Jump to content



Rangers International Football Club plc - Is it breaching the Companies Act?

Recommended Posts

Rangers International Football Club plc - Is it breaching the Companies Act? Is its Nomad a cretin or worse?


Rangers (RFC) has announced agreements with SportsDirect for the provision of a £5 million credit facility, with a further £5 million available “subject to due diligence by SportsDirect prior to drawn down”. However, with the company having admitted to “a number of options”, the deal now announced has been criticised as not being in the company’s best interests… We really question whether it breaches section 994 of the 2006 Companies Act. We shall be contacting AIM Regulation asking for a formal investigation. Since they are chocolate teapots, we will also be contacting the Scottish FA asking it to launch a formal probe as it appears a watchdog with some teeth.


In particular, for the duration of the initial facility, SportsDirect will have transferred to it 26% of Rangers Retail Ltd (a retail joint venture which in the period ending 27th April 2014 made a pre-tax profit of £1.17 million and which from the 2017/8 season will incorporate any future shirt sponsorship proceeds). A consortium with a 20% shareholding in Rangers and which offered a rival £6.5 million facility noted that the agreement now announced “equates to an annual interest rate significantly higher than our offer and probably in double digits”. Additionally, it added that;


“Security for the SportsDirect facility involves the club's registered trademarks and a floating charge over the club's assets. This is disadvantageous to the club compared to the security required under our offer. We fail to see how the SportsDirect facility can be described as better for the club than the funding offer we made. It isn't and should not have been accepted if the best interests of all the shareholders were considered. Acceptance of the SportsDirect facility will do nothing to repair relationships with the fans which is critical in improving the revenue streams of the club.”


The consortium also noted that it was “advised by Derek Llambias (CEO) that our funding offer would be difficult for the board to accept if we did not provide irrevocable undertakings to vote against General Meeting resolutions to remove certain existing board members. We felt this was completely inappropriate and advised that our current funding offer was not affected by the GM process”.


Sports Direct founder and majority shareholder Mike Ashley has already had rejected by the Scottish Football Association an attempt to raise his shareholding in Rangers to 10%+ while he remains the owner of Newcastle United, but still has Llambias (previously MD of Newcastle) and Barry Leach (previously of Sports Direct) as respectively CEO and FD of Rangers and now has the right to nominate two directors to the board for the duration of the new loan facility. This is despite Ashley already facing Scottish FA charges of being able to influence the management or administration of the club, whilst being involved in another club, and not acting in the best interests of the game.


There must also be the question now of whether the newly announced finance facilities are in the best interests of shareholders. Section 994 of the Companies Act covers agreements where one shareholder is treated differently to others.


We believe that merely taking a loan from Ashley is NOT in the best interests of Rangers in that it does not put up enough capital to fundamentally repair a broken balance sheet or to give the club the cash it needs to be able to retain its better players to ensure promotion and ultimately European football which would offer the hope of financial salvation. Quite simply, the current squad might get back into the top flight but it might well not. If it does, it is hard to see it faring well enough to secure European football the year after.


Other proposals of loans from Rangers fans (who does Ashley actually support, by the way?) were rejected as was the equity financing proposed by US tycoon Robert Sarver. Did the Ashley dominated board seek independent financial advice as to what offer was in the best interests of ALL shareholders before deciding what to do as they were duty bound to?


Was that advice from Paul Shackleton, the Nomad at retained financial adviser WH Ireland? Since WH Ireland is paid a fixed retainer to act for Rangers it cannot be seen as an impartial adviser on a proposal that might lead to boardroom change. Mr Shackleton is noted in the City for his track record of acting for and floating fraudulent Chinese companies on AIM. Whilst he may be an expert in that field, does he know anything about a sport which at the sort of school people like him attend they were unlikely to play?


We have seen correspondence between Mr Shackleton and angry Ranger’s fans where he arrogantly dismisses concerns about how price sensitive information appears to be being leaked to the press - not announced via RNS - in clear breach of AIM Rule 17. His approach is not that of an independent financial adviser to the company seeking to protect the interests of ALL of its owners, i.e. shareholders, but of a man who is batting for the board.


The question for the Rangers board – which they have refused to answer when we gave the opportunity – is what truly independent financial advice did you seek when reflecting two refinancing proposals and accepting a third to ensure that you were acting in the best interests of ALL shareholders on an equal basis?


That is the question we shall now be putting to the relevant authorities in the hope that they can establish the truth.




Link to post
Share on other sites

I have no doubt that the directors are breaching the Companies Act. The problem is that it is subjective and there will be an argument to say that they aren't and we really need someone objective looking at this.


Absolutely BD. So long as it is subjective they will hide behind that and justify it all day long.


On another thread someone noted that T3B/King should have provided an offer which clearly was better than Ashley's so as to highlight this issue - but the problem there is that, as we now know from previous experience, even if T3B HAD given a better offer the start reality is that this incompetent Board would have went immediately back to Ashley and requested he up his offer to be in the same ball-park.


This is something that T3B were never likely to won, sadly.

Link to post
Share on other sites

Who is this from?


Tom Winnifrith, the same guy who does the 'Bearcast' podcast Ian posted in this thread - City blogger/journalist interested in our dealings with W H Ireland, Shackleton


Pity about the personal remarks.


It's just his style.


When it comes to the AIM market he seems very clued-up and doesn't mince his words when speaking about companies flaunting regulations and the dealings of dodgy companies, directors, Nomads etc.

Edited by Zappa
Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

  • Recently Browsing   0 members

    • No registered users viewing this page.

  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.