King sets the record straight over loan
AVE KING has dismissed concerns that he compromised Rangers’ financial position as he moved to clarify the terms and conditions of a £5 million Ibrox loan.
Accounts for RIFC plc posted last week showed Rangers made a loss of £23.5m to year end June 30, 2021 and the champions confirmed that money due to King – plus interest of £832,000 – had been repaid in full in recent days.
King insists the loan was “incorrectly attributed” to him and not Laird, a company in his family trust structure, in an “incorrect statement” from the club and has detailed the discussions with the South African authorities that allowed him to further fund Rangers two years ago.
The former Ibrox chairman has revealed he was approached to consider an “extension of the loan period to assist with the future funding of the club” shortly before the repayment was made.
And, in a statement released yesterday, King said: “At the AGM in 2019, I expressed regret that the authorities in SA [South Africa] would not allow this much-needed loan to be made without it attracting a market-related interest rate – but I was pleased that it was granted on an unsecured basis.
“The dramas of the David Murray/Craig Whyte/Mike Ashley eras had most damagingly exposed why the “owners” of the club at any time should never use the club’s assets to secure their own investment. That ultimately leaves the real risk with the supporters. I was determined that would never happen under my watch and was glad that my fellow directors (at that time) agreed with me.
“I explained at the AGM that my regret at interest being paid was that it went completely against the undertakings given by me and my fellow directors (at regime change) not to take director fees and not to receive interest or take security for loans provided to the club.
“The hardened position of the SA authorities to investment in the club reinforced the timing of my decision to step down.
“I had achieved my personal objective of removing the club from
its state of crisis and it had become in the best interest of the club to be guided by individuals in the UK who, I thought, were capable of taking the club forward in a normalized manner (Covid had not yet happened) and who were willing and able to continue to provide any funds that might be required on an unsecured and interest free basis – and thereby honouring the commitment that we collectively made to supporters and shareholders.
“At the club’s request, the Laird loan that I disclosed was only payable after two years and, indeed, was repaid to Laird a little more than a week ago.
“This is long after the year end that the club recently reported on and had no impact whatsoever on the club’s performance. The payment, including agreed interest, had been recognised in all cash for casting throughout the prior two years and consequently had no impact whatsoever on the club’s anticipated financial position.”
Rangers will require an additional £7.5m of funding before the end of the campaign after citing the impact of Covid on financial figures that saw revenue decrease by almost one fifth during their historic 55th title-winning term.
Several Ibrox investors – the most significant of which was Far East businessman Stuart Gibson – have provided cash injections that were subsequently converted into equity.
And a £5.25m loan facility provided by deputy chairman John Bennett and directors Alastair Johnston and Julian Wolhardt is being charged interest at six per cent on an accruing basis over the next seven years.
King said: “On a final note, unless I leave the wrong impression, it is only the directors at the time of regime change that I consider bound to provide interest free unsecured loans.
“That commitment can in no way be binding on those that came thereafter unless they specifically committed as such.
“I state this because I was approached last year by the club to grant permission for loans to be made against the security of club property – which I understood to be a requirement for certain new director loans.
“My permission was required because the SA authorities only agreed to the Laird loan being unsecured on condition that no subsequent lender could get better terms.
“I refused to even countenance such a request as I considered it against the spirit of everything I had committed to supporters.
“Now that the Laird loan has been repaid the present board is free to make its own decisions on using club property as security.”