ON THE day that Rangers confirmed American businessman Robert Sarver’s £18 million takeover bid and also announced Barry Leach as their new finance director, the dire state of their cashflow was laid bare when director Sandy Easdale loaned them £500,000 to avoid being wound up for non-payment of National Insurance.
The reason for the loan led to a rapid investigation by the Scottish Professional Football League, who can take punitive action if payments such as NI or tax are late by 28 days or more. After getting in touch with Rangers, SPFL secretary Iain Blair was satisfied that no such default had occurred, though the governing body will seek updates from Her Majesty’s Revenue & Customs.
Easdale’s loan was secured against the income from last week’s sale to Brentford of Lewis Macleod. By common consent, the Ibrox club’s most impressive player this season, Macleod headed south for a fee of around £1m.
“The facility [ie the loan] will be used by the company for general working capital purposes over the next few days,” Rangers said in an announcement to the Stock Exchange. “Alexander Easdale will make available to the company up to £500,000 on a fee and interest-free basis and it will be secured against the income from the sale of a player announced on 2 January, 2015.”
Jack Irvine, a spokesperson for Sandy Easdale and his brother James, hailed the loan as proof of the family’s commitment to the club. “Once again, Sandy has stepped up to the plate with this half-million-pound loan from his pocket,” Irvine said. “Whilst we welcomed the recent share purchases by Dave King and Douglas Park and his consortium, this unfortunately did not put any funds into the club.
“Sandy was the only option for this cash injection at such short notice. The Easdale family remain totally committed to achieving a satisfactory financial future for Rangers and they hope all parties can work together in the future with that common goal.”
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That is almost certainly a forlorn hope. Together with South-Africa-based businessman King, Park and his colleagues George Letham and George Taylor – the so-called Three Bears – control around 35 per cent of the shares. With the backing of supporters’ umbrella group, the Union of Fans, they are close to reaching a majority, at which point they are expected to attempt to remove the Easdales and chairman David Somers.
King, for one, was unmoved by Easdale’s supposed altruism. “Given that Sandy Easdale rejected new funds and was a chief architect in getting the club into this mess, lending a small amount of money is the minimum he should have done. As part restitution he should make the £500,000 a donation rather than a loan.”
Among other things, Easdale’s loan will be used to clear the outstanding NI bill. HMRC wrote to the club last week giving them seven days’ notice to get their payments up to date, and a failure to comply would have triggered the initiation of a winding-up process.
The SPFL’s Rule E20 prohibits any club from being 28 days or more late in paying NI or income tax. If the SPFL is informed of that delay by the club, it is not termed a disciplinary issue, and the club would receive an embargo on the registration of players until it had cleared its debt. At the same time, more serious legal consequences could ensue.
If the SPFL is not informed, the sanctions become more serious. For example, in November, Livingston were docked five points and fined £10,000 by the SPFL for a number of breaches of the league’s code – most significantly, defaulting on payments to HMRC, failing to inform the league of that default and continuing to sign players through two transfer windows. In the case of Rangers, however, on the basis of the information they received from the club yesterday, the SPFL were satisfied that there had been no breach of Rule E20. If they receive contradictory information from HMRC, they can re-examine the issue.
Sarver, the Arizona-based owner of the Phoenix Suns basketball club, is expected to outline his plans for the club in a statement to be released today. He must make an offer or withdraw his bid by close of business on 2 February.
Confirming the approach from Sarver, Rangers said that it “may or may not lead to an offer being made for the company. There can be no certainty that an offer will be made, nor as to the terms on which an offer may be made. A further announcement is expected shortly.” Meanwhile, last night Rangers announced the appointment of Leach as finance director. The employment of the 48-year-old, who has been a consultant with the club since October, is a sign that Newcastle United owner Mike Ashley retains a keen interest in Ibrox.
Ashley, who owns around 9 per cent of the shares in Rangers, succeeded in having his close associate Derek Llambias appointed as chief executive late last year. His interest in both clubs has led to a Scottish Football Association investigation and, as an interim measure, the SFA rejected his bid to increase his shareholding to just under 30 per cent.
Ashley has given the club a secured loan of £3m and his Sports Direct firm controls Rangers’ retail division.
To date, he has been seen as holding the balance of power at Ibrox, but King and the Bears have now acquired a bigger stake, and could move shortly either to call an emergency general meeting or to prove they command a majority of the shares and persuade the Easdales and Somers to stand down.
In that case, Ashley would still be entitled to protect his investment and, much as King and the Bears might wish he was nowhere near the club, they could decide it was in the best interests of everyone that they come to a working accommodation with him.
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