Crisis ? What crisis ?

[Rovergrant]

I had hoped that there would have been a response by the Club to Robert Watt`s excellent and very perceptive posts. When Robert talks about ARFC we should ALL listen. Sadly, there has not been any, so here is my tuppence worth.
Robert briefly mentioned the issue of `new` posters. As I see it….some are mocked…others are questioned as to their motives as to why they posting… another guy uses his own initials – and they are called into question …. even this old `veteran` poster was told to p*** off yesterday!
Like me, Robert is concerned about the silence from the BOD, regarding the grave situation that the club finds itself in, a situation which could see the club lose its SPFL status and hence possibly bring its very existence into question. Recent history has seen some utterly flawed decisions by previous BODs, but what we must not lose sight of is the fact that members of the current BOD were members of those BODs and hence must be held complicit in those actions which now haunt us. If they had issues with those decisions, and failed to make representations at the time to alter or resolve them, then they should have resigned.
The last set of year end accounts (30th June 2017) was only signed off by the auditors after they included the rider `"From the results of our audit we must report that we do not consider adequate accounting records have been maintained and as a result have been unable to determine that we have received all the information and explanations that we considered necessary in carrying out our audit" In my opinion, having supplied financial data to company auditors for 25 years and never elicited such a comment, this statement calls into account an issue of inadequate corporate governance. Is this reason why two experienced businessmen who had relatively recently joined the BOD resigned ?…or was it because in Robert`s words, they were just pee`d off. Anyway, two good men walked…what sort of message does that send out to the business community ?

It`s probable that in the past there have been Rovers teams which have made starts to a season as bad as the current – but then there was no threat of having at season`s end to enter a play off scenario with the top non league outfit, in the knowledge that a defeat means loss of SPFL status and all the ramifications that that will bring. The decision to employ a manager, out of the professional game for 25 years, not even qualified to work as such in an SPFL club capacity, followed by his policy of signing raw lads from under 20s sides and lower league Juniors has proven to be disastrous. Yes I know there are financial constraints - personally I think the cuts went too far too quickly - but then again maybe the Bank had a big say in this although they hold a charge over the ground so they could never lose their money. We are left however, with a situation where the budget is spent and no finance in place to attempt to rectify - even in these closing hours of the Transfer Window – our position.

Robert concludes by taking the BOD to task over total lack of communication with stakeholders and fans – backed up eloquently by supporter Peter McClurg – those who advanced the club money up front by purchasing season tickets and those who lay cash down at the turnstyle at the matches. Both are correct, the BOD, by their silence are treating all with contempt. Their attitude seems to be …. Crisis – What Crisis?
Grant Cullen

[Deleted]

Grant it's just a lack of knowledge and experience at board level, it's as simple as that!

What this board has been extremely efficient at, is keeping control of the decision making process at board level.

The offer of help from any quarter is embraced from outside looking in, but then seen as a threat to control and not a solution to thier agenda.

Loyalty to protect control, hence why personal relationships is preferred to business skills and experience on this board.

While this exists people who can help will continue to be fustrated and alienated by the culture.

While creating this culture with it's controling nature, we can write as much as we want on here, but ultimately it's down to the board to decide if they love the club more than the control and personal status it may provide.

The board are percieved in some quarters of the fan base as the protectors of the club, may I ask "what are they protecting the club from"?

As Grant rightly says individuals sat on the previous boards who they are now blaming for the financial crisis?

Are they the solution or the problem, only time will tell?

[stewmelrover]

Ask 'New Rover': he'll know.

[Rovergrant]

Aug 30, 2018 9:35:09 GMT stewmelrover said:

Ask 'New Rover': he'll know.

Would it not be better if you addresed the issues raised in thread ?

[Deleted]

Ronnie Boyd approached me after the last AGM to confirm that he was stepping down due to health issues, as his blood pressure was causing concern. In the interim period there have been a number of appointments to the BOD, two of whom have walked the plank after very short tenure. I have listed here the Companies House record of comings and goings over the past 5 months;



Termination of Craig Downs on 12 August 2018

Appointment of Lorraine Simpson on 28 June 2018

Termination of Lindsay Hamilton on 17 June 2018

Appointment of Gordon Mcneill Lind on 2 May 2018

Appointment of Lindsay Hamilton on 6 April 2018

Appointment of Colin Woodward on 4 April 2018

Appointment of William Shields on 28 March 2018

Appointment of Mark Hunter on 28 March 2018

Appointment of Craig Downs on 28 March 2018

It is one of the main functions of the Chairman of ARFC to ensure a line of succession that will keep the club in safe hands. On seeing the appointments of Hamilton and Downs (and after making appropriate enquiries) I thought that one or other could have been the right type to take the club forward. As I am not privy to the goings on at Board meetings, I am unaware of why they chose to bring their connection with the BOD to an end. But it does seem strange that both did a matter of a few weeks apart.

That leaves the BOD consisting of Boyd, Haggerty and Benton + 5 remaining from the list. There seems to be a very heavy reliance on Supporters Trust members, whether that is good or bad, I don't know.

I stand to be corrected, but do not see the heir apparent within the group of 8. I have made enquiries regarding each of those involved, their input to the club, daily, weekly, financially, etc, and can't find anything to change my mind.

In a post above, Bingo states,  "The offer of help from any quarter is embraced from outside looking in, but then seen as a threat to control and not a solution to their agenda. Loyalty to protect control, hence why personal relationships is preferred to business skills and experience on this board. While this exists people who can help will continue to be frustrated and alienated by the culture".

I will shorten that to simply A SELF PRESERVATION SOCIETY that Ronnie has gathered around him.

If that is not the case, I'll be happy for Ronnie to advise me what significant contributions the new members bring to the table. I'm aware that Mr Woodward controls the accounting side of things, but other than that I don't know. Lorraine, Gordon, Bill and Mark are busy on match days, but does that justify a place on the BOD.   


Could this apparent cronyism be the reason that men of some substance have taken their leave. It would be interesting to get their input, but doubt we ever will!

www.youtube.com/watch?v=j-fWDrZSiZs

Robert Watt






 



  

[rab]

Aug 30, 2018 9:09:10 GMT @bingo said:

The board are percieved in some quarters of the fan base as the protectors of the club, may I ask "what are they protecting the club from"?

People who come in and run up unsustainable debts in pursuit of glory, putting the existence of the club at risk.

There is another way of looking at the current situation. The main priority is to pay off the loan taken out by a previous regime at something like 40% annual interest, otherwise the club loses its ground, or folds, or both. This has necessitated big cutbacks to the playing budget.

Now it may well be the case that the appointment of the manager and recruitment of the current squad was not the best use of the limited money available. We are in a league within a league of 4 teams who are looking to avoid finishing bottom - the other 3 are Berwick, Cowden and Stirling, and we play them all in the next 4 games. If we are still bottom after that, then we can conclude that the Lowland League is a virtual certainty.

It is gut-wrenching to watch us go from being competitive in League 1 to Lowland League candidates in a very short space of time. It is understandable that fans are frustrated and asking questions. But if we do end up in the LL, once the debt has been paid off we might be in a position to recover.

Any accusation that the current BOD care more about their positions than the club is clearly false. Whether they are the right people for the job is another matter. If there are people out there who are willing to get involved and lead the club effectively without running up more debt (whether current supporters or not), then I'm sure they would not be turned down. Except for the fact, of course, that there are supporters who want to put money into the club through new shares if the current shareholders would allow it.

[Deleted]

Rab, a number of points.

Ronnie, the current chairman, was on the BOD before the introduction of what you refer to as "a previous regime". That means that he was part of that regime and the decision making process regarding the taking out of said loans. As he had the Supporters Trust behind him, pressure could have been exerted on the then chairman, Mr Gillooly, to use discretion regarding the lumbering of huge debts on the club. My memory serves me very well regarding warnings given to various Supporters Trust members regarding the actions of that time.

It could be argued that because of the lateness of the resignation of the previous chairman on 1/7/16, there was little opportunity for Ronnie and his board to make serious savings for season 2016/17, as many of the players would have resigned by that date. However, before the commencement of season 2017/18, and despite the fact that it would almost certainly have resulted in ARFC "doing a Brechin" and having a miserable season, there should have been drastic cuts, given what was obviously becoming a real financial problem. That would have hurt for the season just past (we got relegated in any case), but allowed the club to have a realistic budget for this season.

Regarding the loans, Frank Meade advised Ronnie at the last AGM to contact the FCA regarding the legality of the loans, given that they were covered by assets with a value of virtually ZERO (the now defunct pie stall and some antiquated machinery). He also questioned whether the VAT paid on these loans was reclaimable. The loans were, as I understand things, guaranteed by an ex-director. You appear to know about the interest rate, do you know whether Frank's advice was followed. The club is hamstrung by this debt, which was incurred in essence to finance a couple of years of disgraceful overspend to achieve promotion and retain the position in the 1st division. We are paying for that now!

Regarding the issue of new shares, it is not like pitching up at the club to buy your season ticket. There are various obstacles to be negotiated; 1) the number of 'dead' shares the legal position of which has to be considered 2) the cost of a share issue is very large 3) how to value the existing shares and keep existing shareholders onside 4) how much could be expected to realise from a share issue. Various previous Boards have looked at this over the past 30 years and always reached the same conclusion, it is not worth the effort.

I should remind those who would like shares that I personally paid for 500 shares which became available and then arranged for Eddie Haggerty to distribute these equally to 10 of the ARFC diehards at that time (about 20 years ago). I did get the money back in due course. From memory, Bill Walker Snr and Junior received 100 between them, Cathy and Brian O'Hare got 50 each, Bucky got a batch, etc. More recently I have given a small number of shares to two other worthies.

Robert Watt

[rab]

Robert,

I don't know all the circumstances, but I would agree that others on the Board at the time should have exerted pressure on the then Chairman not to take such a course of action. They did not. So they made a mistake - and hopefully are learning from it now.

We seem to be in agreement that the club is hamstrung by this debt. It seems to me that this is the priority and it has to be paid back, even at a cost to the playing budget and potentially to our League status. Otherwise we won't have a club at all.

But I take issue with your comments on shares. Company Law has changed over the years and new shares can be created more easily and at a much lower cost than previously. I was a Director at Cambridge City FC and we did it successfully around 10 years ago - it was all arranged by a very competent accountant friend of the club. The only significant obstacle at ARFC to doing this is the reluctance of current shareholders to let it happen.

[Deleted]

A lot of heavy stuff here most of which I'll leave to those with more knowledge but one point I can't ignore. We will not survive a drop to the lowland league to rebuild. The club will die.

[stewmelrover]

We come back to the share issue: what is the mentality behind blocking the widening of it? As I have said before, I simply do not understand it. Can one of the people 'in the know' please explain the justification for this?

David Higgins

[Rovergrant]

I cannot comment on the reasons why individual(s) voted down the proposal to explore and cost a re-organisation of the Company`s shares. However, if minds were changed and this was to happen - and it needs to be able to raise a significant amount of finance - not just to give supporters shares to be retained for sentimental reasons and a sale went ahead, what is to prevent an individual buying up more shares than all the others combined, thereby taking full ownership of the club (the ultimate controlling party). That individual could then (despite the inevitable outcry)move the club - remember what the Steadman brothers did to East Stirlingshire in the late 60s - and sell the ground, which would bring to the seller a very healthy profit over his original outlay. At least the current set up, flawed though it is this scenario cannot take place, there being no overall controlling party. Therefore , I say, beware of what you wish for.

[Deleted]

Grant has hit the nail on the head.

I am sure (in fact I know) that the biggest shareholders do not see their shareholding as some sort of potential financial windfall, and they would be happy to increase the share capital if the correct conditions were in place. If, and it is a very big if, some wealthy individual, or group, came along with significant funds that would change the fortunes of ARFC they would be welcomed with open arms.

However, as Grant alludes to, there is no way that anybody in their right mind would accept a relatively small investment which enables an unscrupulous individual getting control of the club and its assets. 

My opinion, for what its worth, is that there has to be a large payment up front by a right minded investor, which would allow in the first instance significant improvements to be made to the stadium. I can't put a figure on that investment, but it has to be at a level that doesn't make it attractive to an asset stripper. The new shares could then be issued to that person retrospectively.

I understand that Grant contacted the chap who is investing his money in Townhead but was knocked back. Maybe, if put to him as an investment rather than a charity donation, the answer could change. Over to you Grant.

If supporters only wish to get a share for sentimental reasons, Ronnie & Eddie both have shares that are no longer necessary for being a member of the BOD. As Supporters Trust members should they be spreading these shares out amongst the others on the Trust? I will happily match in Preference Shares what they transfer to the supporters, with all proceeds going to the club.

As said in a separate post, this is not the first time that I have made shares available to the supporters, and I believe others should consider doing likewise, especially those shareholders who take absolutely no interest in the club.

Robert Watt

[Rovergrant]

Robert the guy is a blockbuster author. I saw him post on twitter - asked the question - and got knocked back. But...he was actually at the last home game (Elgin) and commented (on twitter) that he had received hospitality from the club and had spoken with Ronnie, Eddie etc...now whether they have said anything to him along the lines you suggested, of course that is something I am not privy to.

[rab]

Aug 31, 2018 8:06:21 GMT Rovergrant said:

what is to prevent an individual buying up more shares than all the others combined, thereby taking full ownership of the club 

Simple. A clause which states that any shares owned by an individual or organisation above a specified percentage (I'd say 25%, but it can be a matter for discussion) cannot be used for voting purposes. This would need to be agreed by the (existing) shareholders, of course.

Every time the shares issue is raised, people (often existing shareholders) often say.....ooooh....this is all too difficult.....and point out the obstacles. It would be better to concentrate on overcoming any obstacles, as well as how the share issue would work for the benefit of the club and its supporters, bearing in mind the need to set appropriate safeguards.

As I understand it before we drew Celtic in the cup, the Board had put out feelers to find out how much money could be raised through new shares and asked the AGM for the green light to take it further, but the AGM (or rather, the largest shareholder at that meeting) voted it down.

Maybe one day this subject will be taken seriously by the club and current shareholders out of necessity (such as to keep the club alive), but it would be better if it could be addressed before we got to that stage.

[Rovergrant]

Yes, via an EGM......but only if the sum to be raised would make a significant impact upon the club`s finances...for a few thousand - no...tens of thousands..yes. But who is going to commit that amount ?