11 September 2014

The Dangerous Game

by Graham Taylor | Guest Contributor

Crunch time.

In just under 24 hours’ time, we should have some clarity as to how long the stricken Rangers International Football Club plc can limp along for. If the Open Offer of shares is fully subscribed, Rangers should have enough to get them to the 2014 AGM where a motion will be tabled to disapply the pre-emption rights which were voted down at the previous year’s meeting, allowing for a far larger tranche of shares to be released. If not then the club, simply put, won’t have the funds to pay its way, leaving the financing options available limited and likely to the long-term detriment of the club.

Given the revelations of recent times, there can be little doubt now that Rangers have been run for the benefit of a relative minority of shareholders since the trauma of insolvency in 2012. The numerous contracts and agreements entered into since those days have been the subject of much rumour and speculation for some time, but only recently have they started to come to prominence now that the club has reached a critical juncture. It is clear through the management acting on behalf of a few individuals, Rangers’ ability to generate revenues to sustain itself has been severely and critically reduced and has made the club a less-than-attractive proposition for would-be investors who would view the club as a viable commercial proposition.

In the absence of commercial investors, high net-worth fan investors are the most viable alternative. One name is constant and is one would invest for all the right reasons. Dave King is the man that the majority of fans have put their faith in, rightly or wrongly, to come to the club’s rescue. Some say he has disappeared; others say he is playing the long game. King himself said that the prospect of gaining control would ultimately be a “business transaction” and not one that would be fuelled by emotion, regardless of his feelings for Rangers. His position has been consistent in that he will only invest in new shares as it is Rangers that are in desperate need of cash. He is also the only individual to ever publicly say that he would invest in Rangers. So why haven’t the club welcomed him with open arms when we are once again staring into the financial abyss?

Something that is often alluded to but hardly ever spelt out is this – club director Sandy Easdale will not entertain the notion of allowing Dave King to invest directly into Rangers because Dave King will not entertain the notion of allowing Sandy Easdale to remain on whatever board he is supposed to be on if he were to assume control. It is that simple.

Easdale’s influence, through his shareholding proxies and his own relatively minor shareholding, is generally considered to be corrosive to the best interests of Rangers. And yet, he has more of a say in how the club is run than the man paid handsomely to lead the plc, Graham Wallace. 

Would Dave King allow that to remain the case if he stays true and invests his mooted £30 million? Not a chance, so Easdale will do whatever it takes to keep King at bay. And even though he went as far as to say in his Q&A with Keith Jackson that he would be happy to work alongside King on the board, the truth is neither wants the other anywhere near the club. Would Easdale’s stance on King remain if it meant the possibility of inflicting long-term damage on Rangers through having to secure financing against assets? On the evidence so far, yes.

King, however, is playing a very dangerous game and one that could see the club slip away from him, and what many of us believe to be the true Rangers, forever. There has been an attempt in recent days to portray the battle for control of Rangers as a tussle between two parties – Mike Ashley and King. Ashley’s involvement in a future share issue has been promoted by those connected to the club, but it has also been said that he is simply protecting his commercial interests with the club. His retail contract with the club has been described as a ‘licence to print money’ for his sportswear firm Sports Direct, therefore it’s not something that he is likely to give up without a fight.

Perhaps the most revealing aspect of recent times was the arrival of the Malaysian businessman Datuk Faizoull Bin Ahmad. It wasn’t so much the arrival of Bin Ahmad that was revealing, it was more who he was travelling with – convicted fraudster Rafat Rizvi, who was spotted laughing and joking with Sandy Easdale. Unfortunate as it was for Easdale to be photographed with Rizvi, a man long since speculated as to having an influence in the running of the club, it further evidenced that those currently in control are not about to let it slip from their grasp easily. And that it is not a given that King will get his opportunity to invest, even if the approaching iceberg moves sharply into focus.

The possible further release of shares at what is likely to be an even stormier AGM than that of the incredibly hostile 2013 edition, should, on the face of it, finally enable the release of Rangers from the clutches of the small clique that have been running the club for the last two years. But given that this group form part of the 26% proxy vote held by Sandy Easdale and the resolution needing 75% approval, it is also entirely possible that they could choose to vote down the release of further shares if they feel that their position of control is severely threatened. If this group feels that their interests would be better served by initiating an insolvency event and restructuring the cost-base by that route, with the added advantage of retaining control, then it seems likely that this is an option that they would seriously consider.

There is also a high probability that motions will be put forward to once again remove some, if not all of the current directors at the AGM. Given how the newly-constructed board scraped through by the skin of their teeth last year and the lack of any meaningful progress since, they will be unlikely to find such favour with the institutions this time around. Add in the rumours of King having been active in London and you have the perfect storm building up for the weeks ahead where the destiny of Rangers will be decided.

And where does it leave us – the fans, who’ve suffered as the club has been pillaged for far longer than anyone thought possible? We’re merely an afterthought in rich (and in certain cases, not-so rich) men’s games…