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    Comment on Bad Money? by easyJambo.

    Ex Ludo 13th June 2019 at 17:12

    An SFA tweet appeared this afternoon suggesting a new definition of a club viz  “an entity that can command an audience “ The tweet has since been deleted. Anyone had sight of this?

    ================================

    Going back to your question from the previous blog, the changes to the SFA's Articles have now been lodged with Companies House.

    There are changes to the definition and rights of an "associate member", (tier 6 or below), but nothing about the definition of a club.  It's an issue for the newly licensed clubs, who would appear to have only been granted "associate member" status although, ironically, Bonnyrigg will be deemed a full member with voting rights because they are now in the Lowland League (tier 5).

    https://beta.companieshouse.gov.uk/company/SC005453/filing-history

    Check the resolutions document for the changes. 

    easyJambo Also Commented

    Bad Money?
    Further to the RIFC debt for equity swaps, a total of £24.25m in loans has been converted to shares in the last 11 months (£11.13m in Sep 18, £5.5m in Jun 19 and £14.12m in Aug 19).

    I believe that the haste is which the conversions were carried out makes it likely that UEFA had insisted on the debt reduction as conditional to the granting of UEFA licences over the last two seasons.  UEFA does not allow for excessive losses to be covered by loans under FFP rules, although equity investments are acceptable.

    According to their last accounts, the total of "investor" loans at 30 June 2018 was £23.425m. We also know from official documents that Barry Scott did not convert £45k of his loan (for reasons unknown).

    Those figures suggest that RIFC borrowed an additional £870k against a forecast £4m last season. The reduced borrowing may be the result of better than expected revenue from the EL run last season.  A further borrowing requirement of £3.6m was forecast for this season.

    My figures don't take account of any short term borrowing from Close or elsewhere.  However I will be interested to see how my calculations stack up against the accounts when they are published (probably in October).


    Bad Money?
    Cluster One 7th August 2019 at 07:06

    easyJambo 7th August 2019 at 00:06
    so more than enough to vote through anything they want.
    ……………….
    Could that include a nice pay rise, a renaming of ibrox, selling off some assets?
    ….

    Enough to vote through anything they want.And would i be correct in saying (and happy to be corrected)that club 72 shareholding is now so low that they now can’t call an EGM if king and co start to vote through anything they want and the fans start to not like what they (king and co) are voting through.

    ======================================

    With a controlling shareholding they are free to do what they want.

    Club 1872 now holds approx 6.4% of RIFC shares. You only need 5% to raise a motion at a GM or AGM.  It is the same threshold that the Res12 guys had to meet to get their motion on the agenda at Celtic's AGM. 


    Bad Money?
    John Clark 7th August 2019 at 09:17

    easyJambo 7th August 2019 at 00:06

    '..then they collectively control 81%, so more than enough to vote through anything they want.#

    ++++++++++++++

    I thought I had seen a reference in something from the TOP to the effect that the concert party could not use the additional shares they were allowed to obtain to increase their voting power or some such. I didn't understand it then ( couldn't really see how they could be denied the voting rights attached to the extra shares) and am probably mistaken. . Any recollection?

    ================================

    That restriction applied to the share issue in September 2018 where the Concert Party were unable to increase their overall share of the company (34.05%) until King made his offer in January. So while new shares were issued to Club 1872 and others, King Park, Letham and Taylor were restricted on how much of their loans could be converted to shares.

    That restriction was lifted following King's formal offer in January, but when the second share issue (DFE swap) was proposed, TOP agreed that it could proceed unrestricted if the shareholders other than the CP and Barry Scott, voted through a "whitewash" motion at a general meeting to waive the need for another Rule 9 offer. That motion was passed a a general meeting on 19 June. The CP was then free to convert their remaining loans and by doing so increase their percentage holdings in the company.


    Recent Comments by easyJambo

    In Whose Interests
    Bogs Dollox 14th October 2019 at 21:52

    Does anyone know how far reaching the could shoulder sanctions are?

    ==============================

    The judgement stated:

    In our opinion is Mr King an offender who is not likely to comply with the Code and whose conduct merits cold-shouldering by professional bodies regulated by the Financial Conduct Authority

    ==============================

    The judgement also relates to King individually, unless he acquires a controlling stake in the company.

    My reading of the above is that FCA regulated companies will not do business with him as an individual.  That may extend to club activities where King is the signatory or nominated person to act on the club's behalf. In those cases it may be as simple as getting someone else to act on behalf of the club.

    The net effect on King and the club will be neglibible if anything at all.

     


    In Whose Interests
    Aside from the TOP ruling, I note that "Sons of Struth" (Craig Houston) appears to have got hold of SDI's pleadings from the hearing last month.

    He has put his own spin on the contents on Facebook (as expected) but has added a number of images of pages extracted from the 69 page document.

    https://www.facebook.com/SonsOfStruth/

    or

    https://www.facebook.com/SonsOfStruth/photos/pcb.2511080289123084/2511079169123196/?type=3&theater


    In Whose Interests
    King's admission that it cost him over £1m in legal costs should be set against what he saved in not having to buy out shareholders who accepted the Code 9 offer.

    Purchasing the 18.9m shares offered by those shareholders who accepted the offer would have cost him £3.78m plus costs of the offer, so a net saving to him personally of around £3m.


    In Whose Interests
    Timtim 11th October 2019 at 11:55

    https://www.fca.org.uk/publications/corporate-documents/statement-takeover-panel-cold-shouldering-david-cunningham-king

    Oooops 

    ===============================

    Probably around two years to late and as a result will be ineffective.

    The TOP has failed to protect the interests of ALL shareholders by allowing the share issue in September 2018 to gerrymander a positive result for King when he finally made his offer in February 2019.

    The conclusions in paragraphs 84 and 85 are wrong, as the level of acceptances in the February 2019 offer makes it clear that the offer, had it been made in the time frame as originally demanded by the TOP, and before the targeted share offer the previous September, then it would have become unconditional. Those who wanted to sell were effectively prevented from doing so by King's failure to comply timeously with the Takeover Code.


    In Whose Interests
    dom16 7th October 2019 at 16:12

    EJ

    I for one would be interested in the machinations around Hearts problems. 

    My sense is that every football admin process is different to the others and Murray’s book might shed some new perspective.

    =========================

    If I can summarise in a few paragraphs, there were a range of issues at play. We had a foreign owner. That foreign owner was insolvent themselves, so their administrators were looking for the best return for their creditors and the Lithuanian legal processes were interminably slow, which had a knock on impact on the progression towards a CVA and the transfer of shares.

    Hearts administrators themselves had the more common problems of multiple groups being interested, but few having the means to deliver a bid. They weren't helped by Hibs supporters writing to the Lithuanians advising that the assets were worth more than they had been offered and a couple of previously rejected bidders going over their heads and making offers for the club directly to the Lithuanian administrators. These "offers" were never backed up by proof of funds.

    FOH itself was not without its problems in the early stages. It had been set up in 2010 (three years before administration) but, once the club's crisis deepened in 2012/13 there were, lets say, personality clashes and differences of opinion and approach between the founder directors, the fans groups representatives who had been brought on board and Supporters Direct representatives who were engaged to assist in developing a fan ownership model.  Fortunately those issues were overcome, although not without some casualties on the way. 

    A lot of the book is taken up talking about those events, communications, discussions, meetings etc.

    If you bear with me, it might be possible for us all to get a better insight on those machinations in the next week or two.