Usmanov bemused by Arsenal rejection

Second-largest shareholder Usmanov has had his £75m rights issue rejected by Arsenal (AP)

The Russian oligarch Alisher Usmanov last night cast doubts on whether Arsenal can compete in this summer's competitive transfer market after the club's board rejected the multi-millionaire shareholder's proposals for a rights issue.

The Usmanov camp was bemused yesterday to find that the Arsenal chief executive, Ivan Gazidis, had slipped in the board's decision to reject the rights issue at the end of an interview for the club's website, largely devoted to a discussion of players.

The £75m rights issue was intended to alleviate a debt of £320m on which the club plays annual interest of £20m, and provide more money for players in a summer when £10m on the Ajax defender Thomas Vermaelen is the sum total of Arsenal's spending and a prime target, Fiorentina's Felipe Melo, seems lost to Juventus for £22m.

"Based on financial information that only they have, the board have informed us that they are confident they have adequate financial resources to support the manager to strengthen the squad, to weather the property downturn, to renegotiate the Highbury Square loan on good terms and to deal with the continuing difficult economic conditions," said Usmanov's Red And White Holdings. "However, we will keep the situation under close review."

Usmanov is understood to have been ready to answer the board's concerns that the rights issue was his own device for securing a greater control of the club for his investment.

Though a rejection of Usmanov's proposal was widely expected, it came as Gazidis suggested the purse strings would not be loosened. He said: "Simply spending money in the transfer market does not make a team or guarantee success. The focus is still on developing young talent".