Duff and Phelps, Rangers administrators, have suggested the rebuilding of the crisis stricken club have been seriously undermined by a 12-month signing embargo handed out by the Scottish Football Association and will appeal the decision.
The punishment, which prohibits them registering any player aged over 17, came with fines totalling £160,000 following a three-day hearing by an SFA judicial panel last week.
Duff and Phelps reacted with “utter shock and dismay” to what they labelled “Draconian” sanctions arising from the SFA’s independent inquiry into the club’s finances and appointment of owner Craig Whyte as chairman.
Rangers vowed to appeal but the decision creates another obstacle to completing the sale of the club with the party apparently closest to a bid, American Bill Miller, having stated his offer was dependent on his new club receiving no penalties.
The inquiry last month ruled Whyte “not fit and proper” and the Rangers chairman was expelled from Scottish football for life and given £200,000 in fines.
Joint-administrator Paul Clark argued the club were being unfairly punished for the actions of their owner, whose withholding of tax payments sparked their descent into administration in February, with the bill now more than £14million.
Clark said: “The thrust of the charges against the club focused on non-payment of payroll taxes and evidence was produced that all such decisions in this area were taken by Craig Whyte during his tenure.
“Given this evidence, it is difficult to comprehend that the disciplinary panel has seen fit to effectively punish the club even more heavily than Mr Whyte. As everyone knows, it has already been decided he is not a fit and proper person to run a football club and any further punishment on him will have little or no impact.
“However, for Rangers, a ban on signing players will seriously undermine the club’s efforts to rebuild after being rendered insolvent. Furthermore, we do not know how bidders for the club will react to these sanctions and what affect they will have on their proposals.
“The club has asked for full written reasons for these decisions and intend to appeal against the findings.” The outcome of the disciplinary charges came towards the end of a day initially earmarked as the time Duff and Phelps would announce a preferred bidder.”