THE new Rangers board was last night urged to examine the legality of an agreement to pay Newcastle United a £500,000 bonus if they succeed in winning promotion to the SPFL Premiership this season.

 

The deal with the Barclays Premier League club, which is owned by shareholder Mike Ashley, was made public yesterday as the Ibrox club revealed they had made a £2.6 million loss in their interim financial results.

The money will be due to Newcastle, who announced a record annual profit of £18.7 million earlier this week, if Rangers clinch a place in the top flight as part of a loan arrangement for five of their players.

The signings of Shane Ferguson, Gael Bigirimana, Kevin Mbabu, Remie Streete and Haris Vuckic were made in February when Derek Llambias was Rangers chief executive and have been shrouded in controversy.

Only two members of the quintet have been involved with the first team - Vuckic and, for less than 45 minutes, Streete - and it has been confirmed that no medical examinations were carried out on players Rangers are paying £5,000 a week for.

Rangers fans reacted angrily to the news the Ibrox club would have to pay out the substantial sum if Stuart McCall's side manages to win promotion out of the Championship via the end-of-season play-offs.

Craig Houston, of the influential Sons of Struth supporters group, has called on the directors who seized power at an EGM at Ibrox last month to scrutinise whether the deal with Newcastle is watertight.

"We took a paltry amount on the first day of the transfer window for our most promising player (Lewis Macleod was sold to Brentford in January) and biggest saleable asset," said Houston.

"We were told that he had to go to help the club financially. But it now looks as we have given that much away to borrow five players - only two of whom have actually played for the club.

"That doesn't seem to be a very good bit of footballing business or, for that matter, financial business for Rangers.

"Since the end of the transfer window we have been asking: 'Who actually gave these guys a medical?' It looks as if nobody did. That is most disappointing aspect of the whole thing.

"I would hope the club can examine the legality of the agreement, but I am sure it has been tied up so nicely that Rangers will need to pay that should they go up."

Ashley, who had his application to increase his stake in Rangers to 29.9 per cent rejected by the SFA in December, was able to appoint two board members under the terms of a £10 million loan agreed in January.

The new board suspended chief executive Llambias and finance director Barry Leach after taking control at the general meeting last month and announced they would not be drawing down the second half of the loan.

"We were led to believe by certain individuals that this man (Ashley) was going to put £10 million into our club back in January," added Houston.

"We were told last year he was a billionaire with far greater wealth than anybody else who wanted to be involved and whose funding offer was far superior to any others which were on the table.

"But how wealthy an individual is isn't important. What matters is how much money they are prepared to give Rangers. He didn't actually want to give Rangers anything."

Paul Murray, the interim Rangers chairman, described the results as "disappointing" and bemoaned the "simply staggering mismanagement of the club in recent years".

Rangers revealed their financial results for the six months to December 31, 2014, had been compiled by independent reporting accountants Jeffreys Henry after Deloitte intimated they did not want to continue as auditors back in June.

"The old board put out a resolution to reappoint Deloitte as auditors at the AGM on November 27 - but they knew in June the company didn't want to continue and didn't announce it or try to find a replacement," said Houston.

"That beggars belief. It is just another indication of the mismanagement and poor corporate governance of the club in the last three or four years."

The figures reveal that Rangers had sold 24,589 season tickets by the end of 2014 and Neil Patey, a partner with accountancy firm EY, believes that is largely responsible for the £2.6 million loss.

"I would say the interim results are as expected," he said. "The bottom line is that Rangers would have hoped to have benefitted from being in the SPFL Championship with Hearts and Hibs far more financially.

"That they didn't is down to the dissatisfaction of the supporters and the low level of season ticket sales. From here, it is clearly about getting fans back onside and buying season tickets at a level they were at previously. Getting back into the SPFL Premiership would also boost revenue."

However, Patey warned that money would have to be spent in the near future upgrading Ibrox and Murray Park. "Judging by the comments from the new board members, money will have to spent on the maintenance of facilities," he said. "Very little has been spent on capital expenditure.

"Paul Murray implied that Murray Park needs investment after two to three years of very little investment. That will catch up with the club. A £1.5 million loan has been agreed with 'The Three Bears' consortium. More will be needed in the short term."