Sevco are staring administration in the face after MASH (Mike Ashley’s holding group) requested an EGM and the return of the £5m loan given to the company in January.
Ashley’s request for the £5m loan has been hanging over the troubled company since Dave King’s glorious revolution on 6 March when he swept to power creating regime change on a ticket of transparency and accountability.
Five days later Mr King, once described as a glib and shameless liar by a South African judge, flew out of the United Kingdom and has still to invest £1 in the financially crippled club- leaving lame duck Paul Murray to front the show.
A report in the Daily Record details Ashley’s demands and includes a full copy of the letter set to plunge the Premiership promotion contenders into crisis.
The Record has had a very checkered accuracy rate with stories from Ibrox but with former chief football reporter James Traynor handling King’s PR through the Level 5 agency there can be little doubt that the letter from big Mike is genuine.
More than two months on from the glorious revolution, that also swept John Gilligan and Douglas Park up the marble staircase straight into the blue room of dignity, there has been no sign of a business plan to stem the £1m a month losses never mind Mr King’s promise of £50m being matched by other investors.
Included in the letter requesting an AGM is the demand for a full breakdown of the efforts made to continue listing on the Alternative Investment Market (click here to read ‘Was Paul Murray glib and shameless over AIM’) .
A company statement claimed that the AIM turned down a request from a NOMAD to take over dealing with the company. The reality however is that the AIM can’t prevent a change in NOMAD for a listed company with the real reason that Sevco were removed from the AIM being that no NOMAD would touch the company’s toxic history mixed up with the tax crimes of Mr King.
With match-day income the company’s only source of income the only way that the club can repay Ashley is to take out further loans, with Mr King reluctant to part with any money it’s unlikely that any other ‘investor’ will step in to donate money to the black hole with Mr King calling the shots in secret.
If the company is unable to repay Mickey’s £5m they will have no option but to put the company into administration which will again turn the spotlight onto the SFA and SPFL with the play-off’s underway.
It’s unclear what sanctions can be taken against a club in administration during the play-off’s but the situation highlights the need for a Financial Fair Play with Sevco requiring £6.5m of loans and a £3m share issue to finish third in the second tier of Scottish football and to reach the last four of the Petrofac Training Cup- at the expense of club’s that budgeted to live within their means.
If the £5m loan to Ashley is repaid it will give the club the opportunity to live within it’s means after being propped up by the generosity of Charles Green. Prior to the liquidation of Rangers in 2012 the club was propped up by paying players through EBT’s as well as an overdraft from Bank of Scotland through David Murray that forced the bank into nationalisation.
On the pitch there was some good news for Stuart McCall with Lee McCulloch and Bilel Mohsni both available to play Queen of the South on Sunday after missing the first leg through injury.