DAVE King’s Rangers board have urged shareholders to boot out Mike Ashley’s demand for his £5million loan to be repaid.
The Ibrox outfit will hold a general meeting - the third in six months - on June 12 after Ashley called for shareholders to decide whether the club should repay the funds loaned to them by the Newcastle owner’s Sports Direct firm.
The latest exchange in an increasingly bitter war between the two sides also saw the billionaire tycoon - through Sports Direct’s parent company MASH Ltd - demanded answers on the club’s de-listing from the AIM Stock Exchange as well as the terms of a separate £1.5m loan issued by director Douglas Park and wealthy fans George Letham and George Taylor.
But now in a document outlining the board’s recommendations to stakeholders, the Gers directors claim they can ignore Ashley’s manoeuvrings - even if his resolution is passed.
The Rangers International Football Club PLC board statement says: “The Company has taken advice from Senior Queen’s Counsel on the terms of this Resolution and been advised that it would not, in any way, oblige the Directors legally.”
Ashley handed the previous Ibrox board the £5m loan back in January but used the opportunity to take security over club assets like Murray Park and its famous trademarks. He has also seized a 75 per cent share of the club’s retail income.
The Londoner is now mulling over an offer to address the GM a week on Friday, but Johannesburg-based chairman King - expected back in Glasgow early next week - wants shareholders to rebuff his attempts to claw back money at a time when they will need every penny available to them following their failure to win promotion back to the Scottish Premiership.
“It seems to the Directors that Sports Direct no longer wishes to make the Facility available to the Club and that MASH has put ordinary resolution 1 to the GM to assist Sports Direct in this regard,” added the board statement. “It is not clear to the Directors why this would be in the Company or its shareholders’ interests.
“The Directors do not consider that, at this time, the repayment of £5million to Sports Direct is the best use of the Company’s resources.
“The Directors are restricted in what they can say about Rangers Retail Limited (RRL) and have been cautioned about breaching confidentiality provisions. The Directors do not believe the transfer back to the club of a 26 per cent interest in RRL will serve to resolve the issues which the Directors consider have to be addressed.
“There are a number of steps required to rebuild the company and the club and all of these require resource. The Directors will keep these issues under continuous review and if, exercising their skill, care and judgement, the Directors determine that it is desirable for the club to repay the Facility and this will assist with the overall arrangements between the club, MASH and Sports Direct the Directors will take appropriate action.
“Such a decision will, however, be based solely on what is in the best interests of the company and the club and will not be unduly influenced by the interests of a single shareholder.
“The MASH facility is just one element of a series of contracts which have been put in place between MASH, Sports Direct and related entities and the club. The Directors believe that all of these arrangements require to be addressed collectively. It would be disadvantageous for the club and the company to be dealing with such arrangements piecemeal and on terms dictated by MASH.
“The Directors accordingly recommend voting Against Resolution 1.”
Rangers, meanwhile, have added a second resolution to the agenda which calls for their contracts with Sports Direct to be renegotiated.
The board statement said: “The Directors are concerned with the continued and dramatic reduction in income generated by retail operations. The Directors are aware that many supporters of the club will not purchase club merchandise from Sports Direct because they do not believe the current contractual arrangements between the club and Sports Direct adequately reward the club.
“The Directors very much want to improve relations with Sports Direct and have made that clear to Sports Direct’s senior executives, however, this has to proceed on the basis of mutual understanding, respect and reward. In the Directors’ view, if matters continue as they stand, this will not be to the commercial advantage of either the club or Sports Direct.”