RANGERS FIRST
“WHERE DID IT ALL GO WRONG?”
Rangers First (RF) made the transition from a collective idea and aspiration to a Community Interest Company (CIC) in May 2014. Finally, a fully independent structure was in place that, once the collective goal was reached, could prevent investors or future boards with any ulterior motives from damaging our club. After the shenanigans that had happened over the few previous years, the fans could hold any Rangers investors and/or board to account. The CIC was the guardian many fans had sought. An initiative owned, governed and funded by fans; setup to purchase equity (shares) in Rangers International FC plc (RIFC plc) and if required the fans can use the voting rights that are attached to shares in a company to challenge or prevent an onerous investor and/or board in the future from imposing anything on RIFC plc without the express permission of the fans who were members of the CIC. The intention was for the CIC to eventually reach 25% +1 Shares in RIFC meant that the fans can scupper any vote in that company as the law states they need 75% or over to agree with them.
At its height, Rangers First had (circa) 13k monthly contributors averaging £8 a month generating an approximately £100,000 per month plus over £400,000 was raised through a lifetime membership initiative. It had also received thousands of one-off donations which in all accumulated to circa £1,000,000 as illustrated in the company’s annual accounts. It was an extremely successful initiative that all members were proud to be a Member.
It seemed to have a somewhat “rocky” relationship with the RIFC plc board. This was evident in January 2016 when after the CIC had announced an agreement was in place to use the loan for equity provision. RIFC plc rebuffed this offer and claimed RIFC plc “was not seeking further investment at this time.” http://rangers.co.uk/news/headlines/rangers-international-football-club-statement-3/ This was somewhat embarrassing for the CIC, notably Ricki Neill, who the day before was actively promoting the deal was done. (paraphrasing) I’m also aware that not only was it a done deal but it was the club that approached the RF board inviting them to utilise the provision.
So what changed? Why was the loan provision accepted then rejected? James Blair indicated to those present at the RF AGM that the timing was a major factor; that events out-with the control of the club required a strategic position that prevented RF and RIFC plc mutually benefiting from the provision (at that time). It was important not appear as if RIFC plc required liquidity which might adversely affect the outcome of the court case involving the RIFC plc and 802 Works Ltd who was seeking the court to ring-fence £300,000 citing the possibility RIFC plc could not fulfil its monetary obligations due to an outstanding bill for work carried out at Ibrox Stadium to install wireless internet for the fans to use while in Ibrox. RIFC plc contested the claim, stating the firm breached the contract as the system could not be used by 50,000 people at the same time and RIFC plc subsequently provided a profit/loss statement for Dec 31, 2015 that showed half-year losses significantly down to just below £500,000 which indicated the company was in no danger of insolvency. This event created uncertainty within the RF membership; many whom had misgivings around trust and transparency.
It seems that the relationship between RF and RIFC plc is not the same that existed between RIFC plc and the RST. There has always been a desire to cleanse the support of any involvement with RF which has been evidenced regular smearing of individuals previously involved in RF on social media most notably on Follow Follow. RIFC plc itself has never made it easy for a cohesive working relationship with RF and much preferred the mutually accommodating arrangement that existed with the RST. That being said; for the benefit of Rangers FC, a solution was sought that could bring a unified approach to fan ownership going forward with the rationale that the success of RF coupled with the unyielding relationship that existed with the RST and RIFC Plc. The achievements of both could be used to positively impact fan ownership and capital investments whilst creating a closer working arrangement between the fans and RIFC plc while adhering to the independence and accountability that was a fundamental provision when creating the RF fan initiative.
“Club1872” was the answer (or was it?) It seemed to tick all the boxes, it would bring together all aspects of the support and use the expertise and success of the RF model. Initially many thought the merger was very rushed and that the failings exhibited around transparency and governance had not been addressed. Many questioned the unrestrained urgency shown from certain figures whose interests seemed best served with this model.
For me, there are four steps to achievement:
· Plan Purposefully.
· Prepare Prayerfully.
· Proceed Positively.
· Pursue Persistently.
None of the aforementioned steps can be achieved without a practical and appropriate timeline. This amongst other statutory failures can be evidenced with the recent resignations of 3 highly respected individuals who felt their positions on the board of the CIC had become untenable. Kelly Johnstone (not Thompson) Peter Ewart and Brian Donohoe, two of which are also members of the RST initiative for fan ownership Buy Rangers, cited numerous governance issues, problems arising from self-interest and reservations around the companies member registry which they confirm was inaccurate and unreliable. This issue (in the past) has created concern amongst Members and Directors that statutory guidelines are not being adhered to. Companies Act 2006 (113) http://www.legislation.gov.uk/ukpga/2006/46/part/8/chapter/2
When RF initially launched, the rules were clearly outlined as members sign up to a monthly donation package. Those donations are used to purchase shares in the Company so long as you were actively contributing a monthly donation you would be given collective voting right over any shares owned by the CIC. However, all 3 resigning directors have indicated there are problems with identifying exactly who is an active member. This issue doesn’t appear to have been addressed properly as it still exists for the database used at the launch of the new Club 1872 website and therefore effects any member votes who were excluded from the database.
Something else which is indeed worrying is how the polling of members is administered. There seems to be an obvious misinterpretation between a written resolution and that of one called at a General Meeting. http://www.legislation.gov.uk/ukpga/2006/46/section/283 The accompanying link describes the quorum, eligibility and requirement when amending the Articles of Association. It also pertinent to mention that one of the resignation letter highlighted a degree of ambiguity over circumstances when a special resolution is required.
From the turnout illustrated to members via email the total eligible vote 1,980 (it’s clear) is not sufficient to amend the articles under the provisions set out in the Articles of Association.
From here on the choice is simple. Are members happy that incompetence and ineptitude coupled with breaches of statutory and fiduciary duty is the way forward? If not, a robust governance review needs to take place; taking into account the failings outlined within the resignation letters.
For me the choice is simple. I want a model that is befitting of our great institution, one that can achieve a coherent and cohesive understanding with all member where self-interest is replaced with a selflessness approach. The RF model is an example to all of what could be with Club 1872. My message would be, strive for change and don’t accept incompetence.
I have outlined below some common procedures and provisions which would vastly improve the compliance with statutory regulations whilst perfecting the transparency and communicatory relationship with members.
Elections managed, overseen and administered by a reputable, Supporters body.
· A credible, members register (required in adherence to statutory provisions) where only eligible members are allowed to vote and ensuring they have access from other mediums other than online.
· Those with any previous or existing (employment) association with RIFC PLC, RST or any other subsidiaries, are ineligible to stand for election.
· A panel setup with “X” amount to filter applications and shortlist. This should include but not limited to Fans, Independent Vetting Agent, RIFC plc rep, Club1872 rep and Club1872 member.
· Candidates understanding and agree that once elected a code of conduct will be signed.
· Importance in broadening and modernising the obligatory candidate profile ensuring all members can resonate. Contrasting profiles are required to complete and compliment the board. For example: a supporters voice, diverse representation (gender, race, accessibility restricted), professional (legal, IT, business, finance, marketer, government representation, 3rd sector or CIC experience, CRM & sales management)
· Robust protocols involving social media, with candidates understanding any such breaches will cause elimination.
· Each Candidate agreeing that once elected a Chair and a Deputy Chair are agreed.
· Candidates understanding once elected a minimum number must agree on all board matters.
· A practical and substantive, transitional period involving the Working Group, with an option (if required) to extend.
I would call on those RF Directors that remain in situ, to call an EGM, Re-elect a board and re-run the recent article amendment…I would also request {in-part,} that of Club1872 ltd to update and modernise their existing articles of association, that they may represent the opinions of members, bearing in mind the options listed above. And those articles should be independently reviewed by a specialist legal advisor.
Concerned Member
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Resignation Letters 