Dave King believes Rangers should be investing in the squad rather than seeking to cut costs.
The former Ibrox director has expressed his concerns that decisions made in the coming weeks will affect the team's ability to compete with Celtic when they eventually return to the top flight.
The Rangers chief executive Graham Wallace is conducting a review of every aspect of Rangers' business. Last week he raised the possibility with the squad of a 15% wage reduction, although the players responded by asking if a similar sacrifice would be made by the club's executives. By Wallace's own admission, though, cuts will need to be made to bring the business back on to an even keel, although he has insisted that administration is not a threat.
King, though, believes that cutting costs now will undermine Rangers' attempts to restore the club to its previous status. The first-team wage budget is 30% of turnover - significantly less than UEFA's recommendations - and there is no scouting set-up, following Neil Murray being removed as head scout last year.
"The CEO has a lot of personal credibility but he is constrained by the funding realities," said King, a South Africa-based businessman. "I believe the club has to have funders who will invest to ensure that we can compete with Celtic when we get back to the SPFL. Unfortunately, our existing shareholders either don't have the money or the willingness to support Ally [McCoist, the manager]. With the right shareholder profile we should be investing in the squad not reducing it. We should be supporting Ally 100%."
King has previously said he would like to lead a new round of fundraising through a fresh share issue. The shareholders would have to reinvest to maintain the relative size of their stake in Rangers International Football Club, so such an initiative would likely change the ownership dynamic. Wallace has said he will address the need for new funding once the business has been streamlined.
King held meetings with Sandy Easdale, the shareholder and member of the Rangers Football Club board, last year in an attempt to broker an agreement that would have allowed him to invest in the club and take up the chairmanship of RIFC plc. He could not reach a compromise deal with the different factions within the shareholder base. He was also keen that Paul Murray should return as a director. Murray was among the four nominees who did not receive enough votes at last December's annual meeting to be elected on to the board. King believes that as well as supporting McCoist, shareholders ought to have been open to working with Murray. "He is a man that all Rangers' fans can completely trust," said King.