A Guest blog by @heavidor:
Given The Takeover Panel’s success in procuring a Court of Session order to compel Dave King to make an offer for all Rangers International Football Club Plc shares not owned by the Concert Party it would be impossible for King to remain a director unless he complies with that Order.
The co-option of Barry Scott to the board and the elevation of Alistair Johnston as a person with significant control could be construed as repositioning, however it will be whether King makes an offer of 20 pence per share to all the shareholders not included in the Concert Party or not that will determine what happens next and we shall know later this month.
(King resigning) is the correct thing to do and should have already occurred. Instead, Rangers financial reputation has been dragged through the mud by association.
Irrespective of whether King complies with the Court Order or not this story is far from over, and it will continue to hamper Rangers’ prospects until it is conclusively resolved. A King resignation as a director of RIFC would reduce the prospect of contaminating the club, its directors and advisors from the full effect of cold shouldering should he decline to make an offer.
That would mean that King, as distinct from RIFC, had financial pariah status and not the club. That is the correct thing to do and should have already occurred but, instead, Rangers’ financial reputation has been dragged through the mud by association with King.
What should not be underestimated is the reality of cold-shouldering, not for just the offending party, but for those involved in business with the offending party. The consequences are dire for the individual or organisation who falls foul of the rules, making it impossible to carry out normal business activities within the sphere of influence of The Panel, and the same consequences face those who shelter the cold shouldered.
It should be appreciated that there are members of the RIFC that are members of regulated financial professions who would be further prejudiced through association with a cold shouldered non-resident King.
Perhaps unfortunately for a large slug of the mainstream media and football authorities, financial pariah status pursuant to cold shouldering in the UK coming on top of criminal convictions in SA would be impossible to spin in any positive way or to maintain continued fit and proper status. I mean, we could have the SFA cold shouldered, couldn’t we? All said though, the cognitively dissonant will carry on regardless.
If King does the right thing by resigning from the board, it is still important to appreciate that the ‘4 Bear’ Concert Party as determined by The Panel will continue to exist irrespective of how Kings deals with the instruction to make an offer for the shares. This is the elephant in the room that remains.
The Concert Party via their shares and loans will retain the same level of control they currently have, and therefore remain compelled to abide by The Panel’s rules.
King’s resignation would not remove that impediment.
It doesn’t end there. By challenging the authority and insulting the intelligence of The Panel and the Court, King has ensured all large share transactions in RIFC will be scrutinised and questioned and could additionally determine, for example, that the Concert Party is increased to include Club 1872 and Barry Scott on the basis they are working in concert with King and/or other concert party members.
There are some who think that The Panel has been slow to respond and impose sanctions and that they are all bark and no bite. It would be wrong to think so. The reality is that King has moved the whole dispute into uncharted territory. There has been no precedent for such continued brazen and naïve flouting of Panel rules. Accordingly, The Panel has chosen to move at its own pace, dotting the ‘i’s and crossing the ‘t’s and I suggest they’re being methodical rather than indecisive in dealing with the estimable Mr King.
The true value of RIFC shares was a key point in the recent court case with all kinds of claims being made. Some think that the lack of significant arm’s-length trades makes it impossible to arrive at a correct price, and others say that the price paid to Mike Ashley in recent trades is the benchmark. In my opinion, neither is correct. Current and prospective shareholders have the financial figures in the accounts to work with, and can determine the real worth from there. On that basis it is clear to me the shares are not worth anything like the last alleged trading price on Jenkins. Rather it seems that the shares only have nominal value given the business has never declared a profit, continues to lose money and is reliant upon ongoing shareholder loans to stay in business.
Any subsequent share issue – even with King gone – could muddy the waters further; The Concert Party members may expose themselves to another Panel instruction to make another offer should any of its members acquire more shares without coming to an arrangement with The Panel beforehand.
To illustrate such an arrangement, Dermot Desmond got Panel permission to increase his shareholding above 29.9% the last time Celtic had a share issue. This is preferable to trying to hoodwink the financial authorities with tall tales.
It should be clear to all followers of RIFC’s financial travails that the status quo is unsustainable. So, the question is ‘what’s next’? The chairman’s statement that accompanied the annual accounts once more talked about loan to equity conversion without reference to the impact of the existence of a Concert Party amongst the RIFC Board of directors and providers of loans. This is remarkable any such conversion cannot take place without the permission of The Panel and/or without dragging the other directors and lenders in the quagmire with another possible offer for the shares not owned by the Concert Party.
.. the shares only have nominal value given the business has never declared a profit, continues to lose money and is reliant upon ongoing shareholder loans to stay in business
So, what should happen and what is required for RIFC to rid itself of this terrible yoke? The answers are pretty obvious; King should make an offer of 20 pence per share to all those shareholders not included in the Concert Party. He has said the shares are worth more than that and that no one would accept. If he’s correct he has nothing to worry about and he would create a clear path forward for Rangers. He would also resolve the dispute with The Panel, creating the conditions for a debt to equity conversion.
So, why might that not happen? Because if the shares are worth 27 pence as the directors have suggested that means the loan to equity conversion would have to be at the same price and, of course, if the shares not worth anything like that there would be a rush to accept 27 pence and the ball would be on the slates, so to speak.
It appears to me the board is stuck between a rock and a hard place, that King will resign, and that there will be no offer.
If this happens the position would be precarious. The current board doesn’t have the credibility, money or experience to take Rangers forward. Being a true blue should not be the defining characteristic of what’s required to make Rangers competitive but it appears to be the preferred qualification of most of their customers.
I believe Rangers need a need owner with a controlling shareholding and deep pockets to sort out this mess, and I have reason to believe this view is shared by some of those with influence.
That is not to say that a solution is imminent, but the reality check is at least a start.
jean7brodieJanuary 27, 2018 at 14:50
Redetin, I wish you well and hope that your health improves.
_________________________________________________
Many thanks, jean7brodie.
It’s “one day at a time” for me these days. I got the diagnosis that everyone fears.
Looking forward to the day that I get a run down to Brechin or Montrose in the warmer weather for a match. See some goals scored. No crowd separation. Nae hassle fitba; nae polis in sight; no abuse, or angry scenes. The occasional outburst fae a manager in the dugout to add a spark.
HIGHLANDER
JANUARY 27, 2018 at 19:29
==============================
Of course it’s for their own betterment, did someone suggest otherwise. Did someone suggest it was a totally altruistic suggestion.
However that does not actually answer my point.
How does it only benefit two clubs if the other ten already in the division get a guaranteed income from it.
And I will say again, if the majority don’t want it it won’t happen anyway.
Redetin. Posted a couple of songs for you over on the
music forum to keep you cheered up. (Just noticed I
spelled your name wrong! Sorry)
Post No. 175 I think.
can’t find any link to your music forum Jimbo ?
StanJanuary 27, 2018 at 18:06
A lot of people on these forums are either retired or live outside Scotland. Scotland needs forward thinking people not those living in past.
____________________________________________________________
Really think you are out of order with this comment (cheeky barsteward)
JEAN7BRODIE, you are probably correct that was wrong.
Stan,
The black band along the top of the page.
Forums
Forums < ernie bee chat
Music tastes on SFM
Your very welcome, as all are.
There would be a small financial incentive to those clubs, or bribe in everyday parlance, but even the detail of that guarantee is misreported as being £15,000 per club per season, when in fact it would in most instances be much less. As I understand it, the derisory £15,000 figure is the maximum that would be paid, but the maximum would only apply if absolutely nobody turned up. The payment each club would receive is the difference between the actual attendance and 250, times £10, although I’m happy to be corrected.
However, my main gripe is the principle being proposed that only Rangers and Celtic’s colts should be accommodated – nobody else’s.
Surely on a forum that regularly chastises our football authorities for pandering only to the current Govan club’s every desire, we should steer well clear of supporting any pandering to two clubs.
HIGHLANDER
JANUARY 27, 2018 at 20:32
===============================
I’m not really sure why you are so annoyed about this suggestion. Like I say if the majority don’t want it then it won’t happen anyway.
For clarity, yes it’s a bribe. The clubs involved want their colt teams developed so they are willing to pay money to the clubs in the bottom division in order to facilitate that.
I would suggest that is symbiotic rather than parasitic.
My preference, as I have said before, would be re-instating a reserve league. That would be the best scenario for my own club (Celtic). It would achieve everything the colts suggestion would achieve, without having to bribe anyone.
What’s your thoughts on that.
It may be symbiotic between Rangers/Celtic and the 4th tier clubs, but what about every other Premiership club, including Aberdeen, Hibs, Hearts, Killie, Partick Thistle? What about all the Championship and Division 1 clubs? Do they not matter? A return to reserve leagues would at least lead to resolving the issue of excluding those clubs I’ve just mentioned.
Like Stan, I’ve had my say on the matter, so I’ll leave it at that for now.
I hoped that SFM would be past the point that financial imperative could ever outweigh sporting integrity? Old firm colts may well make a few bob for lower league teams but come on, it’s easy to come up with ways to make a few bob if that’s all that counts. Here’s one off the top of my head: lower league teams to be guaranteed away draws at ibrox or parkhead in the first three rounds of both cups. Brilliant isn’t it? No one loses and the lower leaguers get cash bonanza. OK the Old Firm get a wee benefit versus the rest as well but hey, good of the game and all that.
I have no idea if AFC have any ambitions to get a colts team in the SPFL but if they do a pox on them. We, in SFM, surely need to get beyond “my team right or wrong”?
There really is a lot of anger on here about something that isn’t going to happen.
ERNIE
OK the Old Firm get a wee benefit versus the rest as well but hey, good of the game and all that.
I hoped that SFM would be past the point of even Mentioning anything called OF
===============
CHRISTYBOY, I found that a bit puzzeling too but I took that to mean King would, apparently, personally guarantee the payments to Accies if there was an insolvency event at Ibrox. Seems a bit ambigious that bit.
But then I suppose the football creditors arrangement would mean Hamilton get their money in full anyway. And we all know there is no issues with Rangers finances…..
How about a solution whereby the first and second place teams the previous year get the option to put in a colt team for the following season? So Celtic and Aberdeen would be given the opportunity for this year etc? That is the only fair way to do it I would suggest. Then next year it would be Celtic and (hopefully) Rangers, or Hearts or Aberdeen?
I also must be in the minority for thinking its good that the Old Firm are finally on a united front after so many years of toxic hatred between the two.
Darkbeforedawn,
Your a funny man!
“I also must be in the minority for thinking its good that the Old Firm are finally on a united front after so many years of toxic hatred between the two. ”
redetin January 27, 2018 at 19:31
Looking forward to the day that I get a run down to Brechin or Montrose in the warmer weather for a match. See some goals scored. No crowd separation. Nae hassle fitba; nae polis in sight; no abuse, or angry scenes. The occasional outburst fae a manager in the dugout to add a spark.
============================
That is the norm for Junior football, but I ventured to deepest, darkest Ayrshire today to watch Cumnock in their local derby against Auchinleck, in the Junior Cup. Separate entrances for the rival fans, de facto segregation on either side of the pitch, eight police that I counted inside the ground, plus a few other stewards.
Despite a history of bother between the fans it was pretty low key, probably due to Talbot dominating and winning 5-1.
I was at another (more local) Junior Cup derby last week between Bonnyrigg and Newtongrange, but that was much more as you described, complete with one of the managers being sent off after disagreeing vehemently with a penalty decision.
HomunculusJanuary 27, 2018 at 19:48 ==============================
Of course it’s for their own betterment, did someone suggest otherwise. Did someone suggest it was a totally altruistic suggestion.
However that does not actually answer my point.
How does it only benefit two clubs if the other ten already in the division get a guaranteed income from it.
And I will say again, if the majority don’t want it it won’t happen anyway. +++++++++++++++++++++++++++++++++++++++
Democracy is fine but sometimes there is more than one way to bribe a cat.
I’ve heard about a local rivalry which is very heated. Bo’ness Utd. v Linlithgow Rose.
BOGS DOLLOX
JANUARY 27, 2018 at 22:45
+++++++++++++++++++++++++++++++++++++++
Democracy is fine but sometimes there is more than one way to bribe a cat.
================================
I’m sure you have a good point.
For the life of me I can’t think what it is.