RANGERS have admitted they have to have a better working relationship with Sports Direct despite concerns about contracts entered into with Mike Ashley's companies and previous club regimes.
The latest half-yearly accounts reveal new warnings from the club's 'independent reporting accountants' over whether it can continue as a going concern, despite the new board setting out plans for future investment and finance.
They also showed that Rangers will have to pay half a million pounds to Newcastle United, owned by Ashley, if they are promoted to the Scottish Premier League because of a clause in the deal that saw five players move to Ibrox on loan from the English Premier League club.
The deal was struck by Derek Llambias, the former managing director of Newcastle, who became chief executive last year and was removed from power following a shareholders' meeting led by South-African-based businessman Dave King.
The first half-year accounts produced by the new board of Rangers International Football Club plc raise further questions over Ashley's hold over the merchandising arm Rangers Retail, which got tighter after he became the "ultimate controlling party" as a result of a £5 million loan from Sports Direct to the club in October last year.
A £395,000 provision was made in the club's finances which in part recognised an obligation of Rangers Retail to "purchase stock at a cost higher than its resale value" for the 2013/14 season.
The new plc figures show that as working capital continues to be at issue, as of the end of December, there was £3.2m "relating to Rangers Retail" included within the £3.33m cash balances which was "not immediately available as working capital to the group".
The accounts also confirm formally that Sports Direct are entitled to two representatives on the RIFC plc board for the duration of the £5m loan.
The board also said that during the half year up to December 31, the group paid £54,000 to Keith Bishop Associates, "a company of which the former director Derek Llambias was also a director".
Interim plc chairman Paul Murray said: "Our focus must be on doing everything necessary to guarantee an exciting, vibrant and much more successful future and we will also be working towards creating better working relationships with all our commercial partners, including Sports Direct.
"We are in the process of engaging with them because they are a large shareholder as well as being our key commercial partner."
Andy Kerr, president of the Rangers Supporters Assembly, said: "There is a repeated question, where has the money gone, that's what the ordinary guy keeps saying."
The plc said that they appointed London-based accountants Jeffreys Henry to act as independent reporting accountants after discovering that the existing auditor Deloitte had resigned following the June 2014 audit. Mr Murray said the previous board "chose not to announce this nor did they find a replacement".
The board said the financial statements were made on a "going concern basis", saying it was investigating a "number of options" for future finance and have identified a number of potential investors.
Early indications from existing "significant shareholders" were that there would be "positive support" for a rights issue in the summer "and this is the mechanism by which interested parties wish to inject funds into the company".
The board said it remained "confident that work in the first weeks of their tenure will generate the investment required to both fund working capital and to develop the company, football club and playing squad."
But Jeffreys Henry said there remains "the existence of a material uncertainty which may cast significant doubt about the company's ability to continue as a going concern".
The board also said it was continuing to investigate options regarding replacing the nominated adviser, which acts as a stock market regulator.
It came after Manchester-based WH Ireland quit as the club's stock market nominated adviser (Nomad). That led to shares in the holding company Rangers International Football Club plc being suspended from trading on the Aim stock market on March 4.
An Aim stock market spokesman said that if they do not replace the Nomad by 6pm tomorrow then the plc will face the ignominy of being delisted from the stock market. That would make raising money through a rights issue complicated and mean that shareholders could only buy and sell their shares privately.
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