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Mike Ashley seized a 75% share of Rangers' retail income

The Rangers board have urged shareholders to reject Mike Ashley's demand for his £5m loan to be repaid.

Sports Direct owner Ashley had called for shareholders to decide whether to repay the funds, sparking a general meeting on 12 June.

However Ibrox chairman Dave King wants fans to reject the bid.

"The directors do not consider that, at this time, the repayment of £5m to Sports Direct is the best use of the company's resources," said a statement.

Ashley loaned the previous Ibrox board £5m in January, but used the opportunity to take security over club assets like Murray Park and famous trademarks, and seized a 75% share of the club's retail income.

In addition to the loan, Ashley and Sport Direct's parent company, Mash Ltd, want answers on the club's de-listing from the AIM stock Exchange and the terms of a £1.5m loan from Douglas Park, George Letham and George Taylor.

"The company has taken advice from Senior Queen's Counsel on the terms of this resolution and been advised that it would not, in any way, oblige the directors legally," said a statement from the Rangers International Football Club PLC board.

Rangers failed to win promotion to the Scottish Premiership when they lost to Motherwell in the play-offs

"It seems to the directors that Sports Direct no longer wishes to make the facility available to the club and that Mash has put ordinary resolution 1 to the GM [general meeting] to assist Sports Direct in this regard.

"It is not clear to the directors why this would be in the company or its shareholders' interests."

The Ibrox club face at least another season in the Scottish Championship after they were defeated 6-1 on aggregate in the promotion play-offs by Motherwell.

Rangers have added a second resolution to the agenda which calls for their contracts with Sports Direct to be renegotiated.

The statement added: "The directors are concerned with the continued and dramatic reduction in income generated by retail operations.

"The directors are aware that many supporters of the club will not purchase club merchandise from Sports Direct because they do not believe the current contractual arrangements between the club and Sports Direct adequately reward the club.

"The directors very much want to improve relations with Sports Direct and have made that clear to Sports Direct's senior executives. However, this has to proceed on the basis of mutual understanding, respect and reward.

"In the directors' view, if matters continue as they stand, this will not be to the commercial advantage of either the club or Sports Direct."