The Herald understands that while the South African tycoon has confirmed he wants to return as Ibrox figurehead, Rangers International Football Club plc has been advised that the stock market would question moves for him to be appointed a director.
It is understood the plc has been advised by its stock exchange nominated adviser (Nomad) that it would not recommend Mr King for the board. Nomads are the primary regulators of any company floated on the Aim stock exchange.
At the end of August, Mr King, a director brought in by former owner David Murray, agreed a £43.7 million settlement with the South African tax authorities after criminal charges against him were dropped.
Mr King has dismissed the notion the tax dispute remains an impediment.
Would-be directors of an Aim company must disclose details of any public criticism by statutory or regulatory authorities and whether they have ever been disqualified by a court from acting as a director of a company.
Rangers plc sources believe the South African Revenue Service (Sars) tax case remains a serious obstacle to any proposed return by Mr King to a position of power within Ibrox.
However, the Castlemilk-born executive, who is executive chairman of South African investment company Micromega Holdings Ltd, believes his situation with Sars was not serious enough to prevent him investing or having power within Rangers.
He said: "My settlement with the authorities in South Africa provides me with a unique status of credibility.
"I don't know anyone else on the planet who has the level of clearance that I now have in terms of court-approved rulings."
He added: "I have made all my disclosures to AIM and they can have no basis for anything other than unequivocal support."
City sources are said to have advised there "is absolutely not a hope" Aim would accept Mr King as a director.