Zappa

By Chris Graham | Contributor Much of the focus in the past two days has rightly been on the release of the audited accounts for Rangers. There is much analysis still to be done on these and they arguably raised more questions than answers but I will leave the detailed analysis to those better qualified than myself to speak on such matters. However the old adage about certain days being good ones to release bad news was taken to new levels by this current board on 1st October 2013. Not only did they pick the day that Celtic played Barcelona to ensure that scrutiny of their various releases to the London Stock Exchange (LSE) would be minimised, but they also clearly knew the accounts would be the main topic of conversation. Now the accounts were woeful. Let’s not beat around the bush. Mather and Stockbridge can try, and have tried, to put a brave face on it all but only an idiot would accept that the club has been run well over the last 12 months. Huge director salaries and bonuses, IPO costs around 25% when the standard is around 5%, non-playing staff costs dwarfing those of the playing staff (a unique proposition for football clubs) and the IPO money gone in less than the space of year. The spin that our two esteemed executive directors have tried to place on these matters over the past two days has been bizarre to watch, but that is for another article. There were no less than four releases to the LSE by Rangers on the 1st October. One was the aforementioned annual results and notice of the AGM to be held on the 24th October at Ibrox. A small side point here – if you are a shareholder make sure you attend and vote in this AGM. If you can’t attend then make sure you find a way to proxy your vote to either a group like the RST or a friend who can attend for you. If you bought your shares from a broker (after the IPO) then make sure you contact them and inform them of your wish to attend the AGM and vote – they should be able to advise you what you have to do. The second notice was about Charles Green finally disposing of shares beneath the notifiable level of 3%. Many pronouncements have been made over the past few months by both Green and the Easdales about the disposal and purchase of these shares but most of them have failed to materialise on the LSE website. Despite the best efforts of their media and blogging mouthpieces, the levels of shareholdings announced via those mediums still do not tally with the situation as announced to the LSE. It now at least appears that some of Green’s shares have indeed been sold, breaking the lock in agreement with Cenkos, although Green’s assertion that he no longer has any financial interest in Rangers is difficult to verify. I certainly won’t be taking his word for it. The third and fourth notices are probably of the most concern though and were clearly released in the hope that they would be swamped by the news of the accounts and the incredibly #brave actions of our chums from the East End in another Champions League defeat. To some extent this has worked. First of all it was announced that we have parted company with our second nominated advisor (NOMAD) in the past year. Strand Hanson took over from Cenkos and are the advisers who were used to block the suggested compromise deal to add Sandy Easdale, Paul Murray, Frank Blin and John McClelland to the board. It would appear things have become too hot for them and they have now been replaced by Daniel Stewart who previously acted as brokers for Rangers. A number of things are concerning about this: Firstly, the fact that we are now on our third NOMAD in just under a year is virtually unheard of. Cenkos are generally regarded as a top notch NOMAD in the City of London and the circumstances of their departure are still unexplained. Strand Hanson, without being unkind to them, were a step down at least in terms of reputation. Daniel Stewart are a further notch, or several, below that. By their own admission they are incapable of representing a company the size of Rangers. But what is particularly concerning is that Daniel Stewart have clear connections with Charles Green having previously worked with him at Nova Resources. Daniel Stewart is also the firm which Green famously told Jim McColl to deposit £14 million with in order for him to walk away from Rangers. Why are we appointing a lesser known NOMAD with links to Charles Green on the day that Green’s shareholding drops below the 3% mark? Why can we not hold onto a NOMAD for longer than a few months? The above is bad enough but the most concerning notice has been left for last. Behind curtain number four is reference to Section S338 of the Companies Act but, in layman’s terms, this board are attempting to block the nomination of other directors at the AGM. In effect this means that instead of the shareholders attending being allowed to have a democratic vote on both the current and proposed directors, the board would prefer it if nobody opposed them. Now I can understand this. Their performance, in my opinion, has been a shambles both in terms of their financial guidance of Rangers and also their general representation of the club in public and private. If I were them then I wouldn’t want an open and democratic vote on my future either. However that is what the fans want and it is what the shareholders want. No matter what you think of Paul Murray and Jim McColl, you must be concerned that this board do not want to give shareholders the opportunity to vote for change. I bought shares partly to have a say in such matters but mainly to help my football club to rebuild itself after financial Armageddon. I didn’t expect to make money from the shares I purchased. I’ve watched the money that myself and others put up, in my opinion, squandered on ridiculous executive salaries and bonuses. I’ve seen what I consider to be poor commercial performance and I’ve seen executives make some bizarre and indefensible statements which are unworthy of my football club. I’d like the opportunity to attend an AGM and, along with other fan and institutional shareholders, decide whether these people should be allowed to continue or whether those nominated by the institutional investors should be brought in instead. This board are attempting to deny me that right in what I consider to be a desperate stunt. Their assertion that the documentation has already been sent to the printers is one of the most pathetic excuses I have ever heard of to stop what amounts to an election. The requisitioning shareholders have already offered to pay any additional printing and postage costs. Why are this board so determined to stop anyone from outside their little clique being brought onto the board? Why won’t they allow a democratic shareholder vote on the direction our football club takes? They will happily use mouthpieces like Bill McMurdo to tell us that they will win any vote easily so why try to stop that vote with these pathetic excuses? The financial figures are atrocious. Many questions remain about exactly where large amounts of money have gone. The level of IPO fees alone is cause for concern and there is no clarity in the accounts on why those costs are so high. The Pinsent Masons report remains unpublished and will stay as a document seen only by the board. We still have no clarity on the beneficial shareholders behind Blue Pitch and Margarita. We still have minimal clarity on exactly what Charles Green’s shareholding situation is. We can’t hold on to a NOMAD for more than a few months. We can’t see the board’s five-year plan despite their calls for the nominees to produce theirs. Both the fans and the shareholders deserve a say in the future of this board. They are trying to deny that say to shareholders at the upcoming AGM and to fans in the stands by demonising them for protesting. If alarm bells are still not ringing for a few in our support then they best wake up soon.

In fact, there's another AGM question right there - Q. Why is the company on it's 3rd NOMAD & 3rd broker in less than 12 months?

At this rate it could be more than another one though and there could be problems raising significant amounts of investment because we no longer have a highly respected NOMAD & broker like Cenkos. Instead we've got a Daniel Stewart which sounds like a 2 bit back street dealer in comparison to Cenkos (going by the leaked Malcolm Murray emails). It's also our 3rd NOMAD & 3rd Broker in just over 10 months at the moment which looks bad to investors.

Aye, but I don't think very many people expected a second share issue would be needed so soon after the first.

I don't know how much the Club will have spent by the time of the AGM, that's why I think asking how much cash is left should be one of the top priorities. As for ST monies.... the £11.2M in the bank at 30 June already included £4.5M cash received from £6.9M in season ticket sales to that point with the other £2.4M still to come in via payment plans. Since 30 June the Club might have received a further £3M to £4M in ticket money (including the £2.4M it was already due from ST). Even if you go high and say that an additional £4M from ticket sales has been brought in since 30 June, the club will have spent a lot more than £4M in that 4 month period. Keep in mind that a 4 month period is essentially a third of 12 months running costs. Jonok's suggested AGM question of "How much is in the bank today" or a differently worded variation of that same question is a very important one to ask of Brian Stockbridge. Also, I'd suggest that asking Stockbridge for a short-term forecast would be an appropriate follow-up question, so something like this: A) "How much is in the bank today?" with an immediate follow-up from another person asking: B) "Approximately how much do you forecast will be left in the bank by New Year's Eve?" Stockbridge should be well prepared and be able to answer those two questions, although is it possible that stock market rules could be a convenient excuse for not answering anything so specific?

^^^ This (or something similar like "how much cash does the club currently have?") Given that he would be getting asked that question a full 4 months after we supposedly had £11.2M in the bank, it might not be a very comfortable question for him.

Could be, but there's facts available which suggest there's been other reasons for the NOMAD changes.

If Green could have sold his shares while Cenkos were still our NOMAD then he would have done exactly that. Remember, his "agreement/s" to sell his shareholding in the company dates back many months to well before the first change of NOMAD and the announcement of his agreement to sell stated that the deal would be completed after the expiration of his lock-in period. There's no doubt a lot more to this than just Green's lock-in though!! It's worth noting that the very same day it was announced that we had changed from Cenkos to Strand Hanson was the day Malcolm Murray & Phil Cartmell were removed from the board and James Easdale was appointed. The night before this stuff was officially announced it was said that Cenkos had withdrawn (or would be withdrawing) their services because they didn't approve of the board changes. At face value, why would any good company approve of those board changes? So in the case of losing Cenkos there could easily be multiple reasons and it's worth remembering this as other news comes out about what was going on. For example, there's information starting to leak out about rebates/kickbacks to investors. Now we move on to today's announcements and we have Green officially out of his lock-in at the same time as the appointment of another new NOMAD. It just happens that the new NOMAD is Daniel Stewart who Malcolm Murray was voicing serious concerns about before Green & co got rid of him. Malcolm Murray was claiming they would be unsuitable as a NOMAD for Rangers due to previous connections with Green and his cronies.

We all have the right to question things that seem strange or seem like irregularities. Why would anyone have a problem with people looking at what's going on and highlighting things which seem odd? It's not a change of broker, it's more serious than that. The NOMAD is our regulator. After what happened to our club last year I'll question anyone running the club for the foreseeable future, so yes I would ask questions of a new board even if I think it's a more trustworthy board than the current one.

There could be more than one reason, but it's not very fair to speculate over and above the facts we have available, which are: A) We know for a fact that Charles Green had a 12 month lock-in period on his shares meaning he couldn't sell them and get out of dodge till December. B) We know for a fact that as well as the change of NOMAD, it was also announced today that Charles Green no longer has a "notifiable interest" meaning he now officially has less than a 3% shareholding. Green might have retained some shares or he might have sold up completely and got out of the Rangersitis business.

Our Nominated Adviser (aka NOMAD) is our regulator for the AIM. It's a company which is LSE (London Stock Exchange) approved. Our first NOMAD - Cenkos, was a highly respected company. For some reason we weren't able to keep them. I'm simply asking why? Malcolm Murray's previous comments about our latest Nominated Adviser (and 3rd in under 12 months), Daniel Stewart can possibly be seen as concerning. Again though, the question I'm asking is Why? Why did we change from the respected company Cenkos in July and why have we changed NOMAD again now, less than 3 months later? Also, why have we now appointed a company which Malcolm Murray was voicing serious concerns about back in June?

Read Malcolm Murray's take on it instead. I've posted the leaked emails from when he was voicing his concerns about this subject to the rest of the boardroom.

Leaked emails from MM (while he was still director and Chairman) voicing serious concerns about the change in Nominated Adviser and in particular his concerns about Daniel Stewart being "unsuitable" for Rangers.

So we're now onto our 3rd Nominated Adviser (aka NOMAD) in under 12 months? WHY? First Cenkos who are highly respected. Why change from them at all? On July 9th it was announced we had changed to Strand Hanson. Why? Now we've changed to Daniel Stewart. Why? .............. 1 October 2013 Rangers International Football Club plc ("Rangers" or the "Company") Appointment of Nominated Adviser The Company is pleased to announce that Daniel Stewart & Company plc ("Daniel Stewart") has been appointed as Nominated Adviser to the Company with immediate effect. Daniel Stewart will continue to act as the Company's Sole Broker. ........................ 09 July 2013 Rangers International Football Club plc ("Rangers" or the "Company") Appointment of NOMAD and Broker Rangers is pleased to announce that Strand Hanson Limited has been appointed as Nominated Adviser and Broker to the Company with immediate effect.

Why were directors paying themselves massive bonuses for last season when it seems clear that the club couldn't afford them?

What's this about a change of broker today btw?

So, why did the IPO prospectus detail that a large percentage of the money invested would be getting spent on X, Y & Z with only a certain percentage going towards working capital/running costs, when what has happened is very different indeed from what was detailed in the prospectus and a very large portion of the money invested has been spent on running costs? Or am I wrong? Have the plans for spending the cash which were detailed in the prospectus been upheld?

Away and threaten some Rangers fans with legal action.

Which is a MASSIVE deviation from what the IPO cash was supposed to be used for as detailed in the prospectus.

This article from the New York publication The CPA Journal dates back to 2004, but it's an interesting read nonetheless, especially the section titled "Why Auditors Fail to Comment on Exceptions to the Going-Concern Assumption" - The Going-Concern Assumption Revisited: Assessing a Company’s Future Viability

What about "opinion shopping"? (Note that we're already on our 2nd NOMAD... Why couldn't we keep Cenkos despite Malcolm Murray supposedly pleading with Green & co not to change ?) What about fears of a "self-fulfilling prophecy" as they call it? There's some quite astounding stats on this with a massive amount of companies which go under having been given a seemingly clean bill of health immediately before sinking. Going back to the NOMAD, I saw these leaked emails for the first time today:

So the company is in good health? We should start a Bring Back Chuck campaign!

TBH, I think the least we should demand of them is a convicted VAT fraudster AND a stolen goods dealer. It wouldn't need to be the same person either. Two would be fine!

I don't think you or I (or most of the people reading here) know the actual state of play with number/percentage of votes for the current board. It's something which is in motion. Regarding the Easdales jumping ship.... now that would be bloody interesting! They would certainly get more support from our fans if they did that!

Bullshit bingo indeed, but there's a bigger stench of bullshit coming from our boardroom and their PR minions than anywhere else. The mass redundancies subject is a peach as well because there should have been more redundancies than there's been already under the current regime and they no doubt know that's one of their initial failings. Are they now trying to get ahead of their own game and plan of letting more staff go by saying "vote for us, we'll give you less redundancies"? You have to wonder, but either way there's a stench of Toxic Jack and mountains of PR bullshit.