The Baggies announced this morning they have submitted their accounts to Companies House for the 11-month period which ended on June 30, 2021.
Those accounts will be viewable to the public in full in the coming days.
But in a statement on the club's website, the Baggies confirmed the alarming news Lai has taken significant money out of the club.
The £4,950,000 loan was made in March 2021 – with the money going to Wisdom Smart Corporation Limited, a related party to Lai.
Interest was fixed at £50,000 with the repayment due on September 15 2021. That repayment however was not been made with a new date of December 21, 2022, having now been agreed.
Despite having missed one repayment date, Lai insists the loan will be repaid in December.
"The club’s annual accounts for the 2020/21 season detail a loan to Wisdom Smart Corporation Limited, a related party to me," he said.
"Regrettably, the Covid-19 pandemic saw my international businesses suffer, particularly those in the hospitality and entertainment sector, which experienced an almost complete closure for long periods, and in March 2021 I received a loan from the football club.
“The upturn in the global economy has brought with it greater positivity and I can confirm I will repay the loan in full, with interest, by the end of the current calendar year and the funds will be available to the club during the January 2023 transfer window.
“I am looking forward to an exciting season for Albion and again thank fans for their dedicated support of the football club. I will return to The Hawthorns to watch a game at the earliest opportunity, and I am excited to see the progress the team has made this summer.”
The accounts that will be published in the next few days cover the season Albion spent playing in the Premier League playing behind closed doors.
Turnover increased from £53.7m to £106.9m in the 13-month period which ended on July, 31, 2020, owing to Premier League distributions and sponsorship income.
However, the coronavirus pandemic continued to have a significant impact on the club’s finances, with a total of £13.2m lost due to Covid-19 during the reporting period.
The club played out 18 of its 19 Premier League home fixtures behind closed doors, which resulted in estimated net losses of £7.5m.
Albion spent £30.5m on incoming transfers during the period and received £9.7m from player sales.
Staff costs increased to £76.9m from £66.9m, with the increase predominantly driven by the contractual salary increase for players and staff following promotion to the Premier League.
“I would like to publicly thank club staff and supporters for their ongoing loyalty to the football club after two disappointing seasons," Lai continued.
“I believe we have made positive progress in recent months and the appointment of Ron Gourlay as Chief Executive Officer in February has already strengthened the football club.
"The early acquisitions of John Swift and Jed Wallace provide us with added quality as the club continues to embrace a period of positive change.
“I remain committed to returning the football club to the Premier League and I am confident we will be able to compete for promotion from the Championship this coming season."