Dave King will step down as chairman of Rangers in the new year after four-and-a-half years at the helm – leaving questions over how the club will be funded in the future.

At Rangers’ AGM, the club’s biggest shareholder revealed issues with his own attempts to invest in it, blaming South African authorities, while announcing there was “no longer” a need to continue with what he described as an “ad hoc funding approach”.

Describing his time as chairman as the “biggest privilege” of his professional life, he also insisted the club was “the best financially and operationally that it’s been” since he first became involved 20 years ago.

The South Africa-based businessman, who was one of the leading figures in taking control of Rangers from Sport Direct’s Mike Ashley in 2015, announced there would be a new round of funding through another share issue, after which he will step down from the board.

READ MORE: Dave King: Triumphs and tribulations of Ibrox club’s saviour

The Rangers International Football Club plc was predicted to require £10 million by way of “debt or equity funding” by the end of this season while announcing an annual loss of £11.3m.

The Herald:

The 64-year-old entrepreneur pointed out that, in the last three years alone, they have invested more than £30m in the playing squad and that was “by far” the largest contributor to the club’s losses.

“I would not step down if the club continued to need my services and support. But it doesn’t,” Mr King assured shareholders.

He will continue to support the club as a shareholder.

Speaking to Rangers TV, Mr King added: “It’s the best financially and operationally that it’s been since I first got involved 20 years ago. I think we’re in a really good place right now.

“Despite the personal trials and tribulations, I want to state that being the chairman of Rangers has been, by far, the greatest privilege of my business life and I will continue to use my shareholding influence to support the club and its board.

“I have stated in public many times before, being chairman of Rangers is not an experience I have been able to enjoy. It always remained a duty.

“I now look forward to paying more attention to my South African and international businesses and to finally having the time to work with my children in the manner I had intended before my duty to Rangers put that plan on the backburner.”

In the latest accounts, which include reports by Mr King and the club’s auditors, the Castlemilk-born Rangers fan’s Laird Investments company was quoted as providing loan facilities to meet a predicted shortfall in funding for this financial year “and further amounts that may be required”.

It agreed to provide a £5m facility to October 2021.

Mr King’s report also admits that “uncertainty over the level of additional funds that will be required and a lack of a binding debt facility indicate that a material uncertainty exists which may cast doubt over the group’s ability to continue as a going concern...”

Rangers’ auditors, Campbell Dallas Audit Services, echoes this, saying the risk of key cash flows not being achieved as forecast, along with the absence of a binding debt facility for any shortfalls, “indicate that a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern”.

However, Mr King also said that his report was prepared on a “going concern” basis and that the board believed there is a “reasonable expectation” it will “at all times” have adequate resources to continue in operation for the foreseeable future.

Rangers Supporters Association general secretary Claire Wallace hailed Mr King’s role in putting the club on an even footing.

She said: “He obviously feels he has left the club in a position where he is able let someone else take the chair. There is going to be a share issue next year, and I would like to think there would be investment as well as that. If that happens it can only be a good thing for us.”

It is understood an interim chairman is likely to be appointed until the end of the season.

One of the favourites is Douglas Park, head of Park’s Motor Group, who has a 14% stake in Rangers and has been a principal source of soft loans that has supported the club.

The Herald:

Also in the frame is Hong Kong-based investor Julian Wolhardt (above), whose arrival at Rangers two years ago was described as “exciting” for the club.

ANALYSIS: King’s place in Ibrox folklore is secure, but has tenure been business success?

When Mr Wolhardt and fans shareholders group Club 1872 each made a £1 million investment in shares in Rangers International Football Club plc, it was described as “a significant milestone for Rangers” and involved buying the equity owned by Mr Ashley.

Mr King, who still retains a 25% stake in the club, accepted that the “lifeblood” of the club was funding and even more so “when we have been running a deficit to play catch-up for the many prior years of underspending”.

Mr King asserted that the previous board “and other parties” agitated with the Takeover Panel to have him excluded from assisting in Rangers’ recovery and created “many personal complications” with exchange control authorities in South Africa that cost him more than a million pounds in wasted legal costs.

And he said that the South African exchange control authorities’ involvement in reviewing what was going on at Rangers had a “subsequent negative impact” on the club.

He said at the year end he had put in an additional £5m to assist with summer transfers, but the South African authorities would not approve a further investment in shares in Rangers and only allowed a loan on an interest-earning basis.

In an emotional address to shareholders, Mr King pointed out: “I have stressed on numerous occasions how uncomfortable it has been for me and my fellow board members to be overseeing the operation of a business that was making ad hoc spending decisions, particularly during transfer windows, and then requesting investors to put up the cash after it was already committed to.”

Mr King said that during media interviews and at each of the last four AGMs he had stressed that the business model “required us to get back to our historical success levels on the pitch”. 

"That was absolutely the only way to create sustainable value for all shareholders while simultaneously meeting the expectations and requirements of our supporters. I also stated that the obvious consequence of our on-field ambition was that your board would have to approve spending significantly in excess of what we earn for an indeterminate period of time while simultaneously ensuring that funding was put in place to allow for this over expenditure.

"Put simply, if we couldn’t secure funding then we couldn’t incur losses and without losses we would be consigned to failure on the pitch.
"But, on the other hand, I am stating the obvious when I say that no company can sustain losses for too long without the risk of financial collapse. The board had the extremely difficult task of strategically directing the right quantum of short to medium term losses that could ensure a return to financial stability in the near future."

He said: "Our ad hoc approach served us well to get to where we are today but we must now look forward with a more balanced and consistent approach to funding. Commencing from the end of this financial year there is no longer a strategic need to incur losses."

Mr King added: "Despite the personal trials and tribulations, I want to state that being the chairman of Rangers has been, by far, the greatest privilege of my business life and I will continue to use my shareholding influence to support the club and its board."