrick in supporting Mr Hale.
Perilous League Position
The Directors' Letter states that the Club's league position was perilous when Mr Hale became Chairman in 1994. However, this perilous position continued during Mr Hale's chairmanship. In 1995 the Club fmished 19th in the league and when I came to the Club, it was in 23rd position in the league under serious threat of relegation to the second division.
Prior to the transfer deadline date in 1996, I loaned £500,000 to the Club on an interest-free, unsecured basis, which allowed the Club to purchase Richard Sneekes and the Club moved up the league to finish in 11th position.
Despite Shareholders providing £4.5 million of new funds in May 1996, which has mainly been spent on players, our league position has got no better with subsequent finishes in 16th, 1Oth and 12th positions.
Perilous Financial Position
The Directors' Letter states that the Club's financial position was perilous when Mr Hale became Chairman in 1994. The loss before taxation for the year ended 31 May 1994 was £476,268. However, this perilous position continued during Mr Hale's chairmanship and in the year to 31 May 1995 the loss before taxation increased to £488,604.
Despite Shareholders providing £4.5 million of new funds in May 1996, which led to improved financial performances for a while, a large part of those funds has been wasted and the Club has returned under Mr Hale's chairmanship to even larger losses.
In the half year to 31 December 1998 the loss before taxation was £882,000. Prior to the vote at the EGM, Shareholders need to be told what the total loss before taxation is going to be for the full year to June 1999. Will it be less than £2,000,000? We are in a very poor situation off the field and this is why no new players have been brought to the Club for almost a year.
Meetings at the Moat House
Around 400 Shareholders attended the discussion meetings at the Moat House on 7 and 8 June. A large number of Shareholders contributed to the debate and I would like to thank them for their ideas, views and contribution.
There was a yearning for progress and success and a general agreement that the last five years have been very disappointing.
Many questions were asked, many myths were dispelled and mis-information was corrected. In particular, I was asked to write to Shareholders to make clear the fact that I have never been a Director of any other football club and that I have never been involved in another club other than an amateur club which I started at the age of 17, and which I played for on Saturday afternoons until I was 30 years old. West Bromwich Albion is the only professional club to which I have made a commitment and I am totally committed to the success of West Bromwich Albion.
Rights Issue in May 1996
Shareholders will find it interesting that the Directors' Letter does not mention the rights issue in May 1996 when I underwrote the issue and we together raised a total of £4.5 million which included £2 million of my own money.
When I first came to the Club in December 1995, the Club was 23rd in the league and under serious threat of relegation to the second division. The Club was losing money (£489,000 loss in the year to June 1995) and the Club was strapped for cash having spent only a net £145,000 on players in the 21 months to January 1996. In short, while Mr Hale was Chairman, before I arrived, the Club was struggling.
Unfortunately, Mr Hale has to take responsibility for the waste of money which has occurred since the May 1996 rights issue, particularly in the transfer market. It is inappropriate to comment on players currently at the Club, but the £875,000 lost on the transfers of Paul Groves, Paul Crichton and Sean Murphy demonstrate the huge losses incurred in the transfer market over the past few years.
Your vote is important
We now need a new Chairman who will put in place a three year plan after consultation with Shareholders and Supporters. We need to finance the plan and we need to re-create hope and belief around the Club.
I hope that every Shareholder will bring positive change and a new start to the Club by voting to remove Mr Hale as Chairman.
The notice of the EGM does not make it clear to Shareholders that Shareholders can only remove Mr Hale as Chairman by removing him as a Director.
Therefore if you wish to remove Mr Hale as Chairman you should vote for the resolution by putting an X in the "For" box in the following way:
|Ordinary resolution to remove the Chairman,|
Mr A B Hale as a Director of the Company