Mr Ahmad was one of the key members of Mr Green’s consortium which bought Rangers* last year.
(By Rangers* I mean the assets and business which make up Rangers Football Club and which were bought by the company which is now 100% owned by the PLC – clear enough?)
In fact, if one accepts the version of events put forward by some of the Rangers-supporting bloggers, Mr Ahmad in fact pulls the strings of Mr Green and is the eminence grise behind the recent boardroom strife at Ibrox.
Mr Ahmad is now, according to many press reports and to some detailed posts on the blog of my good friend (though we have never met) Bill McMurdo, proceeding with a claim against Rangers for £3.4 million of damages for his departure in April.
Mr Ahmad was quoted on the STV News website saying:-
“It’s true the club does owe me money. Charles Green has agreed to tell the truth if it goes to court, i.e. I am due a five per cent bonus on all the commercial deals I negotiated on behalf of the club.
“I am hardly going to turn my back on a bonus which is due to me when I’ve directly negotiated £67m worth of contracts which benefit the club over the next five to ten years. Neither I nor Charles wanted this to go to court as we are substantial shareholders. Charles had already brokered a deal with the club for a fraction of the full liability but the club has not signed up to it.
“I had also offered to reinvest all my bonus proceeds plus an additional extra £500,000 of my own money back into the club.”
Mr McMurdo detailed in his post where Mr Ahmad said, in his own words, the £67 million figure came from:-
Sports Direct Puma is a 5 year contract and should produce profits of £4m per year for the next 5 years.
That’s £20m of benefit to Rangers I have directly negotiated on Puma.
£12.5m pre-IPO cash I directly negotiated and introduced.
£23m of IPO Cash I negotiated via Cenkos.
By buying Albion Car park I saved the club £3.5m over 10 years as lease was an astronomical 350k per year.
On Azure I got them to cough up another £7m over existing contract.
Bought Edmiston House for £1.5m which when developed will bring £2m per year into club.
My 5% bonus is only based on cash profit into club. Total size of Puma deal over 5 years is circa £100m of cash-flow but I’m only making my claim on the profit Rangers would get i.e. £4m per year for 5 years if that makes sense.
I was speaking about this with a group of experienced and wise lawyers yesterday, and it was noted by all of them that, according to Mr Ahmad, “Charles Green has agreed to tell the truth if it goes to court”!
If the case ever made it to a court (which is highly unlikely in my opinion) that comment would give the lawyer cross-examining both Mr Ahmad and Mr Green some heavy ammunition. After all it implies that there would be a possibility that, despite taking an oath to tell the truth, Mr Green might not do so if it did not suit. On top of Mr Green’s previous admission that he lied to Craig Whyte to get him to do what he (Green) wanted regarding Whyte’s shares, there is a lot of scope for Mr Green to be questioned about whether or not he is being truthful.
Mr Ahmad’s departure from Ibrox was very odd.
He was described in the Rangers International prospectus as one of two “Key Employees”, the other being Ally McCoist, “still the club’s all-time leading goalscorer”. He left his role as Commercial Director late in April in the aftermath of the allegations about Craig Whyte’s connections with Charles Green and the suggestion, strongly denied by Mr Green, that Mr Whyte was actually the owner of a Rangers subsidiary company.
Mr Ahmad’s fate was sealed, apparently, when a Rangers fans’ website alleged that he had been posting comments on a message board for Rangers fans, and revealing secret boardroom information, all under the pseudonym “IAmRangers”.
At the time authoritative Rangers bloggers suggested that he was dismissed from Rangers with no compensation.
At the time I wrote:-
“That, to be frank, seems rather surprising. Even in a clear case of gross misconduct (and from what has been made public this is a long way from being confirmed as that) company directors and senior staff usually are successful in reaching a compromise settlement, as the alternative can be a long, expensive and embarrassing court battle for the company.”
In addition the independent report prepared by Pinsent Masons seems not to have established any wrong-doing on Mr Ahmad’s part in connection with Mr Whyte.
From a legal perspective there are some interesting points. First of all, against whom does he make his claim? After all, he cannot sue “Rangers”.
(That is not, under Scottish rules, strictly true as a defender can be sued under a trading or descriptive name. However that runs the risk that, if decree is granted against the trading name, it turns out not to be the correct party when the decree is enforced – although that, in this case, could lead to the bizarre situation of the company denying it was “Rangers”.)
Mr Ahmad was said to be the Commercial Director of “Rangers”. He was however never a company director of RIFC PLC but instead was a director of the Rangers Football Club Ltd (formerly Sevco Scotland Ltd). Some questions arise.
- Was he an employee of the PLC whilst still being a director of the subsidiary?
- As the PLC did not come into existence until 16th November 2012, and the first “Rangers” Directors only appointed in December, Mr Ahmad could not have been employed by RIFC PLC until then. Did he sign a new contract with the PLC?
- Did he transfer to the PLC via the TUPE regulations?
Apart from the issue about which entity he actually sues, the next one relates to his contract.
- Did he have a written contract with “Sevco”?
- Did he enter into a written contract with the PLC?
- What did the written contract, if there was one, say was his “cut” of income he brought in?
- How was his contribution defined?
- Does it include profits not yet achieved (and which might never come into existence)?
- Does it include capital raised before the share issue?
- Does it include the capital raised as part of the share issue?
- Is Mr Ahmad claiming he is due a 5% return on the capital he himself invested to acquire his 2.2 million shares?
- Does it include money raised before the incorporation of the PLC? (It must do, as all of the matters mentioned above (or almost all) pre-date the incorporation.
- If his contract was not written, then who agreed it with him? Was it Mr Green or Mr Stockbridge, or both?
None of which is to say that Mr Ahmad has a valid claim or does not, but rather that, as is often the case, there are many questions still to be resolved, even before the case ever gets to a final hearing.
There are, within the Companies Act, restrictions on paying compensation to directors for “loss of office” unless approved by the shareholders. However, if Mr Ahmad’s claim is against the PLC as his employer (or against Sevco) he is unaffected by that rule. Either way his claim is not against a PLC of which he was a director (and so far at least there is no mention of a claim for “loss of office” in the media, although that would almost certainly be part of his case).
Mr Stockbridge (who one should remember came to Ibrox from Zeus Capital with Mr Ahmad) is quoted saying, in relation to the claim:-
“We are aware of this but it is without legal merit and any action will be robustly defended on behalf of the club and its fans.”
Terrible when friends fall out, isn’t it?
Posted by Paul McConville