Deloitte ending with Rangers?

[BEARGER 1,829]

Rangers' beleaguered directors face the possibility that the club auditor, Deloitte, could sever its connection with the club over the next few weeks, following a collapse in the number of season tickets sold.

The Daily Telegraph understands that the international corporate finance and accountancy specialists are unhappy about the latest figures emerging from Ibrox, which show that season ticket sales for Rangers’ Scottish Championship campaign are running at half the level of last year’s take-up for their SPFL League One schedule.

 

In a statement on the Rangers website on Friday, the board confirmed that only 17,000 season tickets have been sold. On March 27, when Deloitte signed off the half year accounts up to the end of 2013 – which showed a £3.5 million loss – the auditors added that “key assumptions” made by the directors included a reckoning of future season ticket sales.

Deloitte noted that this indicated the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern.

 

Despite assurances at the annual general meeting in December from the chief executive, Graham Wallace, that the club could meet its costs until the end of the season, the board subsequently borrowed £1.5 million from shareholder George Letham on the assurance that the sum would be repaid when season ticket sales had yielded the equivalent amount. *However, there has been no notification to the Stock Exchange of any repayment.

 

Instead, leaked reports from a spin doctor formerly employed by the club, confirmed that the board would attempt to raise £8 million through a rights issue later this year.

In a statement on the club website on Friday, the Rangers directors said of the latest season ticket sales total – and the likelihood of a share issue – that “The Board believes that whilst this level of support reduces the potential requirement for short-term financing the Board also notes the strategic objectives that it identified in the Business Review Summary published on 25 April 2014 and the related funding requirements.

“The Board continues to evaluate its plans in this regard and will update the market in due course.”

However, should Deloitte dissociate themselves from Rangers, investor confidence is likely to diminish. Deloitte last night would not comment on any speculation, citing client confidentiality.

 

 

In response to the club statement, the supporters’ umbrella group, the Union of Fans, condemned the directors’ stewardship.

The UoF statement read: “We note the announcement of the Rangers board regarding the season ticket renewal levels for the club this year. It is now obvious that a clear majority of fans have rejected Graham Wallace, Norman Crighton, David Somers, James and Sandy Easdale and their running of the club.

“In any normal business, a board which had been rejected by over 50 per cent of its customers in the space of a few months would be removed. Whilst we do not expect this to happen due to the continued support of anonymous shareholders, who could not care less about Rangers, we would highlight that they have utterly failed to gain crucial trust from fans.

“We do not believe this trust will ever be built without fundamental change at the club. The problem for this board is very simple. The vast majority of fans, even many of those who have renewed, simply do not trust them and likely never will.

 

“The corporate governance at the club also continues to be a cause for grave concern. We would repeat that it is unacceptable for Jack Irvine of Mediahouse to have access to confidential, price sensitive board information through the Easdales and to then leak that information to the press as he did this week.”

J

[the gunslinger 3,366]

No doubt Clark and Whitehouse know an accountant that will make things right.

[Bluedell 5,329]

What a crap article. In the first sentence they state Deloitte could sever ties and then don't give a single reason for it in the rest of the article.

 

Deloitte aren't able to satisfy themselves with going concern? They qualify the accounts. They don't resign.

[pete 2,499]

Well that should be easy BD as we have bought more accountants than players recently.

[chilledbear 16]

What a crap article. In the first sentence they state Deloitte could sever ties and then don't give a single reason for it in the rest of the article.

 

Deloitte aren't able to satisfy themselves with going concern? They qualify the accounts. They don't resign.

 

Can you explain 'qualify the accounts' please ?

[Stimpy 0]

What a crap article. In the first sentence they state Deloitte could sever ties and then don't give a single reason for it in the rest of the article.

 

Deloitte aren't able to satisfy themselves with going concern? They qualify the accounts. They don't resign.

 

Kinda thinking the same but then it could be a chat between Deloitte's and the journo, with the accountant perhaps moaning at the level of cooperation between club and Deloitte's? An article is then produced?

 

I can't see Deloitte's risking their reputation for unreasonable requests from hedge fund puppets.

 

#conspiracyloyal .......at this stage!

[Bluedell 5,329]

Can you explain 'qualify the accounts' please ?

 

When a company issues audited accounts, a report from the auditors is attached. There's a lot of legal jargon in it but basically it says that the accounts "give a true and fair view" and therefore the reader knows that there are no material issues with the accounts.

 

If there was anything of note then the auditors would qualify their accounts by making mention of it. This can be something serious such as "they are unable to say if the accounts give a true and fair view" or something potentially more minor as in the Rangers 2013 accounts when the auditors highlighted the Craig Whyte Sevco case as "uncertain outcome of potential liability".

 

If there were issues in respect of going concern and doubt over the company's ability to continue to trade over the next 12 months then they would qualify the accounts by mentioning it in their audit report. It's not a big deal from their perspective to do so and wouldn't mean that they would walk away from the audit.

 

What would make them walk away would be something like dishonesty from the directors and there's no suggestion that this has been the case (and I know that some will claim that the directors have lied but there's a lot of subjective opinion involved in that and it depends what they've said to the auditors) and therefore I would not expect them to resign.

[Bluedell 5,329]

Kinda thinking the same but then it could be a chat between Deloitte's and the journo, with the accountant perhaps moaning at the level of cooperation between club and Deloitte's? An article is then produced?

 

I can't see Deloitte's risking their reputation for unreasonable requests from hedge fund puppets.

 

#conspiracyloyal .......at this stage!

 

Likewise Deloitte wouldn't risk their reputation by talking to journalists.

 

It's more likely that someone has explained to a journalist that the season ticket shortfall will lead to a qualification in the accounts and the journalist not understanding what that meant.

[ian1964 10,409]

Rangers Union of Fans claim 50% drop in season-ticket sales proves supporters have no faith in board.

 

THE Union of Fans have now given the club one last chance to hand them security over Ibrox and Murray Park in return for the renewal pledges received from their supporters.

 

 

 

AUDITORS Deloitte are refusing to be drawn on the future of Rangers after the club announced a dismal season-ticket take-up.

 

The Ibrox club have told the Stock Exchange they’ve sold “approximately 17,000” season tickets for the new campaign, half the 34,000 they shifted last summer.

 

The Union of Fans, who are involved in a stand-off with the board, have now given the club one last chance to hand them security over Ibrox and Murray Park in return for the renewal pledges received from their supporters.

 

If it is not forthcoming, they will urge fans to support the team only on a game-by-game basis.

 

In March, a warning about Rangers as a going concern was issued by Deloitte unless fans supported the club with season-ticket sales at similar levels to previous years.

 

But, asked for a statement on the latest development, a Deloitte official said: “We do not comment on audit clients so are unable to help.”

 

Rangers have already announced plans to raise up to £8million with a new share placement among existing shareholders.

 

But City of London sources say genuine blue chip backers are in no rush to support the existing regime. Shadowy investors such as Blue Pitch and Margarita may also be restricted in how much they can invest by Stock Exchange rules that would force them to make an offer for the entire shareholding if their stake creeps above 30 per cent.

 

To add to the pressure on the board, alarm bells are also ringing because wealthy fan George Letham has still to be repaid the £1million he loaned the club earlier this year.

 

Rangers must return his money as soon as it becomes available, sparking fears many season-ticket sales so far are concessions or have been bought on a payment plan.

 

Surprisingly, Rangers continue to insist sales so far mean short-term funding is not required. A statement read: “The board can confirm approximately 17,000 season tickets have been renewed. This reduces the potential requirement for short-term financing, particularly given the updated season-ticket pricing structure for the 2014-15 campaign.”

 

However, Union of Fans spokesman Chris Graham said: “In any normal business, a board which had been rejected by over 50 per cent of its customers in the space of a few months would be removed.

 

“We will now make one final attempt to engage with the board and see if they wish to secure the money committed to the Ibrox 1972 fund by providing a legally binding pledge that they will not sell Ibrox or Murray Park.

 

“If they refuse, we will recommend supporting the team on a game-by-game basis only.”

 

http://www.dailyrecord.co.uk/sport/football/football-news/rangers-union-fans-claim-50-3691896

[the gunslinger 3,366]

When a company issues audited accounts, a report from the auditors is attached. There's a lot of legal jargon in it but basically it says that the accounts "give a true and fair view" and therefore the reader knows that there are no material issues with the accounts.

 

If there was anything of note then the auditors would qualify their accounts by making mention of it. This can be something serious such as "they are unable to say if the accounts give a true and fair view" or something potentially more minor as in the Rangers 2013 accounts when the auditors highlighted the Craig Whyte Sevco case as "uncertain outcome of potential liability".

 

If there were issues in respect of going concern and doubt over the company's ability to continue to trade over the next 12 months then they would qualify the accounts by mentioning it in their audit report. It's not a big deal from their perspective to do so and wouldn't mean that they would walk away from the audit.

 

What would make them walk away would be something like dishonesty from the directors and there's no suggestion that this has been the case (and I know that some will claim that the directors have lied but there's a lot of subjective opinion involved in that and it depends what they've said to the auditors) and therefore I would not expect them to resign.

 

Sounds like if they did resign it would be quite a big deal though.