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Rangers saga at Ibrox is far from over

By Phil Mac Giolla Bhain

This morning at Ibrox in Glasgow, Scottish football's version of "Game of Thrones" will, perhaps, reach a denouement when the Extraordinary General Meeting (EGM) convenes at the stadium to put in place a new board of Rangers International Football Club (RIFC).

Even for those who have been following this story since 2012 this week has seen almost hourly developments.

The action started at 7.00am on Monday morning with the announcement to the London Stock Exchange (LSE) that the Chairman of RIFC David Somers was resigning.

His statement included this barb: "When I was approached about the Chairmanship of Rangers, friends warned me that the world of football has different rules and codes of behaviour. I now know that is a gross understatement."

RIFC is the AIM listed company that owns the Rangers Football Club (created in 2012 as Sevco Scotland Limited) by the Charles Green Consortium.

This is the basis of the "you're a new club" taunt by supporters of other teams in Scotland, much to the chagrin of the Ibrox faithful.

With Somers gone, that leaves only two directors on the board of RIFC - Derek Llambias and Barry Leach.

Both are considered to be there to do the bidding of Mike Ashley of Sports Direct.

This week, the Scottish Football Association fined the owner of Newcastle United £7,500 for breaching rules on dual ownership because of his influence on the affairs of Rangers.

Moreover, Dave King wants both of them off the RIFC board and that is why there is an EGM at Ibrox today.

The RIFC board had tried to stage the event in London, but two hotels thought better of it after receiving angry calls from disgruntled Gers fans.

RIFC and the loss-making subsidiary "The Rangers Football Club" are now only being kept alive by loans from Ashley's companies.

He handed over a £3m loan in October 2014 and another £10m in January.

The latter came with onerous conditions effectively corralling the club's major income streams like merchandising, advertising, future shirt sponsorship income and the club's registered trademarks.

Ashley, a real billionaire, currently controls the lion's share of the club's merchandising through the corporate vehicle Rangers Retail Limited (RRL).

The owner of Newcastle United has let it be known within business circles that this is the best retail deal he has ever had. As part of the £10m loan, Sports Direct have another 26% of RRL for the duration of the loan.

This week, another announcement to the LSE stated that the process of drawing down the second tranche of £5m of a £10m loan had commenced.

The first tranche of £5m paid back the £3m loan from October and paid the wage bill for that month.

Question marks remain over whether or not King and his allies have the money to run the club.

There are also issues over whether or not King is a 'fit and proper person' because of his criminal record for tax offences in South Africa. The Scot pled guilty to 41 counts of contravening the Income Tax Act and was fined the maximum on each charge. This was an alternative to 82 years in prison.

In a previous court appearance in his adopted country, King had been branded a "glib and shameless liar" by a judge.

Despite this the Scot is seen by the Ibrox faithful as their saviour.

King is the biggest shareholder with 11,869,505 shares in RIFC (14.57%).

In alliance with local businessmen and the remaining institutional investors and fans groups like Rangers First he is highly confident that he will prevail at the EGM.

On Wednesday of this week the Nominated Adviser (NOMAD) of RIFC resigned because of Mr King's imminent coronation.

King had stated he would sack the NOMAD WH Ireland if he got control of the club.

RIFC had in turn told the LSE that the NOMAD would resign if King won the EGM.

Although the resignation came as no shock it did lead to the shares of RIFC being suspended on Wednesday March 4, 2015.

Mr King countered by issuing a statement that he would, temporarily, step aside and not offer himself as the new chairman.

Rangers International Football Club (RIFC) loses £8-9m a year currently and does not have a credit line from a bank.

It is not clear what Mr King proposes to do about this.

Square Mile sources have informed me that the King consortium have been in the City looking for credit facilities.

So far they have had no joy.

Similarly, there is no mention of Mr King sourcing a NOMAD. The criminal record of the South African based entrepreneur might be proving a problem there.

The UK Insolvency Act of 1986 could also present a problem to King and his colleague Paul Murray.

Both men were on the board of Old Rangers within five years of the liquidation date and they will have to present their case to a judge to be allowed to take their place on the board of the new entity.

Since it was established in 2012 it has gone through three chairmen, four chief executives and four NOMADS.

The cost base is crippling and the team is struggling in the second tier of Scottish football.

Anyone who has been following this saga would be foolish to think that the EGM today will be the final episode.

Phil Mac Giolla Bháin is an author and journalist. His book "Downfall: How Rangers FC Self Destructed" published in 2012 was a bestseller.

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