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King's intervention empowers support to act against board

Rangers, like any club, rely on season ticket income.

Dave King believes the right investment "will only come from a fan-based group that regard their return as winning trophies in the top flight". Picture: SNS
Dave King believes the right investment "will only come from a fan-based group that regard their return as winning trophies in the top flight". Picture: SNS

The difference between them and others of the same size and stature, though, it that it is the Ibrox team's single most significant revenue stream, at least as they work their way through the lower leagues. Dave King's call for fans to pay their renewal money into a trust fund is, in effect, a call for supporters to try to directly influence decisions made in the boardroom.

The battle for control of the season ticket money is a battle for control of Rangers. King is not calling for a boycott, only for fans to use their influence as the providers of the most important revenue stream to shape the club the way they want it to be.

He has always made it clear he wants to invest in Rangers again, but through a share issue so that his money goes directly into the team. Under this scenario, current shareholders must reinvest or their stakes will be diluted, and King's wealth would essentially see him and a consortium of like-minded fan investors take a controlling stake.

"I do not believe that Rangers should be under the control of one owner/benefactor," King said. "We have seen the damage caused when the club becomes a hostage to the fluctuating whims and wealth of a single owner. I see my role as being the lead investor of a like-minded consortium that will invest in the club, along with the supporters, without the short-sightedness of an immediate return on investment."

It is an impasse that forced King to release a lengthy public statement yesterday. He negotiated with Sandy Easdale, the chairman of Rangers Football Club although not a member of the Rangers International Football Club board, last year. The current RIFC directors are also fully aware of King's wish to invest in a new equity issue, but the South Africa-based businessman, and lifelong Rangers fan, now "no longer believes that I can achieve this with the board that is presently in place".

Having previously insisted that Rangers had sufficient cash reserves to see them through until the end of the season, the board earlier this week agreed to a loan facility of £1.5m from Sandy Easdale and Laxey Partners, the single largest shareholder. The latter will receive a 15% premium, or £150,000 on their £1m loan, payable in cash or shares.

The money repayable to both lenders, on September 1, is secured against Edmiston House and the Albion car park. The loan effectively buys time until season ticket renewal money normally begins to come in during the summer.

King, like other potential investors, cannot buy a controlling stake in the markets without paying over the odds. That is the legacy of the decision of the consortium behind Charles Green to limit shareholders to small holdings. A fair price would reflect the financial state of the club because any owner needs to either invest heavily in the business or downsize it. The current board and King appear to fundamentally disagree on how the club should be run.

King wants to lead a new round of investment to provide funds for the football department and the "dilapidating infrastructure" ahead of next season's likely SPFL Championship campaign. The board want to cut costs in line with the reduced income streams of the lower divisions. For investment, King and others would want influence on how their money is spent, so this is, at its root, a question of who runs Rangers and what kind of club it becomes. King has no desire to bankroll Rangers - he lost £20m under Sir David Murray's stewardship - but wants to lead like-minded fans with money to invest in return for being part of the club's future.

"Such a soft investment will only come from a fan-based group that regard their return as winning trophies in the top flight," he said. "I have been such an investor and want to be so again. I would like to lead a fan-based initiative to acquire an influential shareholding in the club."

Rangers fans have bought season tickets in remarkable numbers during the last two seasons, despite concerns about the way the club was being run by Green then Craig Mather. The current directors are all new, although Sandy Easdale and James Easdale, the RIFC director, had a share purchase agreement with Green - that does not appear to have been concluded - and at last year's agm represented the same shareholders who were behind Green.

Yet with no money left from two tranches of season ticket money - around £16m - and the £22m raised when RIFC were launched on the Alternative Investment Market in December 2012, some fans remain sceptical. The interim financial results due next month are likely to show a drop in losses, but it may be that fans will want to gather behind King and push for fundamental change out of deep-seated anxieties.

"The fans have no proper insight into the owners of the club and who represents which shareholders on the board," King said. "What is known is that the current board members have a very minor stake in the club. Rangers have also developed an extremely un-Rangers like culture of 'turning on their own'. It is not in Rangers culture to have spin-doctors that feed information to the media in an attempt to damage our own players, management, potential investors, and supporters. Much of what has been fed to the media is clearly untrue or exaggerated."

There ought to be no issues with King being considered suitable for a position on the board of an AIM-listed company when the South African Revenue Service believe King to be fit and proper for such a role. King would have to explain his actions while on the board of Rangers under Craig Whyte, but he is confident the Scottish Football Association would accept his case.

It was already clear that season ticket sales might be affected by discontent amongst the fan base. By highlighting the influence of supporters, King has empowered them to act.

"Will the board provide legally binding assurances that the club is a going concern and has sufficient funds and/or facilities in place for the 2014/15 season?" King asked.

"Will the board undertake that none of the proceeds from season ticket sales will be used to settle any financial obligation that arose prior to receipt of the season ticket monies?

"Will the board confirm that the club assets continue to be unencumbered? Will the board explain its previous statements that the club had sufficient cash resources to last until the end of the season?

"At this critical juncture, the fans control the funding that the board are relying on. How we proceed will determine our club's future."

Rangers issued a brief response to King's statement: "The board notes Mr King's comments with concern as they are potentially destabilising and damaging to Rangers Football Club.

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