Dave King punished by Takeover Panel over Rangers purchase

The businessman has been "cold-shouldered" for a period of four years.

King has been sanctioned by the Takeover Panel. <strong>SNS Group</strong>
King has been sanctioned by the Takeover Panel. SNS Group

Rangers chairman Dave King has been heavily sanctioned by the Takeover Panel over the way he took control at Ibrox in 2015.

The South Africa-based businessman has been “cold-shouldered” for a period of four years.

It’s only the fourth time such a sanction – which is only applied to Mr King and not to Rangers as a business – has been issued by the Takeover Panel.

A cold-shoulder order means that no entity or professional adviser regulated by the Financial Conduct Authority may act for Mr King on any transactions governed by the City Code on Takeovers and Mergers.

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The Takeover Panel ruled that Mr King had “acted in concert” with George Letham, George Taylor and Douglas Park, nicknamed ‘the Three Bears’ to acquire more than 30% of voting right in Rangers in late 2014.

The 2006 Companies Act dictates that entrepreneurs who hold a 30% stake in businesses are compelled to make an offer to buy remaining shares.

Mr King had fought against the ruling that he had to make an offer on remaining shares, telling financial investigators that 14% of the shares were controlled by a company called New Oasis Asset Management Limited, registered in the British Virgin Islands.

He eventually made an offer to shareholders earlier this year after the Takeover Panel brought a contempt of court action against the businessman.

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However, the panel continued with its own disciplinary procedures over the dispute and Mr King was found to have breached their code by failing to make an offer for shares at the time of the initial takeover at Ibrox, and also of providing “incorrect and misleading answers” to the executive during the panel’s investigation, as well as misleading them over “cash confirmation” when a share offer was eventually made.

Mr King argued that he had not deliberately misled the body but accepted other contraventions of the rules.

He told the committee that he had “learned a painful lesson and would be careful to comply in future”.

He said that cold-shouldering was not necessary, though he accepted that a sanction was inevitable.

The judgement said that a lesser sanction, such as a public censure, would not be sufficient and that the executive had argued that cold-shouldering should be in place for at least five years.

It read: “The executive’s case is that it is to be inferred from Mr King’s overall conduct that he is a person who is not likely to comply with the code and accordingly that the committee should so declare.

“Such a declaration would trigger the sanction known colloquially as “cold-shouldering”, a sanction which the executive submits should remain in place for not less than five years.

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“We would also add that Mr King’s prolonged refusal to procure a Rule 9 offer, along with his conduct in dealing with the executive during its initial investigation into a possible concert party, were offences of the utmost seriousness for which a statement of public censure would not be a sufficient sanction.”

Mr King was informed of the decision earlier this month and chose not to appeal the sanction.

He issued a statement via Rangers’ official website saying that his actions were in the best interests of the club and that it would not suffer as a result of the sanctions.

He said: “It is important to note that in its findings the Hearings Committee found no evidence of detriment to RIFC’s shareholders and further noted that any non-compliance by me with the rules of the Takeover Panel was not motivated by financial gain or commercial advantage.

“Quite the opposite. My investment was motivated – to quote the Hearings Committee – ‘solely for the love of the club’.

“RIFC and Rangers Football Club are not affected by the Hearings Committee’s ruling and the ruling does not impact upon my position as chairman and a director of RIFC.

“I have ensured that RIFC has complied with the requirements of the Code throughout the period of my chairmanship, notwithstanding that the company is no longer listed.

“RIFC will continue to comply with the code. The Takeover Panel has raised no concerns about RIFC’s compliance with the code in the more than four and a half years since regime change.”


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