Mike Ashley has delivered a devastating condemnation of Dave King and his business dealings.
This morning The Daily Mirror, sister newspaper to the Daily Record, trailed the story with the ominous phrase that Sports Direct wasn’t a bank.
MASH followed that up at lunchtime by laying bare the facts ahead of Friday’s AGM at which Mr King will be expected to come up with answers rather than the moonbeams that he has been spinning since his regime change in March.
The statement also refers to Mr King’s criminal convictions in South Africa.
According to the MASH statement Mr King has two key questions to answer:
a) Why was the company unable to come up with a nominated adviser to remain on the Alternative Investment Market
b) Repay the £5m loan facility given to the company in January which was conditional on retaining a public listing.
Looking at the de-listing the statement asks: “MASH was surprised and concerned as to the speed with which, following the general meeting held on 6 March 2015, Rangers Plc was delisted from AIM.
“MASH had relied upon Mr. David King’s various public statements that there was a NOMAD willing to come in to act for Rangers Plc (subject to the customary checks). Clearly, at some stage in the NOMAD appointment process, it became clear to the New Board that the potential NOMAD was not satisfied with its investigations of Rangers Plc.
“The key question is when exactly did this happen and what steps did the New Board take as part of normal contingency planning to consider alternative NOMADs and engage with the AIM Regulator so as to ensure that the AIM listing was preserved?
“Crucially, did the New Board leave it all to the very last minute and were then left with no viable alternative? The consequence of what happened is that Rangers Plc no longer has a public listing, nor is it subject to the AIM regulatory rules which is all the more important in circumstances where the new Chairman of the New Board has, as is a matter of public record, been prosecuted for and admitted liability in respect of various criminal offences in South Africa, resulting in the payment then of approximately £44 million to cover liabilities and fines in South Africa.”
Explaining why the company couldn’t find a NOMAD on April 2 Paul Murray said: “The prospective Nomad completed its checks on the “fit and proper” status of the existing and the proposed additional director of the Company and confirmed to the Company that it was satisfied on both fronts.
“It then carried out its own assessment of the Company’s profile over the last several years and the issues which had been encountered. We understand this process involved discussions with the Exchange.
“We were advised that, following this process, the prospective Nomad was unable to take up appointment. We also understand that any alternative Nomad is liable to encounter similar difficulties and therefore the Company requires to terminate its listing on AIM.
“This is no reflection on the current Board or on the financial condition or prospects of the Company. It is simply the result of the well documented failings in corporate governance and management of those who previously controlled the Company.
“The Company understands that this resulted in AIM receiving more complaints about the Company than any other company on its Exchange over the last year. We appreciate and understand the difficulties this presented for AIM.”
Turning to the constant criticism of the deal with Sports Direct the MASH statement goes to some length to explain that the UK’s leading sports retail company offered a helping hand to a new club with no experience of retail matters.
MASH stated: “1. At the relevant time, it would not have made commercial sense for RFC to finance its own retail operation, nor did it have all the necessary retailing expertise to do so. It recognised that its expertise should lie in the running of a football club, not in the running of a retail organisation.
“2. RFC chose to partner with the most successful sports retailer in the UK market. Sports Direct has proven retail prowess, significant buying power and a far reaching distribution network.
“3. Prior to entering into the Sports Direct joint venture, it is understood that RFC had entered into a 10 year joint venture with JJB Sports as its retail partner.
“4. RFC benefits not only from goods and merchandise sold in the Ibrox Megastore and online, but also from sales of Rangers goods and merchandise sold in Sports Direct retail stores and on the Sports Direct website
“Sports Direct notes from the recent voting advice statement issued by the new Board on 3 June 2015 that the New Board are saying that there has been: “a continued and dramatic reduction in income generated by retail operations”.
“Sports Direct is of the opinion that there is no basis for this statement whatsoever, and invites the New Board (subject to complying with confidentiality obligations) to explain in detail the facts behind this statement.
“Sports Direct remains of the view that profits can be increased at Rangers Retail through more focused budgeting and ordering of products and that the historic profitability of Rangers Retail has been badly affected by the over ordering of products in the past and the opening of additional retail stores outside of the Ibrox Stadium.
“In Sports Direct’s experience, the ordering of products should reflect the football league in which RFC operates and standalone stores outside of the main stadium are rarely profitable.
Paul Murray- glib and shameless.