Rangers: David Somers feared for chairmanship over Dave King offer

David Somers and Derek Llambias
Somers (left) with new chief executive Derek Llambias

David Somers was concerned that he would lose his seat on the Rangers International Football Club board if a consortium including Dave King was successful with a funding offer.

The RIFC chairman expressed his fears in an email to an associate of Sports Direct owner Mike Ashley.

Somers also asked why a funding offer had been changed to a "particularly stupid alternative".

Two weeks later, Ashley's £2m loan offer was accepted ahead of a loan offer from Brian Kennedy and the funding proposal made by the consortium.

In the correspondence, Somers referred to a "formal proposal of a deal from Dave King and my board are clamouring for a call to discuss it and no doubt approve it. A board on which James [Easdale] and I are a minority".

Somers also revealed that the consortium's proposal included board seats "which means Sandy, James [Easdale] and I will not survive on this board very much longer. Yes, you can vote them off at the next AGM but they can do a great deal of damage before then."

Describing himself as "very angry", Somers also said that he was prepared to terminate Sports Direct's retail contract.

The RIFC board was seeking funding to cover for a shortfall in season ticket sales. The consortium involving King wanted boardroom control in return for a £16m funding package. Kennedy was prepared to provide a £3m loan in return for security against the assets and one board place. Ashley's loan offer was also secured, and sought two board places.

Mike Ashley
Newcastle United owner Ashley has 8.92% stake in Rangers

The long-time Ashley associate Derek Llambias, who was previously managing director of Newcastle United - the club Ashley owns outright - is now chief executive of Rangers, having been appointed as a consultant then a non-executive director in the weeks following Ashley's loan offer being accepted.

David Somers responded to BBC Scotland: "The Dave King proposal started well but, as I stated, fell at the first hurdle of 'show me the money' and 'who are the eight people in your consortium'.

"Sadly this proposal quickly began to look more like one designed simply to impress the media rather than a proper proposal.

"The mystery to me is if Dave King really wants to support Rangers then why doesn't he buy some shares, then he can participate in rights issues? Or he could buy us a couple of players?

"It was worth a try but in the end we couldn't get a sensible realistic deal from anyone at that time despite my trying to put pressure on each of them to produce something sensible, so we had to opt for one of the two loan possibilities."

The Scottish Football Association has issued notices of complaint to Ashley and Rangers over potential dual interest breaches. The SFA rules do not allow individuals to hold stakes in two clubs, but the governing body made concessions when Ashley first took a stake in RIFC. He agreed to be bound to an undertaking, which including not having undue influence on the board.

Rangers now need £8m in additional funding and shareholders have voted in favour of a share issue in the new year. Ashley could underwrite the issue, but needs SFA approval to raise his 8.92% stake beyond 10%.

When RIFC held an open offer to existing shareholders last September, another associate of Ashley - Stephen Mucklow - was set to underwrite it. A draft RNS statement to the Stock Exchange was prepared to that effect, only for the underwriting offer to be withdrawn less than a week before the open offer.

On the day of the offer, Ashley also announced that he would not participate in the fundraising, which Rangers required for working capital. The offer raised a little over £3m.

Ashley subsequently spent around £400,000 acquiring Hargreave Hale's stake in RIFC.

Top Stories