HALF of the £1.2 million that Rangers Football Club has left in cash has been arrested, putting its financial position in fresh peril.
Former Rangers commercial director Imran Ahmad yesterday won a legal argument that there was a real possibility of insolvency for the club's operating company and was awarded an arrestment order to have £620,000 of its working capital set aside.
The dramatic turn of events was played out at the Court of Session in Edinburgh as Mr Ahmad made a third attempt to argue the funds should be ring-fenced to ensure there is a payout if he wins his legal fight over unpaid bonus money. Despite Rangers claiming in court that it was "trading its way out of difficulties", Lord Stewart ruled there was still a risk of insolvency.
Just seven days ago, the board of Rangers International Football Club plc moved to sell off 19.8 million new shares in a bid to raise £3.6m. The club board has already admitted that if the new share take-up is less than the minimum set at 15 million, the offer would be scrapped and "the future of the company will be uncertain".
Yesterday's court decision raised concerns the subsequent erosion of confidence will make the shares offer even less attractive to investors.
Football board director Sandy Easdale earlier this week championed the Newcastle United owner Mike Ashley as the club's potential saviour and invited him to underwrite the share issue needed to stave off financial implosion. The club still owes Mr Easdale and fellow shareholder George Letham much of the £1.5 million loan given in February to tide the club over until season-ticket renewal fees started arriving.
Chris Graham, of the Union of Fans, said: "What is left is not going to be enough to pay the wages at the end of September, without money coming in from this share issue. I have a mixture of anger and worry. Worry over the financial position and anger over the actions of the board in general."
Rangers want to appeal against the decision, claiming the judge has committed a legal error. A hearing to decide whether the appeal should go ahead will be heard on Tuesday.
Alan Summers, QC for Rangers, said the company was not verging on insolvency and talks were at an advanced stage with potential investors.
"I can tell you that the floodlights are back on at Ibrox and are in no danger of being switched off," he said.
"The club has not been in rude health for some time, but the situation is improving. The club is trading its way out of difficulties.
"It is moving upwards through the leagues. The plan is for it to return into the Scottish Premiership and into the promised land of European competition where there is big money to be made through gate money, TV rights and the like."
He said Rangers would always remain an attractive proposition for investors.
A Rangers spokesman said: "Further to the Stock Exchange announcement regarding the court action taken by Imran Ahmad against Rangers, whatever the outcome of the court process, we agree with Judge Lord Stewart when he told the court: 'This does not mean to say that insolvency is an actuality or is going to happen.'
"We remain confident that the Club will be able to continue to operate as normal."
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