Soft loans to avert a cash crisis

As we now know, Dave King’s Rangers require soft loans to balance the books this season. The problem of a business model predicated on other people’s money is liquidity. In the past, David Murray would turn to Octopus Investments (Ticketus) to address end of season cash flow concerns. This avenue is no longer open to the club due to the £17.1m currently owed by our former CEO.

Despite the best efforts of Murray and Gilligan, the Royal Bank of Scotland will not be emulating the largesse of The Bank of Scotland. The latter is little more than a trading name of Lloyds. Our current banker, Metro Bank, will not provide an overdraft facility. Sports Direct (SD) turned down Murray & Gilligan’s pitch for the second tranche of £5m. The lie that this was not required was Murray’s mendacity at its most blatant. He and Gilligan went cap in hand to SD. They left with a terse reprimand and a reminder that their current £5m was now in default due to RIFC’s suspension and subsequent delisting on AIM. SD could appoint receivers at any time of their choosing.They have chosen not to do so as Rangers represent £7.8m in turnover, with minimal overheads and no risk on unsold stock. The benefit to RIFC in the last fiscal should have been £400,000, but this was offset against the losses incurred by the long term leases at the former outlets in Glasgow Airport and Belfast. Rangers Retail also had to accommodate £300,000 of costs at Puma. If truth be told, the only benefit was an accountancy trick that allocated the £7.8m turnover to revenue. This was done on the dubious grounds of the 51% ownership of Rangers Retail, where the reality is that they only had 34.23% of the voting rights and control. I wonder if RIFC’s  third auditors will attempt to shoehorn this turnover into the latest accounts, that were due at the end of September, despite only 17.45% of the current voting rights and control?

The North American Rangers Supporters Association was Paul Murray’s next port of call. He was accompanied by his wife and he met up with Gordon Taylor, who was a guest speaker. His pitch that Real Rangers Men were at the helm was well received, but everyone present knew that without King’s promised £30m the business model was a basket case.

Three of the concert party, Taylor, Park & Letham, provided £3m and then awaited £1.5m from King. Since this was not forthcoming, Douglas Park resigned from the board. They have grown tired of bankrolling King.There is informed speculation that King bought his equity via loans provided to New Oasis Investments.

Which leaves us with the supporters’ collectives of Rangers First and the Rangers Supporters Trust. There is no-one else. King’s lie that the business was comfortably funded was based on expected RBS and NARSA funding, with Richard Gough pitching to the latter and Paul Murray playing golf with the chairman of the former.

Will King currently be engaging in a dialogue to ensure the shortfall in funding is addressed by RST/RF prior to their renaissance as Rangers First CIC? I cannot envisage any other reason for King being in town.

So despite the bluff and bluster in regard to challenging for the title next year and European football the following, King knows that if Green prevails he does not have the £1.5m that he has estimated it will cost. The question that someone should have asked him is how deep are the RST/RF’s pockets. If they are not as deep as King expects, then W&W will have to make do with more loan signings in The Scottish Premiership. King clearly stated that this was the option that he preferred. What he did not say was that it was the only option he could afford.

The leak to the Scotsman that Rangers had a plan in place to pay the £1.5m of Green’s costs was very clever PR. If Lord Tyre sat down to his breakfast this morning with The Scotsman, he may demur should Green’s counsel seek to ring-fence £1m of his expected costs. He may be persuaded by Anderson Strathern’s argument that a £1.5m cap should be imposed. This is very cynical. Ordinarily I would look for the unseen hand of James Traynor at Level 5, but the austerity at Ibrox seems to have claimed its first victim. If RIFC are no longer prepared to engage with Level 5, they will have lost their only client. I could write much more than this but I will not expose myself to litigation. Suffice to say that Chris Union Jack’s puff pieces are currently thin on the ground. It would be a crying shame if he were forced to work for a living.


As is now becoming a common practice, I will highlight one of the more pertinent contributions that I have received since inception on 19 September. I currently have over 750 to choose from. I do not doubt that many of the 85,000 visitors to this site read the comments. With 300,000 hits in just over five weeks, this cannot be solely attributed to leading articles. The following comment, from a new contributor, deals with perception:

“The problem is, like any business which is struggling, is that the public face and public utterances will give no indication that anything is wrong. Many businesses pay on extended credit lines of 45 or 60 days so non payment until then won’t cause a creditor to issue winding up notices. Usually the first time anyone has any concrete proof that the business is about to fold is either the arrival of a bunch of administrators who promptly lock the doors or the non payment of wages or taxes. HMRC give you a bit of leeway, but not much. Hence in public, there’s nothing to see, exactly why the loss of the AIM listing played into DCKs hands. The non appearance of the accounts raises some red flags, but to most people that’s not an issue.

However, those of us who can add up and read accounts to see the details behind the guff from the chairman on the front page can clearly see RIFC / TRFC is in deep financial trouble. Most of the ST money gone, no more until May 2016, monthly outgoings exceeding income by a fair way, no loans from any source, no chance of a share issue (rights issue or otherwise), court cases to force payment of huge legal fees, most of the heritable assets already hocked to MA, no one of any intelligence with deep pockets trusting a word DCK says, but somehow the train keeps rolling.

The thinking people reckon it’s rolling off a cliff, but it’s fair to say the passengers can’t see out the front and only a few are sticking their heads out of the window to see, of which JJ is one.”

My head is out of the window and I can clearly see the fiscal cliff on the horizon.

King is good at lying and misrepresentation. He and his fellow white collar criminal ,Greg Morris, passed themselves off as accountants, and set about exploiting the nascent Johannesburg Stock Exchange to their advantage. If quarterly returns were not positive, they just made them up. King would buy shares held by asset managers so as to maintain the equity price, while siphoning off millions of shares that he sold to major banks, and others including an orphanage. These shares were soon worthless. King does not discriminate on the ‘mug punters’ that he rips off. If they have money, as is the case with the RST and RF, he will lie and cheat his way to procuring it. It’s what he does best.

The misrepresentation of information at King and Morris’ latest venture, Micromega Holdings Group, takes their mendacity to a new paradigm. If you were unfortunate enough to visit their website, you would be assailed by positive bullet points. There is even a live feed of JSE price movements to give the impression of corporate gravitas.

However the truth behind the smoke and mirrors is not difficult to find. The global credit crisis of 2008, and the rapid devaluation of the Rand, has had a detrimental effect on this business.

MICROMega comprises four divisions, namely Financial services, Support services,  IT and Automotive. In the latter earnings were flat and profits were pared to the bone. Morris admitted that automotive is not a core competence and is trying to sell this division.

In IT, Cloudware is showing promise but making only a marginal contribution to the bottom line.

In Support Services,a real-time meter reading system, hosted on cellphone technology, is being used by 50 municipalities, but profits are minimal. Nosa Employment, which places safety managers, is washing its face.

Last but not least is Financial Services. MICROMega Securities, an inter-dealer broker in bonds, derivatives and the rand, is a throwback to the corporate larceny of old. No other reputable financial services company will do business with King and Morris, but there are plenty of disreputable companies on their books. I understand derivatives. I posit that neither King nor Morris have the first clue about them. They give the impression that they do.

King has adopted a similar approach at Rangers. We have had the myth of Real Rangers Men and The Generations Pitch. We are now on the cusp of Rangers First CIC. The latter has four divisions, just like Micromega.

The market in South Africa is monitoring every move made by King and Morris. They are pariahs with a track record of criminal activity.

However, at Rangers, 50,000 fans and a compliant media, have ignored all the evidence about King. There will be the usual shock and indignation when the wheels come off. But this time they cannot reach for the defence that they were not warned.

Piercing the corporate veil

When King set up his myriad of tax evading trusts, it took twelve years of forensic accountancy to bring him to book. One of the finest legal minds in South Africa, Gilbert Marcus, was employed at considerable expense to delay judgement day with 7 petitions to the South African Appeals Court. Ultimately King had to grovel in court to escape prosecution for the numerous fraud, racketeering and bribery charges that he faced. His corporate veil had been successfully pierced.

King has created another corporate veil to conceal the fact that he has no appreciable wealth. Even Keith Jackson, our former under 14s player, is remarking on 284 days of corporate silence. There is no more talk of £30m of investment from King. The rhetoric now is the urgent need to find £3m just to keep a team on the park. All the sterling efforts of W&W may be undone due to King’s lies.

The inescapable fact remains that it costs £2.5m to put a team on the park every month. The six months interim accounts, published on 31st March,specified operating expenditure to 31/1/14 of £16.1m. Removing eleven highly paid players from the payroll, one of whom was earning £950,000 per annum, resulted in savings. But not one of them was sold to offset costs.These players were commanding salaries of £3.8m, yet had no resale value.

They have been replaced with four modest acquisitions and three out of contract signings, not one of which could be sold for £800,000 as was the case with Lewis McLeod in January. The hype about Wahgorn and Tavernier will not yield significant resale values. Both were playing in English League One last season and neither could command the fees of £200,000 paid by Rangers.

The revenue to year end was £13.1m. This was predicated on 24,500 season card sales, including the half season and end of season promotions. Eight thousand more in sales this season should add £1.8m to this total. So had we not engaged Level 5 for a figure north of £600,000 or gone to court with Ashley and now Green, our six month deficit could have been as little as £1.2m. However it currently stands at £2.5m and should we add the expenses culture of the board, who would always avoid turning right when boarding a plane, we are probably looking at a minimum of a £3m deficit.

King does not have this amount. The speculation, that the RST have stepped forward with the shortfall of this month’s payroll, has not been denied. However this is merely a sticking plaster. If Green prevails on the 13th, as everyone expects, the immediate hit will be circa £500,000. His counsel may even argue for a further million to be ring-fenced as the shyster board is running on fumes.

This is the reality of an underfunded hostile takeover. King hoped that NARSA, Sarver or Kennedy would buy into his lying rhetoric. However, these are smart businessmen who have become wealthy by avoiding criminal spivs like King. King hoped to raise funds, this month, on the PLUS exchange. To no avail.

The last RNS of the old board was the most clinical character assassination I have ever witnessed. The haste of WH Ireland to disassociate themselves with King did not escape the notice of the square mile. Mike Ashley issued an excoriating statement on King and called for an EGM to expose the lies of King. Former CEO, Mr Llambias, told the press to ask questions as to the source of King’s money, as every known analysis lead to one inescapable conclusion.

King is playing Rangers like a one-armed bandit. He keeps coming up with plums.

Explosive Rumour.

I would like to thank our regular contributor Gordo for information in regard to a rumour that the RST and the shyster board met in secret to discuss the possibility of a loan to meet this month’s payroll. My first port of call was to establish whether Phil Mac Giolla Bhain was the source of this conjecture. I can confirm that this is not the case.

I have unequivocally stated on this site that the cash cows at the RST and RF would be the obvious targets for the man that has no shame. However if this meeting were to be confirmed, a meeting that is being openly discussed in the Rangers community, then serious questions on corporate governance should be raised. We now know that King plans to pick the pockets of fans via his Rangers First CIC initiative, but this will not kick in until a majority of votes approve his latest larceny.

Taking an advance on this would surely call time on those who cling to the belief that King has £30m at his disposal. He might have had 30 million Rand, but for some reason he did not put this toward the £1.5m shortfall in the promised £4.5m. Is it possible that Taylor, Park & Letham bankrolled the £3m and that King reneged on his part of the bargain? Regular King watchers would not be surprised by any short-cons by our career criminal chairman. Gordo kindly provided a comment from a third party that represents a growing consensus of disaffection with King. I took the liberty of adding a light touch edit.

“In regard to Mr King I can never understand the true meaning of his statements. Given that King has a controlling interest,  why does he need to pursue the shares of others (with money raised by the supporters collectives)? Perhaps he’s aware that the US fans take the view that he hasn’t been as transparent as he first told us he would be? I am concerned because I’m a fan. I bother because people like King, Murray, Whyte & Green have shafted our club over many years leaving us in a position that we couldn’t even pay a bloody face painter. I will criticize anything and anyone who I feel is not being open and truthful in their dealings with our club. Unfortunately like many others I did nothing previously and look how that turned out? I state the bleeding obvious. It’s there for all to see:
1. The team are playing well and will walk this league.
2. Our manager and backroom team are now upto the task/job at hand.
3. Fans are back and enjoying what’s on the park.
4. No accounts
5. No Stock exchange trading.
6.No investment just loans.
7.Our AMBASSADOR  Richard Gough being sent out with “begging bowls”
8.No openness, no transparency
9.No vast wealth on “tap” in fact no vast wealth full stop.
This time next year we will be in a different league and I for one feel it will be around mid table position, which would be more than ample in this stage in re building. stop looking for bloody millionaires to “bale us out” as it will end in liquidation again” 

The £4.5m Myth

During the period of sustained lying prior to the criminal-led acquisition of Rangers, much was made of the £4.5m that would be loaned to Rangers, repayable in December. However to date, all that has been loaned is £3m.

On March 26, a loan of £1.5m from Douglas Park, George Letham and George Taylor was confirmed

On May 22,  New Oasis Asset Limited provided a further £1.5m.

During the sustained mendacity, a figure of £30m was provided by King, with £20m from a slew of well-heeled investors who were, according to King, keeping their powder dry until a tax-evading criminal was appointed as chairman. No venture capitalist would be seen dead in the company of King.

The North American Rangers Supporters Association (NARSA), were assured by Murray that the shyster board expected £12m/13m in season card receipts. NARSA demurred. RIFC actually realised only £7.4m, so they were wise not to invest on Murray’s Myth of £13m. If Rangers had sold every single season ticket, and not just 33,000, they would have yielded £11,684,400. Murray returned to Glasgow with a tan and little else. It must be agreeable to take your wife on a two week five star vacation to California with the justification of an evening pitch to NARSA.

So where is the missing £1.5m?  Let’s have a closer look at the £1.5m allegedly provided by King. What the statement said was that a loan had been agreed from the company that held King’s 14.57% equity.This falls short of saying that it comes from King.

This £3m was essential to get the club to fiscal end on June 30. With the £400,000 in costs incurred at The High Courts of Justice, and the expected £240,000 this month as a precursor to significantly more, the missing £1.5m would have provided a level of comfort.

King & Murray’s lie of £4.5m until December has never been challenged.

What has been challenged is King, Taylor, Park & Letham’s alleged concert party activity.This complaint was made by a major shareholder who is far from pleased with their loss of a listing on the Alternate Investment Market.

Comfortably Funded?

The transparency that was promised from our mendacious shyster board has been unfulfilled. This is why so many of us must read between the lines and dismiss almost everything from the Herald Group due to their commercial relationship with Level 5. The fiscal challenges of this season would not have been insurmountable had any of the principals been willing to put more than a £4.5m loan to equity on the table. However we now know that almost all of this amount and ST receipts has been expended. Our cash position prior to the QOS and Livingstone games was just £170,000, with pay at the gate receipts after tax and policing costs earning circa £400,000. Match day spend and catering (which is outsourced to Azure) delivers circa £192,000 for crowds of 45,000 or more and circa £72,500 from the 17,300 a the Training Cup QF.

Player’s payroll, which is now only paid for 11 months in every year due to King abolishing paid leave, is circa £455,000 per month with employer’s NI contribution of circa £63,000.W&W, including NI, draw down £36K per month. and we should assume a similar amount for salaries to our MD & company secretary.

So all that would be left would be £244.500 to pay the club doctor, the ASA director, Ian Durrant and other coaching staff, admin staff, utility bills and finance costs. I predict that there will be no cash in the Metro Bank account at month end. November will be another precarious balancing act, with significant outlays for litigation to consider. Should Green prevail, then there is no possibility of balancing the books.

Green’s costs will expose King. The revenue stream that he hopes to glean from Rangers First CIC will not deliver until the end of January. Three months of a hand to mouth existence was going to be tight, but if Green’s contract is as iron-clad, as many believe, King will be forced to call George Taylor or Douglas Park to ask for assistance. He has already tried their patience by not bringing anything to the table. He continues to owe one or both of them £2.5m for his equity. The £1.5m that he was alleged to provide was a lie. Taylor and Park have put up £7m of the £8m required, so will be loathe to provide more funding to King and will be growing impatient with his ‘technical difficulties’ in South Africa. This is why Douglas Park stepped down from the board as he saw himself being cast as King’s banker of last resort.

Next season will be even more difficult. CFC’s revenue is circa £60-£75m, with the higher figure contingent upon CL group stage participation. Their player budget is £30m. They consistently buy players at £1m-£3m then sell at £10-£14m. As we discovered with Scott Allan, all we could offer was £175,000 plus improbable CL add-ons. Next season will be no different due to the paucity of the board.Achieving a place in the top six will be difficult, as Hearts, Aberdeen, St Johnstone and CFC are superior. ICT and Ross County will be vying for the other two places.

King has offered a bonus of £25,000 to each player should they remain in the top tier. However, given that he removed their holiday pay, which will be £20,000 this season and £32,000 in 2017, they will still be out of pocket.

Desperate measures from our desperate chairman.

Junk Bonds on the fly

Junk bonds are a high-yielding high-risk security, typically issued by a company seeking to raise capital quickly. By offering shares that he does not currently own, on an exchange where his toxicity precludes a listing, King is effectively issuing junk bonds on the fly.

What he is offering is a promisory note to a new group created to provide an income stream, including donations for non-share buying purposes. King controls the supply, while Rangers First CIC focuses on the demand. Every direct debit in the new organisation is then effectively owned by King. He can and has dressed it up. He has even specified a board of six to eight individuals. These of course will be the usual pro-King suspects.

King does not want two groups of individuals buying shares from existing shareholders. He does not benefit from that. What he wants is for those fans to buy junk bonds/promisory notes that will be traded in for equity at some unspecified future date when an ISDX listing might exist. Everyone knows that the assets will be in dispute and that King could not pay off the SD £5m warranty. King cannot deliver ISDX now, and will not be able to do so until the court case ends, and any challenge by BDO on behalf of the creditors is settled. There is also the not insignificant problem of his tax evasion convictions.

The risk here is exponential. The reward is giving King more of your hard-earned cash to compensate for the fact that he lied and will continue to lie ad infinitum.

Of course there will be the occasional blazer for those members of the CIC board who are the best earners. Bonus Broxi points will be earned for any donations made that don’t actually require a bond in return.

There is even provision for defending the club. I assume this means gagging dissenters, banning journalists like Spiers for telling the truth and smearing social network commentators with created fictitious alter-egos.

However what about Level 5. Are they not currently engaged in a lucrative contract to defend the club? Has King decided to call time on his coup d’etat architects and allow Chris Graham free rein at CIC?

The club raised £1.5m from an equity issue last year, when we had a listing on AIM. King wants this and more from the supporters groups as soon as possible.

Does no one ever tire of having a lying spiv on our board? He came in with a promise to deliver £30m to maintain Ibrox and invest it on the park. Now he wants us to do it for him.

All those who believed King’s lies should form an orderly queue to apologize to the members of this site who wake up every morning and smell the coffee.