Controversial Glasgow-born South African billionaire Dave King is back in headlines today, the tenth anniversary of the collapse of the country’s iconic football club Glasgow Rangers. King made his fortune in SA around two decades back through a 50c to R70 (and then back to almost 50c – after he’d sold) JSE listing called Specialised Outsourcing. King fought a lengthy battle with SARS, claiming there was no tax payable on more than a billion rand he made from what critics called a pump-and-dump exercise. The erstwhile tax fugitive finally settled with SARS in 2013 after agreeing to pay it R706m, SA’s biggest tax settlement ever by an individual. When King was flying high, he claims to have invested £20m into Rangers FC and for years has been trying to recoup the money on the grounds of misrepresentation by the former owners. Journalist Martin Williams of venerable Scottish broadsheet The Herald (a 238-year old newspaper) reported this morning that King has lost his bid to get the money back. His article is republished below with permission from the newspaper. – Alec Hogg
Ex Rangers chief Dave King’s £20m claim on oldco fails
FORMER Rangers chief Dave King has failed in an audacious bid to get back any of the £20m he claimed he was owed from the club as a result of an investment in the club.
The Herald understands that there has been no appeal after the liquidators of the Rangers oldco rejected his claim.
The claim came after Rangers fell into administration ten years ago after the taxman lodged a petition over alleged non-payment of £9m in tax following the ill-fated takeover of the club by businessman Craig Whyte in May, 2011.
The South African businessman registered himself as an unsecured creditor saying he is owed the money as a result of an investment in the club 14 years ago.
Mr King became the club chairman in 2015 as he led a Three Bears group takeover ousting a board allied to Sports Direct supremo Mike Ashley, before stepping down five years later.
Mr King had registered himself as a creditor of the club’s liquidated business saying he was owed £20m for his investment in the club over 20 years ago.
But the Herald understands that liquidators BDO have dismissed the claim and that Mr King has never received any money from what he claimed he was owed.
After the club’s business was heading towards liquidation, in March, 2012, Mr King, who was then Rangers’ second-biggest shareholder had threatened a £20m legal challenge against former owner Sir David Murray, amid allegations of a lack of financial information about his investment in the club from over 20 years ago.
It was in connection with a £53.1 million rights issue introduced 12 years ago, aimed at cutting club debt.
Mr King said at the time that he believed liquidation would make his shareholding, which then stood at 11 million shares just after the rights issue, worthless.
Mr King, a life-long supporter from Castlemilk, Glasgow, who was then backing former director Paul Murray’s Blue Knights consortium bid to take over the club, said: “I seem to be one of the few people who actually invested cash into the club.
“I have made a claim of £20m on the basis of non-disclosure by the then chairman, David Murray, of Rangers’ true financial position as far back as 2000.
“Other shareholders may feel deceived like I do and wish to take similar action. David Murray will no doubt argue to the contrary, and the merits of this will be dealt with in due course in the appropriate forum.
“For present purposes however, I simply want to advise the fans and fellow shareholders that any benefit I receive from my claim will be fully reinvested into the restructured football club.
“I remain 100% committed to Rangers Football Club and will do whatever I can to advance its interests.”
A spokesman for the Murray Group said at the time that they noted “with some interest and much incredulity” what Mr King had said.
The controversial rights issues in 2000, questioned by Mr King, involved Murray Sports, which was controlled by Sir David, taking up rights through its RFC Investment Holdings subsidiary to the tune of £32.3m.
Of that, £20m was described as new cash injection from Mr King, invested through his company Ben Nevis Holdings.
As part of the changes Mr King became a non-executive director of the club.
A slice of the new cash was to go to lowering the club’s debt levels, which were then standing at about £40m, as a result of investment in new players.
The club said at the time that its main objectives were to continue to improve the quality of the player pool, developing young players through the new Rangers Academy, and to improve Rangers’ performance in European competitions, which are significant revenue earners.
Among the investors was ENIC, the sports and investment group that paid around £40m for a 20.2% stake in the club.
Four years later it sold the 11.5 million shares for a fraction of what it paid, selling to Sir David for just £8.7m.
Daniel Levy, the chairman of Tottenham Hotspur and ENIC, resigned as a director of Rangers as a result of the deal.
Sir David’s spokesman said at the time of Mr King’s concerns: “It is difficult to understand his motives, given he has been a director of Rangers Football Club since the year 2000.
“Throughout the period of his directorship, Dave King has attended and participated in regular board meetings, including those approving the annual audited accounts, received board papers quarterly, had full access to the executive management of the club, and been privy to the same detailed financial and commercial information as every other board member.
“In the event that he actually lodges a claim, we would vigorously defend it.”
Mr King, meanwhile, said fans had been “duped” about the takeover funding of the club – referring to the agreement when Ticketus paid £24m to secure the right to sell the club’s future season tickets, with part of the cash used by Mr Whyte to complete his takeover in May, 2011.
He said at the time: “Immediately upon the acquisition of the club by Craig Whyte (far from being debt-free as was trumpeted by the Murray Group and Craig Whyte at the time) the club was in a much worse economic position than before and had no chance of survival even if we had progressed in Europe.”
He added: “I am absolutely satisfied in my mind that (the Murray Group) had no knowledge that the proof of funds supplied by Craig Whyte’s attorneys was secured by season ticket sales. I am further satisfied that the Murray Group would not have proceeded with the transaction if the true source of the funds had been disclosed.”
Read also:
- Cold-shouldered Dave King blames SA rules: UK firms banned from business with him
- MICROMega’s Dave King in hot UK water as lawyers admit he lied to Rangers FC fans
- WORLDVIEW: First SARS, now UK authorities land SA entrepreneur Dave King with huge liability
