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The National (Scotland)

Sport

Matthew Lindsay

Former MP warns Rangers' new articles of association aren't 'fit for purpose'

Rangers Andrew Cavenagh George Taylor Ibrox Paraag Marathe

LIKE the vast majority of his fellow Rangers supporters, Sir Brian Donohoe was pleased when the Ibrox club was taken over by a consortium comprising 49ers Enterprises and American healthcare tycoon Andrew Cavenagh.

The former Labour politician, who served as an MP in his native Ayrshire between 1992 and 2015, is hopeful the new majority shareholders, who completed their £75m purchase of a 51 per cent stake last month, can oversee an upturn in fortunes both on and off the park in the coming season and beyond.

The 76-year-old does, however, have his concerns.

He has reservations about the implications of the Govan giants transitioning from a public limited company to a private limited company.

He was unsettled when he read Rangers’ new articles of association - which were adopted following a vote at an Extraordinary General Meeting in Glasgow city centre on Monday morning - and is worried about how minority shareholders like himself will be represented going forward.

Sir Brian’s misgivings prompted him to attend the EGM, ask new chairman Cavenagh and vice-chairman Paraag Marathe directly who will look after the interests of those who jointly own a 49 per cent stake in the club and enquire how they will be shown the “respect” which he believes they deserve.

“I chair an investment fund with some £800m in its kitty,” he told a gathering of several hundred Rangers shareholders. “I have to watch over that. It is a pension scheme for members of parliament.

“But I have never seen articles of association like those you have presented to us. I have read them four or five times and I still can’t see where the 49 per cent of the shareholders are being represented.”

Cavenagh responded at length. He pointed out that 75 per cent shareholder approval is needed under UK law before significant corporate actions can be taken. He stressed that non-executive directors George Taylor and John Halsted will represent minority shareholders on the board. He also promised there will be regular dialogue with supporters despite there no longer being a legal requirement to hold an AGM.

(Image: SNS Group Rob Casey) So has Sir Brian, who is a former chairman of the Westminster Rangers Supporters Club and who was on the board of the fan ownership group Rangers First before it merged with the Rangers Supporters’ Trust to form Club 1872 back in 2016, had his fears assuaged by those assurances?

Not particularly. He is certainly prepared to give the new hierarchy the chance to prove their worth. However, he remains interested to see how the private limited company functions in practice and is going to reserve his judgement until he does so.

“Time will tell,” he said. “It is not one of these things I would ever have a knee-jerk reaction to. I wouldn’t do that with what goes on on the field either. Having said that, if we don’t have wins in our first four games this season I do think we will struggle.

“But I have to tell you, I don’t see the articles of association as being fit for purpose. They are 40 pages long. But they are not as specific as I would have thought they would have been.

“At the end of the day, the highlight is the majority shareholder has absolute control. That is where there is a failure for me. How they use that will determine how I will think in the future.”

Sir Brian continued, “I think you have to give them time. But, at the same time, they are talking about there being transparency and I am not sure that there is transparency.

“When you take a company from where it was into being a private company then you've got a big problem I think. That's my personal point of view. I would never invest in such a company myself, never.

“Taking the company from being publicly accountable to being private means it takes it out of all of the formal regulation that there is. When a company is public you can go and get representations made on your behalf, but when it is private you can’t, there is no possibility of that. They're private in every sense of the word.

“If you read the articles of association, it's clearer by the page that it's a private company with no input whatsoever from fans and certainly no input from shareholders like myself. That's where we're at.”

Is Sir Brian not heartened by the presence of Taylor, the head of investment banking with Morgan Stanley in Asia who has been a major shareholder in his boyhood heroes since 2015, and Halsted, an American investor who has 30 years of equity experience, on the new Rangers board? He is far from reassured.

(Image: Andrew Milligan) “I knew George Taylor’s father Teddy (the former Conservative MP and Shadow Secretary of State for Scotland) extremely well,” he said. “He was a great guy. He and I used to debate across the country.

“But I have never met George. I have asked to have a discussion with him through a mutual friend of ours, but unfortunately we have never had that discussion. That is a disappointment.

“Given each of the resolutions at the EGM on Monday were passed by a 98 per cent majority, George must have voted for all those motions, including for these articles of association. That disappoints me as well.”

Cavenagh stated that Rangers will make their accounts publicly available every year because they are, despite no longer being a public limited company, obliged to by regulators during the course of a lengthy grilling by bloggers and members of the media at Ibrox following the EGM.

Sir Brian is optimistic the new regime will, after years of watching Rangers suffer repeated domestic failures and post heavy financial losses, be able to put a self-sustainable business model in place in time and deliver consistent success both at home and abroad.

“These two guys, the chairman and the vice-chairman, are both very switched-on individuals,” he said. “They're not anybody’s fools. They won’t necessarily be hands-on, but I don't believe a chairman or a vice-chairman should be hands-on. As long as the corporate organisation itself is in tune with what I would want, then they'll be fine.”

But the shameful actions of previous custodians of the Ibrox club in the not-too-distant past remain fresh in his memory. He revealed that he will turn to his many acquaintances in the corridors of power at Westminster and ask them to apply political pressure if he is unhappy with how Rangers are operating.

He has done so in the past. The former trade unionist publicly called, long before the possibility of creating an independent regulator for football had been raised, for a parliamentary inquiry into football clubs’ finances, in particular their use of tax avoidance schemes like Employee Benefit Trusts, back in 2012 after Rangers were placed into administration.

The then MP for Central Ayrshire also demanded that the stewardship of the 150-year-old institution by both Sir David Murray and Craig Whyte be scrutinised by the government.

“I've got other ways of making my voice heard as you can appreciate,” said Sir Brian. “I can go to members of parliament. I know plenty. I'm in London quite often and I talk to them regularly. They can raise matters at the House of Commons. That will not really suit, I shouldn’t think, the directors of this company (Rangers). But I’ve done it before and will do it again.”

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