Wednesday 27 November 2019 08:03, UK
Dave King has discussed the "irritating" Sports Direct dispute, HMRC allegations and the need to retain Alfredo Morelos, after his decision to step down as Rangers chairman.
The South Africa-based businessman revealed he will leave his position as Rangers chairman, after nearly five years, at the club's AGM on Tuesday.
He spoke after the event and fielded questions on a number of issues, including Sports Direct, the Takeover Panel, HMRC, investment and the need to keep Morelos if Rangers are to challenge Celtic for the Scottish Premiership title.
King and Rangers have been embroiled in a legal fight with Sports Direct for the vast majority of his reign, the most dramatic chapter coming when Newcastle owner and former Gers shareholder Mike Ashley failed in a bid to have him jailed for contempt of court. King won that particular battle with a judge speculating that Ashley wanted to "grind" his rival "into the dust".
Rangers went on the offensive over a retail contract which earned them a seven per cent share of income and King declared the dispute over in June 2017 after coming to a new agreement. It later emerged the agreement had cost Rangers £3m but it did not end the dispute. Rangers had to pay legal bills following a fresh court case a year ago and are awaiting another bill after Sports Direct successfully claimed another breach of contract this year.
King was also involved in a significant row with the Takeover Panel, again facing contempt of court proceedings, after being slow to meet requirements to launch an offer for the rest of the club's shares after being adjudged to have acted in concert with other parties in the March 2015 boardroom coup.
King finally made his offer in January this year, which was not taken up, and was sanctioned by the regulatory body last month. He claimed then that being "cold-shouldered" would have no impact on him or Rangers but he qualified that assertion at the AGM, admitting the involvement of the South African authorities in the process had a "negative impact". He claimed he had not been permitted to make a further investment in shares and had to loan the club £5m in recent months instead.
More recently the issue of the 'Big Tax Case' involving HMRC has resurfaced, with The Times reporting "up to £50m is set to be wiped off the tax bill" related to the club's use of employee benefit trusts, or EBTs, after HMRC reportedly acknowledged it had claimed for too much. Rangers said the report "is a cause for concern" if accurate and will take time to consider potential action.
After announcing his decision to step down King also revealed Rangers will not sell striker Morelos "at any price" in the January transfer window and said he will leave the club in "the best state it has been in for 40 years" when he steps down.
Read the full interview below…
Why are you stepping down?
"There are two main things. It does suit me personally in terms of some of my South African business activities. Things are quite tough down there, businesses have been struggling - part of it I've not been paying attention.
"I really could not explain adequately how much time and effort Rangers has taken over the last number of years. That is a factor.
"But also a factor is that the club is ready. I went to the board meeting yesterday (Monday) and I said 'the days of running losses and me making all the decisions based on whether we are going to write a cheque or not - it can't continue'. We are beyond that.
"So let's just do one big fundraise, square everything off and then say 'guys, you are now on your own. Give us your budget and go run the business'. Like every other club does, quite frankly. We just couldn't do that because of the way we funded the business."
What is the current status of the litigation with Sports Direct?
"Sports Direct for me is more irritating than significant. I just don't like the fact that they are still trying to retain a level of influence indirectly over our retail operations but it is not like it was a couple of years ago.
"There is no influence, there is no power base there. It irritates me, it is something I am steeped in, I am the director of Rangers Retail Limited so I'll stay and I'll fight that, whether it is two or three years. I'll continue to do that. It is important but it is not something that is threatening the club. It is not something that is going to make a big difference to our finances.
"It is not the strategic risk that it was before we terminated the existing contract. It doesn't have that level of quality in terms of the risk factor."
Rangers previously paid £3m to terminate that existing Sports Direct contract - does King regret that?
"No, because we did terminate it. The way they are coming at us now is a different way. It is not as robust, it is not as strong as it would have been if that other contract was in place."
Rangers need £10m funding through the season?
"Really, as little as that? I thought it was more. I'm not going to say, but it's more than £10m."
How will this be funded?
"The same as we have always done - we will put money in. All of the investors and co-investors, we are all committed. I've gone to the board and said 'let's just call it, we know how much we are in for structurally. Let's raise the money, put it in and then say to the manager going forward, come with your budget and every year we will approve your budget and then get on with it', so it is really the way the business should have been running but couldn't run because of the way we funded it."
Can Rangers be sustainable and compete with Celtic?
"I see our situation as being the same as Celtic's. As a club, and if you look at the revenue streams, commercial sponsorship, season-ticket sales - we are pretty much the same as Celtic.
"Where we are playing catch-up is their ability to trade players. That is a feature of success on the pitch. If our players are winning leagues, playing in Europe and getting to knockout stages in Europe then we will start to get the trading value.
"Part of our funding of the club is recognising that is an income stream that we don't have. We are okay with Celtic in everything else but we've got to now start trading players the same way Celtic do."
Do Rangers have to sell players?
"No. The view of the board is that we are there to win trophies. So if someone came along and said we will give you £25m for Alfredo Morelos, my recommendation would be not to take it because I think it weakens our chance to win the league.
"I said to the manager, you make a footballing decision. What is the footballing decision - getting money for Morelos now, can't replace him, have money in the summer or do you want to win the league this year?
"The manager also wants to win leagues so I don't see Morelos going anywhere, no matter how much they offer.
"I do not see Alfredo Morelos leaving in January at any price. We want to win the league, we don't want money in the bank. He is a goalscorer. I wouldn't like to have to replace him."
When will you step down and who would you like to replace you?
"It would probably be the first board meeting next year which is March so I will work with Stewart [Robertson, managing director] and the other executives, Steven [Gerrard] and the sporting director to make sure that all the policies and controls are in place so that when we do free them up we have got the right structure in place.
"And of course I have to see the fundraising through, I can't step down until I have bridged that funding.
"The board must decide that [replacement]. It will work the same way for the next four months. I'm still the chairman, Douglas [Park] is still the deputy chairman and then the board will decide. Someone has got to put their hand up.
"I'll certainly be alerting the new chairman that it might be an honour to be the chairman of Rangers but it is not an easy task."
Was the Takeover Panel's ruling to "cold-shoulder" you a reason for stepping down?
"I think the Takeover Panel might be a reason for me to stick around, just to be defiant. The Takeover Panel is not an issue, cold-shouldering me - I'm not on the boards, I'm not going on the boards of any company in London so it was more symbolic.
"I think it was more the Takeover Panel saying to me 'you didn't play by our rules, we don't like you and we are going to punish you', and I get that.
"I was told by our lawyers that I had no chance of winning but I can be a bit stubborn so I thought I'm going to push it anyway."
Do you believe HMRC has done anything wrong with regards to the Big Tax Case?
"I've got no idea. I am information gathering, which one can do in a public platform, so my view is that there are allegations out there - if the allegations turn out to be true or substantially true then as much as the club doesn't have any legal basis as we are not affected by that, as a shareholder myself and on behalf of other shareholders I'd be willing to fund an action against HMRC to recover funds and in fact then donate the money to the club."
If there was a mistake, how was this not spotted by Rangers?
"It depends on the nature of the mistake. There is penalties on the club, for example. You could argue that the penalties were too severe, they have discretion on penalties. Was it a mistake, was it a judgement? Until we know that we are actually just guessing."
What state are you leaving the club in?
"If I complete the fundraising, the best state it has been in for 40 years."
Should it be a concern for fans that you are leaving?
"Not if I leave and it is fully funded, I wouldn't think so. I don't think I am that important."
How does your stepping down as chairman affect your current and future investment?
"I think it is good for it in the sense that the circumstances that allow me to step down are good for the club. If I kept hanging around it is because the crisis was continuing."
