• Text size      
  • Send this article to a friend
  • Print this article

New Celtic team takes over. Three directors ousted as #17.8m rescue package pledged. The new team takes over with a promise

A new regime was

installed late last night at Celtic after the extraordinary boardroom coup. It broke a century of control for one family, but promised to restore the club to former glories.

Loading article content

Scots-Canadian Fergus McCann and Glasgow businesman Brian Dempsey, who head the takeover consortium, however, warned that no magical wand exists and that supporters must be patient: the depth of the club's deep-rooted problems has still to be fully plumbed.

They argued Celtic's financial plight was such that they had moved to prevent the club from collapse, and would require time to take prudent rather than rash decisions on the way ahead.

Vice-chairman David Smith; club secretary and largest shareholder Chris White; and director Michael Kelly have been ousted -- their 23% shares in the club sold to the rebel group, bringing to a close a long and acrimonious power struggle.

The departure of Mr White, son of former chairman, the late Desmond White, means one of the three family dynasties which have ruled over Celtic for 106 years has gone.

The takeover was officially confirmed at 10.45 last night, some 13 hours after the seven-strong board was called to an emergency meeting because of a 24-hour deadline set by the club's bankers to resolve its perilous financial position.

The Bank of Scotland had threatened receivership unless action to reduce the reputed #9m overdraft was taken.

Club chairman Kevin Kelly, who has retained his position, announced all matters have been resolved, including the three resignations. He thanked them for their contributions made to the club over the years.

Mr Kelly, cousin of ousted Michael, said he had no problems with working with the new board. He denied there was any split in the family, and added: ''There has to be a way forward and a new era. This is what happened.''

Mr McCann, the new chief executive, now has at least 50% control, but reiterated an earlier promise to relinquish such power within five years.

Along with Mr Dempsey, he warned he would be a hard task master because they were not men with small ambitions.

Sources told The Herald that the ousted directors will each receive #100 a share -- that is #200 a share less than offered last month by another rebel pact not involved in yesterday's deal.

It means Mr White, who has 14.25% of the club's shareholding, will receive nearly #300,000 compared with almost #900,000 if he had quit earlier.

Mr Smith and Mr Michael Kelly respectively walk out with #95,300 and #66,500 -- a victory for the Dempsey-McCann consortium, who have always insisted outgoing directors should not profit ''from failure''.

Mr Dempsey, who intervened on Thursday night to pull Celtic back from the brink of receivership with an immediate pledge of #1m to the bank, emphasised that no overnight change in club fortunes will occur.

He said: ''We did not have the luxury to meander through issues that have caused concern at Celtic. The issue was to keep Celtic alive, and the answer was yes.''

The new board's immediate role was to demonstrate to fans that new opportunities and a new future exist.

Mr McCann agreed; time was needed to analyse the position, and he admitted that no money for the playing side will be immediately available.

However, he stressed the club's financial predicament has been resolved: ''The club is now in safe hands and the financial position of the club is now secure.''

Mr McCann -- who described yesterday's events as a ''complete and utter victory -- confirmed his original #17.8m rescue package rejected by the old regime last year still stands.

It would appear about #8m of his own money will be put into the club, with much of the rest raised via a restructuring including a shares issue aimed at supporters. The package will be put to a shareholders' egm to be called soon.

He will take over as club chief executive on Monday, and expects to move to Scotland soon afterwards.

Mr McCann said: ''My message to the fans is sympathy and appreciation. They have tolerated so much and put up with a terrible situation for so long. I would urge them to get behind the club again and morale will quickly rise.''

He said he was prepared to talk to millionaire businessman Gerald Weisfeld with a view to encouraging him to investing in the Parkhead club. Mr Weisfeld failed in a bid last month to oust five directors by offering them #300 a share.

Mr Dempsey will not have a seat on the new board, despite launching his power struggle when ousted after six months in 1990.

He claimed subsequent actions were not personally motivated, but based on a desire to restore Celtic's fortunes.

Surprisingly, Mr Dempsey did not rule out a move to Cambuslang; he said everything connected with the club is only subject of review.

Asked whether the job of manager, Lou Macari, was on the line, Mr Dempsey said: ''That doesn't come into question at this time.''

There was a delay over an official announcement of the new board as lawyers examined the small print of the coup.

This was to ensure the transfer of power was watertight and could not be challenged at a later date by ousted directors.

Mr Kevin Kelly remains as chairman, with directors Tom Grant, James Farrell, and Jack McGinn also staying on the board despite complaints from some Celtic fans that they should have known about the club's declining fortunes.

Also co-opted on to the board will be former Edinburgh banker Dominic Keane, long associated with the rebel faction.

The board has been reduced in size from seven to six. That may suggest a place is being held for Mr Weisfeld, the former owner of the What Everyone Wants chain.

Mr Smith, who joined the board in February 1990, was appointed deputy chairman because of his business acumen and City contacts.

However, not only did he preside over alarming losses, his ''visionary package'' launched a week ago to relocate Celtic Park in Cambuslang and float the business was ridiculed by the media and, even worse, the club's bank was not prepared to go along with it.

Mr Smith, when he flew in from London where he works, had said he would not resign. But a spokesman for Mr Smith acknowledged defeat when he said: ''He has no more rabbits to pull out of the hat.''

The official, who also speaks for Mr Patrick Nally, of StadiVarios, the company charged with raising finance for the Cambuslang project, said he was shocked by the turn of events that jeopardised the scheme, one of six in the UK involving Superstadia Ltd for sporting arenas.

Former Lord Provost Michael Kelly's removal coincided with his Glasgow public relations firm losing one of its most important clients -- Celtic.

None of the ousted directors would comment yesterday, and they were still locked in talks with financial and legal advisers last night.

Negotiations with the trio lasted all day after an emergency board meeting was called.

Messrs Kelly, Grant, Farrell, and McGinn had been told the club was in ''immediate and dire peril'' of being put into receivership. They were given 24 hours to pledge all their shares and proxies against the mounting overdraft, and sought an accommodation with the McCann-Dempsey consortium. It has already pledged #1m, with #5m to follow on Wednesday.

The final straw for the bank was the revelation that only a conditional agreement, in principle, to provide guarantees of up to #20m towards construction costs of a #50m Cambuslang stadium was in place.

The new regime is likely to remain at Parkhead, where money will be made available to make Celtic Park an all-seater stadium.

Mr Smith's grandiose plan to relocate Celtic collapsed after a spokesman for little known Geneva-based merchant banker, Gefinor, denied it had any involvement in the project.

Directors arrived at Celtic Park up to an hour early for the scheduled 10am board meeting.

Shortly after 2pm, Celtic's new saviour arrived. However, it is doubtful whether the slightly built Canadian-based tycoon expected quite such a welcome.

His arrival sparked a frenzied response from the group of about 100 fans, who had been camped outside the stadium. They immediately broke into song.

Despite the icy wind and rain, the numbers outside the stadium continued to swell.

There was a further flurry of excitement just after 4pm when Mr McGinn left the stadium via a rear door and into a waiting car which sped off.

His sudden departure aroused speculation that he, too, had been ousted but it was later revealed that his departure was due to UEFA commitments in Geneva.

The growing unease among the fans was appeased an hour later when new director, Dominic Keane, came outside.

Mr Keane delighted his captive audience by predicting a swift return to the glory days. ''I am absolutely confident that under Brian and Fergus Celtic can only go one way and that's to the top.

''It will all fall together and bring Celtic back to the great days, not only in Scotland but Europe.''

The director remained optimistic that his financial acumen gleaned from more than 21 years in the banking world would prove invaluable in improving Celtic's standing within the business community.

Earlier Matt McGlone, who spearheaded the Celts for Change campaign, said that he was absolutely ecstatic by the day's developments. In fact, he went as far as to say it was the best day in his life.

He described the ousting of the three board members as a victory for every Celtic fan although he voiced regret that there was not a ''clean sweep''.

''There can be no respect for the board members who have remained.''

The Celtic for Change campaign had booked the City Halls in Candleriggs, Glasgow, for a rally on Monday night with Mr Dempsey and Mr McCann invited to speak. This event, Mr McGlone said, would now become a victory rally.''

Earlier, Celtic player Charlie Nicholas warned fans not to expect miracles overnight.

Speaking after training, he said: ''There is no guarantee for immediate success. However there is certainly more hope with a man like Brian Dempsey heavily involved.''

Continued on page 8

Continued from page 1

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis.
If you're a relatively new user then your comments will be reviewed before publication and if we know you well and trust you then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

PARCH1.717089