Does The Old Lady of Edmiston Drive Have Bats In Her Belfry?

Keep it out of sight
Keep it out of sight
Undercover of the


My preface is an excerpt from a well known composition by Keith Richards & Mick Jagger. It succinctly sums up the rationale for the Friday evening publication of RIFC’s accounts to 30 June 2017. The rogue board and the squatters at Auchenhowie are attempting to blindside the business press who would hang these accounts out to dry. They know that the Lite fans with laptops in the SMSM don’t have the intellectual capacity to read an annual report. However the hapless hacks should be able to discern that these accounts were signed off by King and the auditors on the 26th October, yet they were not released until a Friday evening eight days later. A cynic might suggest that the rogue board are trying to bury bad news

Will Lord Bannatyne, as he sits down to Eggs Benedict this morning at his Morningside pile, be caught mid-mouthful by an article in the Scotsman? Will he note that NOAL, which is an anagram of LOAN, will advance an emergency quantum of £4m to keep the lights on at Ibrox? With his forensic mind will he add this sum to the £2.8m already advanced by NOAL and the subtotal to the promissory note for an additional £3.2m and arrive at a NOAL grand total of £10m? Will it occur to him that Mr King, whose counsel fallaciousaly claimed was ‘Penniless‘ could get his greedy grasping hands on a sum sufficient to comply with the Takeover Panel’s edict? Will it occur to him that the former Lord Advocate of Scotland, Baron Davidson of Glen Clova, was lying through his back teeth? If Lord Bannatyne read my article that I published yesterday and Mr Whitehouse’s withering assessment of Jim Keegan, might he form the opinion that Davidson is just another rogue QC from the bottom of the advocates’ barrel? I would be surprised if his Lordship had not read my blog as I am reliably informed by my bewigged learned friend that it was the hot topic in chambers.

If Lord Bannatyne is as astute as I’m led to believe by My East Coast Legal Eagle, and he is not unduly influenced by those who ‘swing the lead‘ he will inexorably arrive at the conclusion  that King must comply with the Takeover Panel edicts.

Does The Old Lady of Edmiston Drive have bats in her belfry?

King, safely ensconced in his Johannesburg digs, will do no such thing. Ladina, who has converted the basement (which at one time held 28,000 bottles of boosted wine) into a dance studio, will invite King to get down and dirty to a Jane Fonda workout to ease the onerous burden of his grand opening of his cheque book. One wonders whether NOAL’s quantum is residing in a Yellow Sea tax haven not far from the city made famous by Jane’s impromptu visit during the Vietnam War; and by a prison that made Guantanamo Bay resemble a Butlin’s holiday camp. Is NOAL’s treasure chest being looked after by Messrs Scott and Ross? Which begs the questione of how it was siphoned out of South Africa? Perhaps The Serious Fraud Office, who are the real deal and not the bare-nippled huns of Police Scotland lore, will chap King’s door after they have dealt with the odious money-laundering Gupta family. King is so bent that he could pass as an Indian businessman.

Prior to a look at the accounts I take pause to chuckle at the brass neck of King who gave Sir Bribe & Lie £20m to hide from the South African Revenue Service and duly received a £15m ‘dividend’ with SB&L trousering £5m. This was money laundering in the raw but narurally passed unnoticed by the Lodge Luddites who were hopping around with blindfolds at the time. King now wants a return of 3.91p per bent pound. One would need a face painter to colour me surprised should the small stakeholders not rip new ones in the joint liquidators if they give a backhander to King on BDO’s next visit to the Argyle Suite.

In any report signed off by King it’s best to ignore his foreword farrago of lies and proceed directly to the Auditor’s Report and the following gem:


We draw attention to note 1 to the financial statements concerning the Group’s ability to continue as a going concern. In order to continue operations for the next 12 months the Group is dependent upon raising additional finance to cover the projected cash shortfall of £4m in season 2017/18 and a further £3.2m in season 2018/19. Failure to secure additional funding would result in the existence of a material uncertainty which may cast significant doubt as to the Group’s ability to continue as a going concern. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern. Our opinion is not modified in respect of this matter.

The material uncertainty of relying on loans from a Chairman who will soon be subject to a Cold Shoulder order should ring alarm bells at Ibrox. The Takeover Panel will not accept that NOAL is providing loans at arm’s length to King. They did not come down in the last shower. Receiving loans from the disgraced chairman will throw a huge spanner in the works. Don’t be surprised if Metro Bank walks away and the players are paid by cash in brown envelopes.

Which leads to my next point. Does King honestly believe that he can find a NOMAD and an exchange to accept a company relying on loans from a Cold Shouldered Chairman? It’s just not going to happen. Not in 2018. Not as long as the disgraced chairman is cutting cheques at NOAL to keep the lights on.

It’s also interesting to note that the accounts don’t include the compensation due to Caixinha and his team and I’m led to believe the acquisition of Dorrans. There won’t be much change out of a £1m for addressing the former. Jim Delahunt and Chris Sutton were evidently taking the proverbial when they claimed that this beleaguered club had the wherewithal to buy out McInnes’ contract. How does their idle speculation square with a £4m emergency quantum?

This company is listing under the weight of £15.9m of loans and other than the ludicrous valuations of Ibrox and Murray Park would be technically trading whilst insolvent. Their operating expenses increased by £7.1m from the comparative figure in 2016 to £31.3m. The Operating Loss of £6.7m for the year was more than double the losses incurred in 2016.

How the rogue board can assert with a straight face that they are close to breaking even truly beggars belief. What part of a £6.7m loss do they not understand?

Is it any wonder they slipped this out under the cover of the night. In layman’s terms that even the Gullibillies could understand they cannot afford McInnes or any other manager in serious employ and will have to make do with Murty and his fractured squad.

£7.2m in loans will not be sufficient to keep this charabang on the road. This figure is predicated on unrealistic assumptions.

King has the audacity to talk about Lite regaining their dominance in Scottish football. Are they planning to drop back down to the second tier?



29 thoughts on “Does The Old Lady of Edmiston Drive Have Bats In Her Belfry?”

  1. Surely administration beckons for this young club as its a sure way to offload their debt.
    Meanwhile the football authorities are again caught looking the other way. At what point do they actually do what they are supposed to do and govern?

  2. The gulabillys seem to think the accounts make good reading….surviving on soft loans to survive sounds like they’re swirling around the plughole , I think I might just go and stock up on jelly and ice cream there’s a party looming

  3. Xxxxxxxxxxxxx591C

    Donation made for a good bottle of wine or a wee dinner.

    JJ this is definitely my go to site for all things The Rangers / Sevco.

    Your work is truly appreciated. Keep up the good fight buddy and keep shining the light.

    JJ: Thank you

  4. Are the auditors basing the £4,000,000 to see out this season on last years figures, seems a little light to me given Pedro’s spending in the summer and being knocked out of Europe in the first qualifying round. The phrase ‘Drowning In Debt Comes To Mind’. “Go back to sleep Bears, everything is going to be OK”. 🙂

    1. It was pre sacking Pedro and his coaching staff too!

      Pay off fees and new management team fees notwithstanding.

  5. All hail the King!

    He’s personally good for another £7.2m minimum.

    There’s also a seven figure interest charge (minimum £1m maximum £9,999,999.00 then) for the “soft” loans. Not so soft then.

    Gullibillies are told it’s an accounting practice only. How Gullible do Billies get.

    1. Such a high interest charge suggests a quantum of the loans is from a high interest third party source.

      Would an asset, say Murray Park or Brands, be securitised against the loan?

      The Easdales and Big Mike didn’t charge interest against their loans.

    2. The interest charge is an accounting artifact of IFRS rules meant to ensure comparability across firms, and is derived from two sources:

      (1) the soft loans were provided at below market rates (0% to be precise) and are recorded on the balance sheet at fair market value. i.e. less than what was actually provided by King and the directors. As time passes, non-cash interest is accrued against the loans and the fair market value of the liability owed to the directors gradually increases, eventually converging to the sum actually loaned to the club. It’s a bunch of hocus pocus, but the accounting concept is that the interest charge on the income statement approximates what they would have had to pay if the club were forced to go get loans at arms-length from a bank.

      (2) a similar concept to the soft loans, only this time arising from their trade payables, particularly for player transfers. Deep in the footnotes you’ll see that they owe something like £7.8M for player transfers, but the net amount on the balance sheet is only £7.1M or something like that. The difference is what will be recorded as interest expense over time as a significant portion of the amount owed is so far out in the future that, according to IFRS rules, a portion of that contract is actually a financing component and therefore interest expense should be recorded against it. Again, a bit of voodoo, but all above board according to IFRS and no actual interest is being paid out in cash, at least in the traditional sense.

  6. Surely these accounts and statements are new evidence for Lord Bannatyne?

    How does the Takeover Panel place Forth new evidence formally to the court?

    This is why the accounts were withheld. Until court case over and in deliberation.

  7. Is it an insurance scam?

    Are the loans insured against non repayment? TRFC goes into Admin. Loans not repaid, insurance pays out?


  8. Don’t know much about balance sheets but one of CCK’s paragraphs says;
    “The football, the operating and the financial performance of the Company are dealt with elsewhere in this report so I will not repeat them. What I do need to stress however is the ongoing improvement to the financial strength of the Company and consequently the Club. The deficit funding that had been identified as necessary to support the football activities, to improve our administrative efficiency and to make much needed repairs and improvements to the physical infrastructure was again provided by Directors and other supporters of the Club on an interest free basis. The intention of the loans advanced is such that they can be converted to equity when future share issues are undertaken. Hence, for purposes of analysing the annual financial statements for the year under review, these loans are considered by the
    Directors to be quasi equity.”
    How much deficit funding was provided and what was it spent on, there is a mention of screens, hospitality suites, concourses rebranded, tv systems but nothing on the fabric/structure of the stands etc.
    Quasi equity, that left me stumped so I had to look it up, lots of info on it but this seemed the best;
    “Quasi-equity investments exhibit a mix of debt and equity characteristics in terms of ownership and claim to assets in the case of default. These investments’ risk-return profile typically fall between debt and equity in a company’s capital structure. Some types of quasi-equity may be converted from possessing debt to equity characteristics, and vice versa. ”
    I’M LOST.

    1. they are not ‘quasi-equity’ regardless of what the directors believe them to be. It’s Kings way if trying to claim they are not massively overburdened by debt. If they were compound instruments the equity element would have been treated as equity – and it wasn’t. File that under ‘blowing smoke’ and covering up that even if they somehow did get the votes, no exchange or nomad would touch a cold shouldered chairman anyway so an equity issue is not on the cards.

  9. when the Cold Shoulder comes into force (surely its a certainty now) is there any other option open to the board apart from persuading DK to do walking away.?

    If this happens then who puts in the 7.2 million needed? is the Quatari investments now up the Kyber since Pedro disappeared in his caravan?

    what really puzzles me is DK’s end game in this whole saga… if there was no Cold Shoulder he’d apparently be ponying up 7.2 million but how would he ever recoup this.?

    is an admin event the end game with DK just waiting to blame someone else so he can do walking away with his money.?

  10. I suggested last week that their debts must now be £16m and hey presto they’re fessing up to £15.9m.

    I suggest creative accounting employed to keep it below the 16 threshold. The accounts were as at months ago. I suggest as of today debt is possibly £16.5m.

    Even if TRFC through some artifice won the SPFL Premiership, the possibility of winning three qualifiers with fit hungry euro clubs to enter the CL group stages is ten years beyond this club.

    CL big money income to help sort this level of debt is a pipedream. You need to qualify for Group Stages to sniff the dough. TRFC could not possibly do that.

    The Europa league currently has seven teams in it who were in the CL last 16 last year. Go figure. Not much financial joy there for Sevco either.

    Prognosis: doomed to financial collapse due to underfunded owners and lack of realistic probabilistic analysis of football returns/ revenues.

    Reason/ Root Cause: Jealousy of Celtic. Chasing Celtic. Obsessive Compulsive with Celtic.

  11. They cannot afford to buy McInnes’ contract.

    Why would he consider joining this imminent collapse business?

    They need King for tens of millions going forward each year. He says he’s penniless. Cold shoulder imminent.


    How can the SFA do business with CCK on a cold shoulder? The SFA is a limited company ditto SPFL, surely they need to ignore and avoid CCK? Turf him out the game?

  12. Add £2m Contracted and signed responsibility for Oldco RFC football debts to the £16m and you have £18m. (A cornerstone of SFA Membership for Newco).

    How many small trader invoices were kept in the bottom drawer from the Chartered Accountants? £1m? (They’re not debts until after the last day of 60 day invoicing :). ).

    How many secretive off balance sheet loans from Qatar or elsewhere are there?

    This Newco Club is desperately trying to buy success on very heavy debt in Scottish football. To the detriment of other well run clubs. The highest indebted club in the game. Why are the authorities allowing it? It breaks Financial Fair Play and it rag dolls sporting Integrity. The SFA seems happy with that. As a fan of a mid range club I feel sold out by the authorities. Each Sevco win is a debt fuelled sporting corruption.

    Are they paying taxes or running the latest tax scam?

    1. Those invoices are debts on issue if not being challenged. They just aren’t overdue debts until the payment terms are exceeded.

      On the off balance sheet financing, I noticed the secured debts in note 4. The quantum of assets it’s secured against £7.2m isn’t up that much from last season. Pedro’s spending hasn’t yet begun though I guess and it’ll be an area to keep an eye on should they live to issue another years accounts.

  13. There were several things that stood out to me when I read through the accounts last night. For background, included on my CV is the Chartered Financial Analyst designation, and I have firsthand experience with other firms dealing with several of the issues addressed below.

    (1) much has already been made of the £3M payment made to Ashley to rip up the retail agreement. If you look at page 45 of the report, you will see that Rangers Retail Limited earned slightly north of £1M after tax last year. The year before showed a similar, slightly smaller sum. 50% accrues toward Sports Direct, and 50% goes to RIFC. So the £3M payoff to terminate the agreement represents approximately 6 years of future profits that Sports Direct would have expected to receive. This is essentially a buyout. Ashley got the full value of the deal, upfront, guaranteed, and also the opportunity to sign a new deal for the same time period! This is a much different story than what was presented last June. Moreover, King arranged for Real Rangers Men to buy Ashley’s shares at 27p while he was preparing his defense from the Takeover Panel case. Remember, part of his defense is that the ‘market’ price of the shares is more than the 20p he would be required to offer, and nobody would take that offer. But the question arises, at least in my mind, whether that 27p was really the market rate at that time, and whether this should be treated as part of the cost of terminating the Retail contract with Sports Direct. Did King arrange for Ashley’s shares to be purchased at above market rates, and do so as part of the overall compensation offer of terminating the Retail deal, simply so he could create his own feeble defense before the crown?

    (2) Looking at the Key Performance Indicators on page 12, one thing that is conspicuous by its absence is any mention of the Europa League Qualifier played at Ibrox on June 29. That match is obviously part of the 2017-18 season, but the Accounts are for the 12 months ended June 30, not for the 2016-17 season. That’s a small distinction, but it matters to accountants and auditors. The revenue recognition principal is for matchday income to be recognized as matches are played. Yet there doesn’t appear to be any disclosure that Rangers recognized the revenue from this match in their accounts.

    (3) Page 36 outlines the assumptions they used in the forecast period when they tested for impairment of fixed assets (Ibrox & Murray Park) and intangible assets (brand value). This year’s disclosure is more detailed than prior years, and a couple points stuck out: (a) their baseline assumption is that they will make the group stages of the Europa League at least twice in the next 5 years, and failure to do so would result in an impairment charge against their fixed assets, and (b) their player salaries can grow by no more than 3% above their forecast or they will be forced to impair their assets. From experience, I can tell you that 3% for an exercise like this is considered rounding error. But more than anything, these two things indicate one major conclusion to me: their forecast assumptions are right on the breaking point of being credible and yet they just barely avoided an impairment charge.

    (4) Trade Receivables, disclosed in Note 14 on page 46, contained a detail that I found highly unusual, though not necessarily problematic. They are owed £12.5M from merchant service providers relating to season ticket sales. As this is over the summer period when season tickets are being renewed, that would be the likely culprit and an obvious explanation. However, IFRS rules prohibit the creation of a receivable when performance obligations have not been met — i.e. revenue recognized, assets transferred, etc. In other words, this £12.5M is cash that is owed to RIFC for matches played in the 2016-17 season. Going back to the KPI’s on page 12, total season ticket revenue was £13.6M in total for the season. It seems more than a little unusual that the overwhelming majority of season ticket revenue from last season still had not been collected by June 30. Something else must be going on here, and the obvious explanation is that it does indeed represent a receivable for the upcoming season. But that would be a pretty flagrant violation of IFRS accounting rules that a first year accounting student would spot immediately. Maybe someone else can chime in here…

    (5) On page 39, we can see revenue was £29.2M, and ongoing structural cash operating expenses consisting of staff costs, Other Operating Costs (policing, stewards, pitch maintenance, and other matchday costs), and hire of plant and machinery totaled £29.7M. RIFC are operating at a permanent, structural, cash flow loss. And that excludes expenses for player acquisition, regardless of whether one wants to measure that via amortization or cash outlay, as well as expenses for other capital outlays, interest expense, one time charges to terminate the Sports Direct deal, one time charges that occur annually to fire their manager and his staff, etc.

    (6) Lastly, the disclosure of NOAL and the relationship to King found on page 57 changed from prior years.
    Last year’s disclosure: “New Oasis Asset Limited is a company controlled by the Group Chairman, Mr D King.”
    This year’s disclosure: “New Oasis Asset Limited is a company in which the Group Chairman, Mr D King and his immediate family are interested.”
    When one looks at the last sentence of this year’s report, we learn that NOAL has extended the repayment date of their £6.7M interest-free loan to July 2019. Ordinarily, trustees would be obliged, by law, to invest the trust assets for a financial gain for the benefit of the beneficiaries, particularly if one of them is penniless. It’s a legal quagmire for the trustee, and the only way for the trustee to avoid any legal problems would be to obtain assurances from the beneficiaries, in writing, that they won’t hold the trustee accountable for such negligence. But one thing is for certain: I am sure that such consent has ABOSULTLEY NOTHING AT ALL to do with the change in language regarding one Mr D Kink being merely ‘interested’ in the trust as opposed to it being outright ‘controlled’ by him a year ago.

    1. On item five, it’d normally be offset by a liability in respect of delivering football to said fans (a credit entry) then slowly released at the revenue recognition point (as each game is played). The gig receivable (debit entry) you pointed out is receivable from one party and much quicker. It represents the cash collection not the revenue. Hope that helps.

  14. Are these accounts verifiable proof that TRFC ‘LIED’ to the SFA once more to gain a European Licence, when they claimed in their intermediate accounts that they had made a profit this year. They have NO shame and have been a financial basket case since inception in 2012. Putting the poor Club out of it’s misery would be the only humane thing to do.

  15. What an absolute farce.The pantomime continues,but for how long?
    The glib and shameless one says one thing,through his QC,to the high court a few weeks ago and then says the complete opposite,in the accounts.
    You couldn’t make it up!
    Why would the auditors sign off the accounts at the end of October when the first tranche of funding the shortfall is needed in November?
    They should have been strong enough and professional enough to insist on the shortfall being paid into the bank before signing the Audit Report!
    As indeed should have the other directors who have placed themselves in an invidious position should everything go pearshape.
    Why would any sane person want to be involved with this organisation be it as player,manager or director?
    Words fail me!
    Administration is definitely on the cards.

  16. Sevco win at home to tenth position Partick Thistle. But it’s regarded as a significant victory by SMSM.

    No mention of huge debt super fueled Sporting Advantage to Sevco. No mention of accounts.

    Are wee PT even full time?

    Languishing in fourth spot, I think Sevco may have reached their zenith. The big clubs won’t be so accommodating.

  17. Add in the extra £4m needed this year and £3.2m needed next year and loans are already at circa £25m as we’ll need way more than the accountants are opining on if we want to be competitive. Very unattractive to any potential investor. Admin 2 imminent. Also looks like King getting more in the driving seat as NOAL giving all the loan guarantees to auditors and Dougie and Graeme Park pulling back. Not good news.

    In Kings shoes I’d have delayed till the end of December so Lord Bannatyne didn’t see all this. I expect he already knows the verdict and it will be announced next week hence release of these terrible accounts.

  18. Just on the topic of the stadium – I can’t imagine any plausible scenario where the Directors and Auditors would both agree that there is no indicators of impairment. The roof connectors are shot and the council calling crisis meetings. That would mean an impairment review would be necessary. Given Glasgow City Council are never likely to allow anyone to use it for anything but football – that means it’s realisable value is what it can sell it to another team for (who?) or it’s value in use. To work out it’s value in use you use the cash flows from its operation in current use – which we all know is cash consuming rather than generating. These accounts scream of a lack of professionalism before you even get to the perilous financial position.

    The SFA should be calling an emergency meeting now to deal with an impending crisis and being lied to over interims. I won’t hold my breath. You wrote an article a year or two ago based on a comment I’d made about the more things change, the more they stay the same. The same car crash is happening in front of our eyes and the same blind obedience, lack of governance and dirty laundry is coming full circle. It’s Armageddon…..again.

    1. TJ, if not being being used by Sevco or AN Other club (both now seem highly unlikely) then the value is based on alternative use subject to Planning and, if it is permitted, demolition. Best case scenario therefore is a cleared site for say residential development at let’s say max £500k per acre post demolition. Not sure how big the site is but bottom line it will be very low quantum versus the crazy figures placed on it as part of the accounts (which I have not seen so that may have changed). If the stadium cannot be demolished to make way for new development then I suspect it is not sellable at any price; except perhaps to some historians who might wish to see it kept as a memorial to bombast, hubris and good old fashioned sectarianism……

      The car park opposite, IF they actually own it, also has limited value and ditto Auchenhowie, given it is within the highly protected Green Belt. So no alternative use and there’d you’d be looking for the Council perhaps to step in and run as a community venture , no big bucks involved whatever the outcome.

      Not to put too fine a point on it, they look royally fucked me. TS.

    2. TJ, the impairment testing in the accounts is a financial concept and not an operational one. The purpose is to simply measure the cash flow, discounted back to present value, that is derived from the relevant assets and compare that sum against the carrying value on the balance sheet. The physical state of the assets plays no part in the analysis unless there is sufficient evidence that the physical condition is so poor as to eliminate the possibility of receiving any cash flow from their use. But that is exceedingly rare in practice and would be something like a melted nuclear reactor. For purposes of the impairment test, it is assumed that dilapidated assets, such as Ibrox, will continue to benefit from regular maintenance capex.

  19. When a company receives less income than a spends it makes a loss. Rangers Lite are such a company. Loans of $15,900,000 followed by another emergency survival loan brings the debts to $19,900,000 and rising. After another 12 months at current rates the debt would be another $6,700,000. That brings the debts to $26,600,000. Do you see the problem? This is a debt laden company hoping for some financial miracle despite still losing money. I hope you have not loaned them money. If so you are a loser.

  20. The whole club and employees now rely completely on Dave King as the only benefactor left to throw in his private wealth to keep it going.

    Surely it’s over?

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s