By Paul Nicholson
March 5 – The bitter battle for control of Scottish giant Rangers took another twist today as shares in the company were suspended on the AIM stock exchange when Rangers’ nominated advisor WH Ireland resigned the account.
WH Ireland had said previously that they would resign the account if rebel shareholder Dave King was successful at the extraordinary general meeting with his motion to remove the current board and replace them with himself and his associates.
WH Ireland said they were uncomfortable with King’s previous conviction for tax fraud in South Africa. Their early resignation appears to confirm King’s claims that the main body of shareholders are behind him and that they are heading to a landslide victory.
Rangers now have 30 days to find new nominated advisors or the shares will be delisted and effectively have no value except in private trades between shareholders.
For his part King has said there could be a delay in his group taking control while regualtors carry out due diligence on him – he is confident there will be no issues in this process.
What it effectively means is that Mike Ashley, a minority shareholder in the club but a significant shareholder in Rangers’ retail business, and who holds the club’s merchandising contract through his Sports Direct operation, will have his associates Derek Llambias and finance director Barry Leach kicked off the board.
Ashley himself was fined £7,500 on Tuesday by the Scottish Football Association for breaching the governing body’s rules on dual ownership. Ashley owns English Premier League side Newcastle United.
Ashley is not used to being a loser in shareholder battles and it seems unlikely he will pack up and return to England quietly. For a start there is the small matter of more than £5 million of loans to the cash-strapped club that are secured against the training ground and the retail business. And he is still a shareholder as well as controller of Rangers’ retail sales.
He has put his money where his mouth is. King will now have to find money to do the same, and his promises are grander than those made by Ashley. But certainly there will be few tears in Scotland to see the Ashley influence removed by conquering hero King.
The challenge for King and his new board – former director Paul Murray will likely take the chairman’s role for an interim period while King awaits regulatory clearance – will be to turn the club’s commercial position around while having enough money to invest in a squad that will get Rangers back into the Scottish Premier League.
The club currently lies second in the Championship and in a play-off position, but results against their closest rivals Hibernian (they have lost three times this season) for the play-off spot don’t inspire confidence that they will win their third promotion in three years after automatic relegation to division the fourth tier for declaring bankruptcy.
So while the faces on the board will change and hope will be renewed throughout the blue side of Glasgow with the onset of Spring, the underlying problems may remain just that. That is where the real battle needs to be fought.
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