British billionaire Mike Ashley just won a court battle to keep a retail deal between Glasgow Rangers and his £4 billion ($US6.1 billion) Sports Direct clothing empire a secret.
Ashley, who has a net worth of £3.5 billion ($US5.5 billion) and even owns Newcastle United football club, convinced London’s High Court to place an injunction on the board of directors at Rangers, a day before a “requisitioned general meeting” of shareholders, instigated by Ashley, takes place at the Ibrox stadium in Glasgow.
As detailed live by freelance court reporter James Doleman during the hearing, the High Court judge ruled that Rangers’ board is not allowed to disclose the finer details of its merchandising contract with Ashley’s Sports Direct group.
The BBC reported that the Judge stated: “I am satisfied there is a real risk of disclosure tomorrow of confidential information.”
The judge also ordered Rangers to pay Sports Direct £20,000 ($US30,941) in legal costs, which includes “24 hours worth of telephone calls.”
However, according to Doleman’s court reporting, the judge told the Sports Direct counsel that she is “flabbergasted” by the legal costs the group was trying to claim.
[It is not immediately clear from the information available how much Sports Direct was claiming in legal fees.]
Sports Direct’s Ashley’s battle with Rangers’ boss Dave King
Ashley owns 9% of Rangers (4% personally and 5% through his MASH holdings company), making him the second-largest shareholder in the Rangers group. He also owns 75% of Rangers Retail.
Ashley managed to gain a lot of control over the club by owning the rights on branding, retail, the Murray Park training ground — mainly because he loaned the financially struggling football club money and by installing long term and loyal business partners into top positions at Rangers.
However, that crew was ousted in March by investor David King, who has the largest stake in Rangers, at 14.5%.
King and the Rangers board have since been locked in a bitter battle over cash.
Ashley has since asked for Rangers to return £5 million ($US7.9 million) back to him, after he loaned it to the football club in January this year. In fact, he loaned £10 million ($US15.1 million) at the beginning of 2015 but used half of it to pay back his own companies from an earlier £3 million ($US4.7 million) loan. The remainder was used as working capital in January so the club could stay afloat.
Yesterday, Ashley released a lengthy statement about how Sports Direct is “not a bank” and that the contract between the clothing group and Rangers had preceded his loan to the club.
Today, Sports Direct’s counsel asked a High Court judge for an injunction to stop RFC disclosing confidential commercial contract information between the group and Rangers, because of a range of articles in the British tabloid The Daily Record insisted that Rangers were “ready to blow the lid” on the contract.
Sports Direct accused Rangers’ board of leaking information to the Daily Record which disclosed a number of confidential details regarding the merchandising contract. It even cited information in a post by “trueblue92” on a fan forum page called “The Bear’s Den” as another example of a “leak.”
“The clear inference that the source of the information was the board itself,” said Sports Direct’s counsel in court. “Rangers have breached confidentiality.“
Rangers’ counsel said in court that “an article in a tabloid newspaper that is full of hyperbole” is not a justification for an injunction. It also denied being the “leak” in the Daily Record articles.
The legal representatives of both Sports Direct and Rangers were contacted by Business Insider and were not immediately available for comment at the time of publication.