DAVE King, Rangers' second-biggest shareholder, has threatened a £20 million legal challenge against former owner Sir David Murray, amid allegations of a lack of financial information about his 12-year-old investment in the club.
The controversial South African businessman is trying to claim back all the money he put into the club in connection with a £53.1 million rights issue introduced 12 years ago, aimed at cutting club debt.
Mr King, in a statement issued yesterday, said he believed liquidation of Rangers was "inevitable" – a move that would make his shareholding, which stood at 11 million shares just after the rights issue, worthless.
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Mr King, a life-long supporter from Castlemilk, Glasgow, who is backing former director Paul Murray's Blue Knights consortium bid to take over the club, said: "I seem to be one of the few people who actually invested cash into the club.
"I have made a claim of £20m on the basis of non-disclosure by the then chairman, David Murray, of Rangers' true financial position as far back as 2000.
"Other shareholders may feel deceived like I do and wish to take similar action. David Murray will no doubt argue to the contrary, and the merits of this will be dealt with in due course in the appropriate forum.
"For present purposes however, I simply want to advise the fans and fellow shareholders that any benefit I receive from my claim will be fully reinvested into the restructured football club.
"I remain 100% committed to Rangers Football Club and will do whatever I can to advance its interests."
A spokesman for the Murray Group said they noted "with some interest and much incredulity" Mr King's press statement.
The spokesman added: "It is difficult to understand his motives, given he has been a director of Rangers Football Club since the year 2000.
"Throughout the period of his directorship, Dave King has attended and participated in regular board meetings, including those approving the annual audited accounts, received board papers quarterly, had full access to the executive management of the club, and been privy to the same detailed financial and commercial information as every other board member.
"In the event that he actually lodges a claim, we would vigorously defend it."
The controversial rights issues in 2000, questioned by Mr King, involved Murray Sports, which was controlled by Sir David, taking up rights through its RFC Investment Holdings subsidiary to the tune of £32.3m.
Of that, £20m was described as new investment from Mr King, invested through his company Ben Nevis Holdings.
As part of the changes Mr King became a non-executive director of the club.
A slice of the new cash was to go to lowering the club's debt levels, which were then standing at about £40m, as a result of investment in new players.
The club said at the time that its main objectives were to continue to improve the quality of the player pool, developing young players through the new Rangers Academy, and to improve Rangers' performance in European competitions, which are significant revenue earners.
Among the investors was ENIC, the sports and investment group that paid around £40m for a 20.2% stake in the club.
Four years later it sold the 11.5 million shares for a fraction of what it paid, selling to Sir David for just £8.7m.
Daniel Levy, the chairman of Tottenham Hotspur and ENIC, resigned as a director of Rangers as a result of the deal.
Mr King, meanwhile, said fans had been "duped" about the takeover funding of the club – referring to the agreement when Ticketus paid £24m to secure the right to sell the club's future season tickets, with part of the cash used by Whyte to complete his take-over last May.
He said: "Immediately upon the acquisition of the club by Craig Whyte (far from being debt-free as was trumpeted by the Murray Group and Craig Whyte at the time) the club was in a much worse economic position than before and had no chance of survival even if we had progressed in Europe."
He added: "I am absolutely satisfied in my mind that (the Murray Group) had no knowledge that the proof of funds supplied by Craig Whyte's attorneys was secured by season ticket sales. I am further satisfied that the Murray Group would not have proceeded with the transaction if the true source of the funds had been disclosed."
Mr King said that while liquidation seemed "inevitable", the club could return to its former glory.
He is backing Paul Murray's consortium bid for the club, which is expected to include representatives of fan groups, who launched a SaveRangers.com website. The fan groups have already met Mr Murray, who was deposed from the board after Whyte's takeover in May, to discuss how they could work together.
Mr King said: "It grieves me to state that it seems inevitable that the footballing institution will survive but the company won't. This will entail many hurdles (that will be overcome) including 'Rangers (2012) Ltd' having to reapply for membership of the SFA etc.
"It is a sad point to have reached, but if managed sensibly, it can result in Rangers returning to its former glory as a football club in the shortest time possible. We must all strive to ensure that an appropriate ownership structure guarantees that this event is never repeated."
The shareholder, who said he intends to remain involved with the club if it is possible under a new ownership structure, added: "We must remember that our footballing friends across the city came very close to the point that we now find ourselves in.
"Scottish football needs a strong Rangers and Celtic – but perhaps in a slightly humbler form."