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SBD Global/October 21, 2013/Franchises

Rangers Governance Unrest A Threat To Club's Stock Market Shares

Someone "wouldn't run a football match the way the Rangers Plc. is being managed," according to Kate Burgess of the FINANCIAL TIMES. Even before Scottish League 1 Rangers Int'l Football Club "has completed its first full year as a public company, it has lost all but one of its original eight directors and is on its third nominated adviser, or nomad." That is the nearest thing the Alternative Investment Market "has to a referee." The board "substituted the captain and manager before the half-time whistle blew." Now "their replacements have gone." Last week, CEO Craig Mather and another director "quit after the company postponed its first shareholder meeting." This followed a court ruling that four board candidates, including the former chairman, "should not have been barred from standing for election." The company "has until Christmas to hold the vote." Meanwhile, RIFC -- whose shares have fallen from 75p at float to just under 50p -- "has neither chief executive nor chairman and just two directors." It "won’t be so easy to kick RIFC off Aim." The London Stock Exchange, which oversees Aim, "is a hands-free regulator." Even now, when Rangers’ governance "has gone beyond normal measures of appropriateness, the LSE has not rushed in with a red card." But the nomad "will have to justify to the LSE the 'appropriateness' of any board candidate." It "will be tough to find someone who meets the LSE’s criteria and is willing and able to broker a long-term peace." But if it cannot, then the RIFC’s shares "are likely to be suspended." And if the warring continues, the company’s Aim quote "will be cancelled, stranding shareholders -- including thousands of Rangers fans -- with untradeable equity" (FT, 10/20).
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