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Llambias and Leach refuse to go ahead of Dave King Rangers takeover

Board insists Friday’s EGM must go ahead and begin moves to borrow further £5m from Mike Ashley.

Dave King speaks to the press at the Level 5PR offices about his thoughts on Rangers' future.
SNS Group

Dave King has claimed a “landslide victory” in his bid to claim control of Rangers FC but chief executive Derek Llambias and the club's only other remaining director, Barry Leach, are refusing to vacate the boardroom and insist Friday's general meeting must ahead.

The South African-based businessman claims all his resolutions have been passed with no need for Friday’s EGM to take place but, in an announcement to the London Stock Exchange on Tuesday evening, the current board says, because "a significant number of shares have not yet voted", the "outcome cannot therefore be determined with certainty.

In a further announcement to the stock exchange, the board signalled that club has begun moves to borrow a further £5m from Mike Ashley's Sports Direct — saying "the Company has commenced the process of satisfying the conditions for drawdown of the second tranche of the facility announced on 27 January 2015 with SportsDirect.com Retail Limited and associated companies".

On Monday, Rangers chairman David Somers resigned with chief executive Derek Llambias and finance director Barry Leach facing motions to remove them from the board.

In a statement on Tuesday, King claimed Llambias had informed him that he had secured the necessary votes to implement boardroom change.

He said: "All of the Rangers directors that are subject to my requisition have now accepted that my resolutions have been successful and there is now no need for the general meeting to proceed. Mr Llambias put it best by advising me that I had achieved a “landslide” victory. I wish to thank all shareholders, and particularly the fans, for this resounding success. The future now looks more recognisable for all Rangers stakeholders.

"James Easdale and David Somers did the right thing by resigning however the two appointees of Mr Ashley have stubbornly refused to resign and are using their current position (as remaining directors) to withhold implementation of the resolutions for personal gain. I attach a copy of my email to them in this regard.

"Now that the incoming board and I can focus on the future I will issue a further press statement outlining the immediate and intermediate steps that we have to take as we commence the road to re-establishing Rangers to the institution that its legacy demands."

As part of the changes, Paul Murray and John Gilligan are set to be appointed to the board.

King still faces questions over his suitability to be a director of an publicly-listed company, following his convictions in South Africa on 41 counts of breaching the country's Income Tax Act.

The businessman has previously stated the fact he is able to serve as a director in South Africa without impediment is a clear indication he will be able to do the same in the United Kingdom.

King and Murray both will also face questions from the Scottish Football Association over their suitability under the governing body's fit and proper person guidelines.

Both men were involved with Rangers in the lead-up to its slump into liquidation in 2012, which will lead to scrutiny from the Scottish FA's board.

King will also be challenged on his tax convictions before a decision is reached on whether he can serve as an official at the club.

In a statement to the Stock Exchange, the Rangers board said: "The directors believe that they have at all times sought to act in the best interests of Rangers for the benefit of its shareholders as a whole, and refute in the strongest possible terms any suggestion that this is not the case and in particular any suggestion that they have given their personal interests priority over those of the company.

"By remaining in post the directors wish to give the company and possible incoming directors (should the board change) the best possible chance of complying with the AIM rules and of avoiding the risk highlighted in the circular of 06 February 2015 of the company's shares being suspended. There can be no guarantee of avoiding suspension.

"The board have reached out to David King in recent days to seek a resolution in the best interests of the club but regrettably this has not yet proved possible.

"If control of the board of directors of the company changes as a result of the general meeting the directors pledge that they will do their utmost to work with the new board in the interests of Rangers Football Club, as they have done and continue to do."

King urges Llambias and Leach to resign immediately

In an email to former Newcastle managing director Llambias, King called on both the 58-year-old and Leach to step down from their positions with immediate effect.

King states: "You have now engineered an outcome whereby I require your cooperation to implement the requisitioned changes without the need for wasted costs and are using this in an attempt to extract a profitable exit from the company.

"I made it clear yesterday that I am not amenable to that. I point out to you both that your fiduciary responsibilities as directors of the company can not be exercised to your personal advantage.

"I call on you to immediately implement the appointment of directors as discussed with [the club's Nomad WH Ireland] followed immediately by your resignations.

"If you fail to do so, and costs are incurred on the now unnecessary general meeting, you will be jointly responsible in your personal capacity for such wasted costs.

"Your attempts to resign from your management functions can only be dealt with after the changes to the board have been made and there is authority on both sides to act on any decision reached.

"Given the urgency (caused by your failure to act as your co---directors did) I call on you to immediately, on receipt of this email, confirm that you will proceed as requested. This should have happened last week."

On Tuesday evening, the board responded with an announcement to the stock exchange which read: "The Board of Rangers notes the Press Release from David King issued today. Proxy voting closes tomorrow morning at 10am, and at the current time a significant number of shares have not yet voted; the outcome cannot therefore be determined with certainty.

"The position of the proxy voting will not be announced ahead of the meeting for regulatory reasons, and in any event shareholders have the right to revoke their proxy vote by attendance in person at the general meeting.

"The Directors believe that they have at all times sought to act in the best interests of Rangers for the benefit of its shareholders as a whole and refute in the strongest possible terms any suggestion that this is not the case and in particular any suggestion that they have given their personal interests priority over those of the Company.

"By remaining in post the directors wish to give the Company and possible incoming directors (should the Board change) the best possible chance of complying with the AIM rules and of avoiding the risk highlighted in the circular of 06 February 2015 of the Company's shares being suspended. There can be no guarantee of avoiding suspension.

"The Board have reached out to David King in recent days to seek a resolution in the best interests of the Club but regrettably this has not yet proved possible. If control of the board of directors of the Company changes as a result of the general meeting the directors pledge that they will do their utmost to work with the new board in the interests of Rangers Football Club, as they have done and continue to do."

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