Football Crazy

The Scotsman had an informative piece on the long-running pantomime at Rangers FC where a whole series of unlikely characters are fighting for control of this once proud football club.

Now I don't know any of them, but given Rangers recent history and the club's previous problems with tax avoidance you would have thought that any prospective new owner would have to be squeaky clean. 

Rangers: Dave King’s move faces taxing questions


Rangers fans protest against Mike Ashley and the Ibrox board ahead of the match against Hearts on Friday. Picture: Rob Casey/SNS

By ANDREW SMITH - The Scotsman

THERE was a rare moment of unity between Rangers fans groups and the Scottish Football Association when the governing body blocked Mike Ashley’s proposals to increase his stake in the club last month.

Then, a Union of Fans statement spoke of the SFA having “done the right thing” in observing their rules on dual ownership by refusing to approve the Newcastle United owner’s bid to increase his Rangers stake from around 9 per cent to 29 per cent.

Yet, those same supporters are unlikely to be so taken by the SFA obeying their articles of association should Dave King succeed in his mission to oust the current board. King revealed his intentions on Friday night when he requisitioned an extraordinary general meeting (egm). The South Africa-based businessman, Rangers’ largest single shareholder with a 16 per cent stake, is “confident” he can muster the 50 per cent shareholder support he needs to remove chairman David Somers, James Easdale, Derek Llambias and Barry Leach from their directorship. His plan is to replace them with himself, Paul Murray and John Gilligan. And therein lies the rub.

At an egm, which the current Rangers board could stall for six weeks, King could expect the support of the 20 per cent stake controlled by the Donald Park, George Letham and George Taylor consortium. In addition, he is believed to have the ear of a couple of the hedge funds with a 10 per cent holding between them, while individual supporters whose share totals add up to a further 10 per cent would back his efforts to put the Ibrox club into the hands of supporters.

That is all well and good, and Ashley deserves to be removed because of his callous disregard for the club and its followers in this week’s moves to gain security over Ibrox and Murray Park. The current board maintain this was in return for the £10 million loan Rangers need to see out the season.

But it is important to look beyond Ashley’s game-playing and not forget how we arrived at this point. In the independent inquiry chaired by Lord Nimmo Smith under the auspices of the SFA, the old board were criticised for failing to blow the whistle on Craig Whyte as he sent the club on the road to ruin after taking over in May 2011. King was a member of that board.

And it cannot be forgotten either that the reason King was in no position to buy the assets once the old Rangers had been condemned to liquidation the following summer, and save it from the clutches of Charles Green, was that the Castlemilk-born businessman was then in the midst of a decade-long legal battle with the South African Revenue Service.

He settled last year by pleading guilty to 42 criminal counts of contravening the country’s tax laws, and kept himself out of prison by plea bargaining on almost 300 other charges, which required him to stump up £41m. As far as failing to meet the SFA’s fit and proper person test, King – who lost £20m he invested in the David Murray Rangers era – does so with bells on.

Indeed, it is almost as if the ruling has been written to debar individuals with chequered business careers of King’s ilk. Under section (h) of Article 10.2 that sets out the “considerations” that would be made concerning the board “reserving its discretion” as to whether a person is deemed fit and proper to hold a football directorship, it is stated “[if] he has been convicted within the last ten years of (i) an offence liable to imprisonment of two years or over, (ii) corruption or (iii) fraud.”

King was liable for a stretch longer than two years had he not plea-bargained. Moreover, he is caught in a double bind over the fit and proper person rules. Because what also counts against those seeking to meet the criteria is having “been a director of a club in membership of any National Association within the five-year period preceding such club having undergone an insolvency event”.

King and Paul Murray – who was sacked from the Rangers board immediately after Whyte took over – both fall down on this basis. They simply cannot be granted permission by the SFA to take up directorships in any Rangers board if the governing body stands by their own rules, which were tightened up because they had failed to act over Whyte’s dubious business past.

King constantly puts it out through sympathetic media sources that he is confident the SFA professional game board would wave him through as a Rangers director in the event of gaining a controlling interest. That sounds like bluster, which, as well as the baggage, has led to legitimate questioning of King’s credentials to lead Rangers out of the mire.

At times, though, it must be said he talks a good game. As he did in his statement on Friday in which he claimed that, as well as putting the club on a sound financial footing, a second “important task” would be “to conduct a forensic audit of the management and commercial contracts undertaken over the last few years to determine whether they are truly arm’s length and whether the affairs of the company have been pursued in accordance with the fiduciary obligations of those entrusted with that responsibility”.

King thundered at the end of this declaration of intent that “any malfeasance will be pursued aggressively and transparently”.

For the South African tax authorities, that might read like a sick joke.

In the Money (9 January 2013)

The latest edition of Private Eye has a very interesting article about the complex financial affairs of Rangers Football Club - here's what the Eye had to say.

PLANET FOOTBALL

Rangers

"The Glasgow club is due to return to the stock market this week. Shares in a brand-new parent company, Rangers International FC, have been sold to fans and institutional investors at 70p and will be listed in the AIM market.

Football clubs are rarely stellar investments, whatever their success on the pitch. But some lucky Rangers shareholders are guaranteed to make money. These are the present investors in the new Rangers FC that acquired the old bankrupt club earlier this year from its administrators. Between May and August, some paid just 1p a share for shares in Rangers FC, which were swapped for shares in the listed company ahead of the flotation. Just over 19m shares were issued at 1p and another 2m at 50p (including 1m issued in October), compared with around 12m shares issued at a riskier 99p or 100p.

So who were the lucky investors? They seem to include mainly the inside group around Charles Green, who led the takeover, and his backers, including three mysterious offshore backers who held more than 23 per cent of the club immediately before the flotation: Blue Pitch Holding Trust (4m shares), Margarita Funds Holding Trust (2.6m) and Norne Anstalt (1.2m). Only with the last of these is it known where the entity is registered (Vadux, Liechtenstein). But the prospectus is completely silent on the beneficial owners.

There is a lock-in of at least six months for some investors and 12 months for Green and other directors. But the shares would have to perform very, very badly for those who paid 1p not to have a big result."

Now I'm no expect on share prices, but am I correct in thinking that some investors  have paid up to 100 times more than others - for the price of acquiring just one, single share?

If so, does this mean that the people paying through the nose are the ordinary Rangers fans - while those who have scooped up a real bargain are these mysterious  offshire backers - and certain 'big cheeses' on the inside track?

Whatever the truth of the matter I think that ordinary Rangers fans deserve to know what's going on - after all they are the real backbone of the club.