Rangers have agreed to a general meeting on 4 March for shareholders to vote on Dave King’s proposal to oust the board.
The four directors, including chairman David Somers and chief executive Derek Llambias, would be removed if shareholder King’s resolution wins 51% of the votes.
But the decision to hold the meeting in London has caused further outrage among those opposed to the board as they believe it is a move designed to deter them from attending.
The confirmation of the meeting came as Lalit Modi, the man behind the Indian Premier Cricket League, expressed an interest in buying a stake. He issued a statement saying the club was “seriously undervalued” and that he had held talks “with a couple of shareholders”. He confirmed these were at a preliminary stage.
Former director King (pictured), who owns just under 15% of the shares in the club, hopes to install two directors apart from himself if he is successful in voting the current directors off the board.
The board said today that it is not clear from the requisition which, if any, of the proposed new directors will undertake an executive function in the company or if all of them will be non executive.
However the current board have warned its shareholders that “there could be a material adverse impact on the company’s listing on AIM” if King is appointed to the board because of his tax battles in South Africa.
The board’s statement says: “In August 2013 David King was convicted on 41 counts of breach of s.75 of the South African Income Tax Act. As part of the plea which led to those convictions he agreed to pay a sum in Rand which equates to approximately £40,000,000 in respect of unpaid tax, and either to pay a ﬁne or accept a prison sentence. The board understand that Mr King elected to pay the ﬁne.
They argue that the Scottish Football Association’s fit and proper person requirement would preclude him and associate Paul Murray from being directors.
Rangers have also attempted to resolve the ongoing row over the board’s relationship with Sports Direct tycoon and Newcastle United owner Mike Ashley which they say is to provide “short to medium term financial stability”.
Ashley owns 8.92% of the club and has now made loans of £10m over which he has security on certain assets, but not Ibrox stadium itself.
Manager Kenny McDowall, who is working his notice, yesterday suggested he had to pick players brought in on loan from Newcastle, but this has been denied by the club.
In its statement today, Rangers said: “It is important to note, contrary to media speculation, that neither Mr Mike Ashley nor Sports Direct International plc controls the Company. The Board is grateful for Mr Ashley’s support in the past, and hopes that this support will continue.
“The company will, however, continue to make decisions independently of Sports Direct International plc but will co-operate with it and its aﬃliated companies for their mutual beneﬁt in the running of Rangers Retail Limited, in which the Company, SportsDirect.com Retail Limited and SDI Retail Services Limited are the shareholders.
“There has been speculation in the media about an alternative proposal from Messrs George Letham, Douglas Park and George Taylor, a group dubbed “the Bears” by the press. The board spent considerable time negotiating and improving the terms of that proposal as well as the Sports Direct proposal before arriving at their decision. In particular, the directors negotiated the removal of Ibrox Stadium from the Sports Direct facility security package.
“The board hope that Messrs Taylor, Letham and Park will be able to make a constructive contribution to Rangers Football Club going forward. An oﬀer of board representation was made to those shareholders, prior to the receipt of the Requisition, which the Board hopes will be accepted after the General Meeting.
“Following the Requisition, the board, through advisers, sought to discuss matters with Mr King and in particular suggested that, in addition to a representative from Messrs Taylor, Letham and Park, Mr King might also wish to propose a director to the board, reﬂecting the shareholding of New Oasis, and that a further independent director with capital markets experience also be sought. It was felt by the board that this would create the right balance between executives and non-executives, representatives of the larger shareholder groups and independent directors. Disappointingly, Mr King has rejected this proposal.
“The directors acknowledge that there will need to be further additions to strengthen the board in the future. This was agreed to by the then three directors David Somers, Derek Llambias and James Easdale in December 2014 at the time of the appointment of WH Ireland as its NOMAD (nominated adviser), and is supported by Barry Leach who joined the board subsequently.
“The board has, however, not yet identiﬁed independent directors with suitable experience of listed companies willing to take this role in light of the recent ﬁnancial instability and the Requisitioned Resolutions. The situation is being carefully monitored by the NOMAD, which is in regular contact on the matter with the regulatory authorities at the London Stock Exchange.”
The board argues that it has made the necessary cuts in costs and changes to the management structure to put the club on a more even keel.
It says: “The board considers that it has made signiﬁcant progress in particularly diﬃcult circumstances and in a short period of time. The board stands by its record in oﬃce, and believes that Shareholders should judge the directors on the actions the Directors have taken, not media speculation.”