Rangers: Winners & Losers From Another AGM
The wretched soap opera which has been based in Govan in West Glasgow for so many years now has come to a potentially seminal episode. Rangers International Football Club PLC held its first Annual General Meeting (AGM) after the company, which runs the new Rangers FC, posted losses of approximately an arm and a leg during its first year of trading; gargantuan losses for a Scottish fourth-tier football club with regular home gates of 45,000+ and all the more inexcusable given the financial circumstances which required the club’s formation.
The last AGM of “Rangers” shareholders, in 2009, was a chapter in a standard tale of financial mismanagement. The then-manager Walter Smith had said that Lloyds Banking Group were effectively running debt-laden Rangers. And this was manifested in the presence of one Donald Muir on the Rangers PLC board. Disaffected shareholders overwhelmingly voted Muir off on a show of hands. But this wasn’t the “right result” for the Ibrox powers-that-be. So the result was declared “uncertain” from the top table and put to a “card vote” in the style of supposedly archaic trade union block votes; whereupon majority shareholder David Murray’s block vote of 90 million-ish made the result less “uncertain.”
It was much the same outcome in 2013, in that the will of the people (which Rangers fans claim “we are”) were thwarted by the card votes of RIFC’s “institutional” investors. Unfortunately this standard tale of financial mismanagement has shattered into a thousand tiny pieces, all passionately argued in inverse proportion to their relevance to the real issues. And even though the current board were re-elected with clear majorities, those arguments might not be laid to rest by the AGM result. Whether the current Rangers is a new club or a new version of the old club (and regular readers will guess my view on that) it is NOT the old club in terms of financial clout, despite the huge home attendances. But it has acted during its first trading year as if it thinks it is.
This could have been a show, to cover the solely money-making intentions of Charles Green’s overpaid executives and publicity-shy investors. Or because, as Walter Smith said in October, in the wake of the accounts’ publication: “There is no common business sense. You can’t sit on the board and tell people ‘we can’t afford to do this.’” Either way, £14.3m went out the Ibrox door before June 30 2013 and plenty more has gone out on the highly-paid squad cakewalking the current third-tier in Scottish football. And it is, technically, that record on which the current Rangers board were re-elected. Of course, and some might say alas, the issues are way more complex than that. The very heart and soul of the club is at stake, apparently. And there were two distinct groups fighting for board control; representing the current board’s failed business model and the previous club’s failed business model. Thomas Hobson had a name for it…
The AGM agenda made the precise make-up of the board a little less predictable than might normally be the case in the club’s current circumstances. There were 14 resolutions. Four facilitated the re-appointment of the current board, namely chairman David Somers, Chief Executive Graham Wallace, Finance Director Brian Stockbridge, Non-Executive Director Norman Crighton and Executive Director James Easdale. Another four facilitated the appointment of the four “requisitioners,” the unrelated Paul and Malcolm Murray and Scott Murdoch and Alex Wilson. They have been labelled “requisitioners” because in August they “requisitioned” a general meeting to facilitate new board appointments but have had to wait until now to put themselves to shareholders for election.
So, in theory, particularly disaffected shareholders could have opposed those resolutions and left the Rangers “Blue Room” with even more empty seats than it has had for most of this summer. Or they could have voted the lot in and watched directors’ expenses budget creak under the weight of “tea and biscuits for nine” and the company’s work grind to a halt as they argued over whether the biscuits should be digestives or hob-knobs. In the meantime, resolutions 9 and 10 attracted relatively passing interest, yet were probably more important to the company’s post-AGM future and, with one of them having been passed (and to the potential dismay of many of you) they are worth an article all their own. Here, though, were the winners, the whingers and the waifs and strays in the board vote.
THE WINNERS – THE “SPIVS”: The Board have been labelled “spivs” by the numerous “enemies of Rangers” which apparently pervade Scottish football and its media. The nickname stems from Green and has applied to all directors believed to have direct or indirect links with him. His shares now belong to “activist shareholders” Laxey Partners and executive director James Easdale, with key figures from Green’s original consortium proxying their shares to James’s brother Sandy. So, no Green influence there. But the “spiv” label remains. And if the label is appropriate at all, it more appropriately applies to the well-remunerated directors and ex-directors during RIFC’s first year than to some more recent appointments.
Ex-commercial director Imran Ahmad, who believes he’s owed a cut of every commercial deal RIFC did during his time, and has the slimy, self-confidence to test that belief in court? Appropriate. Finance Director Brian Stockbridge, he of the £200,000 bonus for a Scottish Third Division title that had SFA to do with him, while overseeing a £14.3m loss? Appropriate. James Easdale, the “bus tycoon” who hasn’t been done for VAT fraud? Appropriate. Charles Green? Dictionary definition. Craig Mather was an honorary spiv, although his pay-off after five unimpressive months as RIFC CEO was of spiv-like proportions. He did invest close to £1m in RIFC – though if he had a £ for every time he mentioned that he’d have got his money back and a few quid for the trouble.
As for the new appointees… There is a consensus – & I think it is a correct one – that Graham Wallace is a very good appointment. And his AGM vote reflected that. His football history suggests that he’d be a better replacement for Stockbridge than for Mather and the requisitioners’ claim they wanted Wallace as Chief Financial Officer. But at least he has a football history. Some of the announcements of and comments on Wallace’s appointment almost portrayed him as equally influential to Manchester City’s recent successes as any of Sheikh Mansour’s multi-millions. A better perspective on his time at the Etihad comes from Guardian journalist David Conn’s 2013 book Richer than God, which expertly assesses the Mansour regime. In chapter one, Conn gives us a verbal tour of the Etihad “chairman’s lounge.” He notes that “Graham Wallace, chief operating officer, responsible for the inner details of the financial operation, is there” and… doesn’t mention him again.
Non-executive director Norman Crighton has been less “the admirable Crighton” than the invisible one, thus far anyway. No bad thing, some would argue. And new “independent” chairman David Somers has done much to back that argument in his short time at RIFC. The stand-out comment from his “open letter” on December 6th was that until his appointment Somers “had never heard of Charles Green, Imran Ahmad, Craig Whyte, or any of the other characters in Rangers’ history,” a claim he repeated at the AGM. This seemed an excessive, unlikely response to what he termed “wild accusations that I may not be independent.” But Somers has lived in the small Sussex village of Wadhurst for 20 years, so the Rangers horror-show could have escaped him. Rangers’ story has not been a big deal in England, which has its own over-spending Rangers, managed by Harry Redknapp (so, no spivs there…).
More remarkable for someone attempting to establish “independence,” was Somers’ sustained attack on the requisitioners’ concerns, which he dismissed as so many “bogeymen” and the muddled, if spirited, defence of Stockbridge, based on “reading the (board) minutes of the last two years or more.” Somers claimed “it is not that Finance Directors make mistakes, rather that boards make mistakes…finance directors are members of boards and their actions are largely dictated by the board.” Yet, “without Brian, the club would have been de-listed months ago.” In other words, Brian was only obeying orders…but should get the credit while others takes the blame. RIFC, may I remind you, lost £14.3m in its first, thirteen-month financial year. In case you’d forgotten.
THE WHINGERS: THE “BROGUES”: Brogues are sturdy walking shoes. These are sturdy “real Rangers men.” Some may view “Brogues” and “Rangers men” as respectful labels. This is not the intention. Chief brogue/requisitionist was “near-billionaire” Jim McColl, perennially linked to Rangers takeover rumours old and new thanks to his wealth and declared blue nose. McColl himself was a candidate this time, until the investors whose investments he manages for a living requested that he spend more time with their money. The remaining candidates’ introductory speeches to a fans meeting in Glasgow on November 28th soon turned into a “Four Yorkshiremen” sketch in reverse, with each candidate trying to outdo the previous speaker’s “Rangers-ness.”
Alex Wilson’s grandpa took him to his first game when he was six and Scott Murdoch had been a season-ticket holder since he was four and had a “Rangers room” in his mother’s house. At that rate Malcolm Murray might have claimed to be a Rangers fan since he was a foetus. Instead, he said he had a “dog named Baxter and a son named Greig.” This went down well with the masses, which needs no further comment. The Brogues published an eight-point “Nominated Directors Constitution” on December 4th promising, amongst other things, “total transparency in all club affairs,” that Ibrox would never be sold as part of a solution to any cash crisis, “fan representation on the board” and that “non-executive directors’ fees will be waived unless the club is in Europe.”
Murdoch had stronger words for Stockbridge: “one of the worst (directors) we’ve ever had up the marble staircase.” He would “happily” work with directors such as Wallace but “certainly wouldn’t sit on a board alongside Brian Stockbridge.” And he also said of Somers “If you were independent, surely you would ask (Stockbridge) to leave.” Wilson also promised that “we have 3-4 people who are wealthy individuals who have approached us and said they will put money into the club if the board is trustworthy and clean,” i.e. devoid of Stockbridge. Brogues critics cited their collective lack of significant shareholding. If they really wanted control, they should have done it the “proper” way – invest in the club and buy shares. But this wrongly assumes that there are currently shares to buy and shareholders willing to sell.
It also wrongly equates the purchase of shares with club investment. When Green offered to sell his consortium’s shares to McColl for £14m in August, McColl had to explain why the money would end up with Green and not RIFC. The Brogues want to run the club, not buy it. And to do that, they required the support of 50% + 1 of the shareholder base, however many, or few, of those shares were theirs. The Easdales have become seen as the most influential individuals at Ibrox at present through obtaining voting rights for shares, not the shares themselves. Sandy Easdale owns 4.52% of RIFC. But James Easdale is the RIFC director, and he doesn’t.
THE FANS: Rangers supporters collectively own 12% of RIFC. So a unified shareholder fanbase would have had the balance of power in a relatively close vote. Rangers supporters, though, only seem to unite in confronting their Club’s omnipresent “enemies.” There have been countless calls in the build-up to the AGM for a “unified” supporters body, capable of maximising supporter/shareholder influence; often from supporters labelling themselves “independent” and railing at existing supporters bodies for “not speaking for me” or having egomaniacal leaders and spokespeople. The Rangers Supporters Trust is actually constitutionally designed to produce a single voice for supporters at shareholder meetings. Trust members proxy their shareholding to the body, which votes as the majority of its members see fit.Unfortunately, the RST has proven wholly unfit for this purpose, seemingly unwilling to organise the fanbase into a coherent unit. An opportunity lost.
THE INSTITUTIONS: Among Green’s more fanciful claims when garnering support for the Initial Public Offer (IPO) of RIFC shares was that supporters could “own their club” (which was wrong by…erm…three words) while no individual or body would control more than 15% of shares. Supporter-shareholders’ place in the Rangers power structure was exposed by the £17m “institutional investors” raised at the IPO compared to supporters’ £5m. So it is that the institutions have been running the RIFC show, ran the AGM show and will continue to run the show. Institutions such as Laxey Partners, whose policy is to maximise shareholders’ financial return. In August, Laxey said they would support the “supporters’ clubs’ wish on votes which we believe is to change the board.” On November 22nd, co-founding partner Colin Kingsnorth excused a volte-face on Laxey’s voting intentions with lies about supporter disunity and lack of representative clout: “101 supporters groups” with “102 opinions.”
But the real judgment was based solely on their financial interests, as it had been at companies such as “British Land” and “Alliance Trust.” Had a pro-requisitionist vote suited those financial interests again, Kingsnorth would have volte-ing his face again. Incidentally, Laxey agreed to purchase 700,000 of Charles Green’s shares under an agreement entered into on 19 October 2012. Green purchased his first tranche of RIFC shares twelve days later. Laxey Partners are now RIFC’s biggest shareholders. Green no longer has any influence over RIFC.
ALLY McCOIST: Question one for the big man at the AGM ought to have been “how’s that pay cut coming along?” Meanwhile, “Sally’s” public pronouncements on non-footballing matters have never registered on any recognised scale of common sense. But his voting intentions apparently caused him considerable inner turmoil. He bought a million RIFC shares for a penny a pop – a price they are steadily approaching again. So for an investment of less than his, as yet uncut, weekly remuneration, he bought a shareholding which would have been key if the voting this week was at all close.
He suggested on November 23rd that it would be “committing suicide” to vote against the current board but simultaneously claimed that he “hadn’t made up his mind yet” on how to vote, suggesting that life in the lower leagues was really getting him down. This week, it seemed as if he’d solved his dilemma by giving his voting rights to his old local Rangers Supporters Club in East Kilbride. However, the bonkers simultaneous claim this time was that he was honouring a pledge made when he bought the shares…last October. Thus making a nonsense of everything he’d previously said on the subject. I guess the major surprise here is that we are surprised at all.
KEIRON PRIOR is the 2.3% shareholder to whom the Daily Record newspaper, and Rangers-supporting journo Gary Ralston, devotes considerable attention while nobody else seems to give a flying foxtrot about him. Prior’s unfeasible-sounding IQ of 234 sounded more unlikely still after he announced his voting intentions. Apparently confusing Friday the 13th with April 1st, Prior told Ralston at the end of last week that he was going to vote for a board of no-one whatsoever. The headline was his vote against Stockbridge – never the Record’s favourite director – while he added that he would vote against James Easdale and Norman Crighton and abstain on the resolutions to appoint the requisitioners. And he announced plans to take his shareholding “above 10% within the next six months” and then “maybe to 15% and I could become the biggest individual shareholder at the club.” For now, at least, to be filed under “so what?”
THE MEDIA The saturation coverage of Rangers’ woes in the last three months have made it easy to forget that the first hints of the financial woes didn’t appear in the mainstream media (MSM) until August, over a month after the end of RIFC’s loss-laden financial year. The MSM have not had a good boardroom war, especially the Record’s long-standing support for Paul Murray. Basic errors, e.g. quoting McCoist’s annual salary as £850,000 (the figure in the accounts, which covered THIRTEEN months) persist. And if you used the BBC to make sense of the Easdales’ acquisition of shares and/or voting rights, you’d be mightily confused. A hat off, however, to the Irishman called English who writes for the Scotsman. Mulling over the number of people with Rangers’ “best interests at heart,” Tom English wondered “what state the club would be in if all these good Samaritans weren’t looking out for it.” Well, I laughed.
CONCLUSION: Thanks to a count of proxied votes accidentally falling out of someone’s pocket while they were stood near a BBC journalist, the result of the board elections was second-guessed on Tuesday, with the size of the victory the only remaining item of debate. Such is the mistrust of Rangers’ media strategy that it was assumed combative media chief Jack Irvine leaked the result to dissuade small shareholders from casting a meaningless vote at the AGM and, just as importantly, turning up armed with awkward questions. Yet even if the board had lost, the spending has to stop. Rangers have no bank debt because they have no bank credit. If the money runs out, that is that. Again. Rumours are surfacing of a review of Ibrox operations, with redundancy rumours being denied before they’ve even surfaced. And this might indicate that the “business common sense” Smith suggested Rangers lacked is beginning to prevail.
It is far from certain, though. For a club that prides itself on dignity, this board election campaign has been achingly ironic. The internal politicking which dominated RIFC’s first year may continue, especially after the combative nature of recent months. Of course, my natural instincts would have been to refuse to piss on any of the nine candidates, even if they were on fire. But it would not surprise me if many Rangers shareholder-supporters thought the same.
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