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The Man With The Golden Share

By: Christopher Parrott
Date: 16/07/2001

MUCH has been said on the Fishy and the Official Site about the take-over bid from Brian Huxford, some for some against. The whole debate goes round in circles with much speculation surrounding the bona fides of the main protagonists and the money they can invest.

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This is inevitable, as there is not enough information in the public domain for any of us to make a robust judgement. I believe that most of the debate misses the key issues surrounding ownership, development of the club and risk.

Some Facts

First some of the background information. To issue new shares and/or change the articles of association of the club, the owners of 76% of the shares need to be in agreement. Dudley Ramsden owns 26% of the shares so no such development in the base of the club can take place without his consent. In effect anyone with over 24% of the shares will be in the position to wield a veto on these issues.

In effect Ramsden has a "golden share" People in this position wield more power than the face value of their shares would suggest; put crudely for an investment worth 25% of the club you get more than 25% of the power.

The Dilemma

If Bill Carr et al sold up to Huxford then Hux will hold more than 24% of the shares and be in the same position as Ramsden. Potentially this could lead to a standoff. With goodwill, the best interests of the club at heart, a win-win attitude and openness the two could agree on the way forward. But I wouldn't bet on it.

The veto wielded by Ramsden can stop development of the club's economic basis and potentially prevent it thriving (or even surviving) in the league. The counter-argument runs that this stops unscrupulous outsiders buying the club and either:

  • asset stripping (as with Brighton's Goldstone Ground); or
  • taking undue risks (any number of clubs you care to mention).
  • Either of these could leave us with no club to speak of. Seen in a positive light DR is acting as an "enlightened despot" using his personal power for the good of the many. The problem with enlightened despots is that they don't have the degree of accountability and consent expected in the 21st century

    The Answer?

    I believe most fans want the investment opportunities that Huxford talks about but want to make sure that control is not lost or undue risks taken. We are divided over which side of the fence we sit on, but we don't have the facts at our disposal to make the right judgement. But neither do we have sufficient confidence in any of the parties involved to trust them to make the right decision on our behalf. So how do we square these two apparently opposing aims - minimising the risk of the Goldstone Scenario versus further development?

    "...The simple answer is that an accountable body must hold the 'golden share'..."

    The simple answer is that an accountable body must hold the "golden share." This might be the local authority; it might be a Fans Trust. Whatever form this body takes it is must not be able to sell the share/give up its veto and its deliberations must be open for all stakeholders to see. It must have access to all relevant information and its actions must above all be accountable.

    I don't know about the legalities and I can see some immediate questions that need to be addressed. But I am sure that this is the way forward and that it is achievable. The rest is tactics and technicalities. The potential stumbling block is Mr Ramsden, but if he were genuine he would be happy to transfer (for a price) the necessary degree of control to a properly constituted body.

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