The Secretive Mr. Whyte
10/05/2011 193 Comments
Only a handful of days after he completed his purchase of MIH’s 85% stake in Rangers FC for a pound, Craig Whyte has already signalled that it is business as usual. Those who might have hoped for an era of glasnost and some transparency in communicating with supporters about the running of their club, will be disappointed. Craig Whyte is already showing himself to be more Putin than Gorbachev. Hand-picked journalists attending Saturday evening’s inaugural press conference with Whyte were under a three-line-whip from Gordon Hay of Whyte’s PR firm Hay McKerron that there were two subjects that could not be mentioned:
- The tax case
- The source of the money used to buy Rangers’ debt from Lloyds
Draconian penalties were promised for anyone who dared cross these lines. Exclusion from future press conferences and no more “leaks” would be akin to removing life-support from those who have become dependent on succulent lamb from the table of the owner of Rangers. No one crossed these lines. Not one journalist in attendance asked about the only real questions that face Rangers just now.
Whyte chose to address the tax issue in a Rangers TV interview / presentation last night. I guess that it will take him time find pet-hacks with whom he can build the sort of trusting relationships David Murray had with Jim Traynor and Tom English i.e. “if I want it printed, you print it!” So, Whyte took solace in a media outlet which he now owns. Very brave.
Whyte’s statement that he does not believe that there is any chance that Rangers will lose the tax case beggars belief. Either the man is a liar or a complete moron. I doubt that he is the latter. Decoded, Craig Whyte’s statement on the tax case can be seen as an admission that there is no ‘Plan B’ for losing the tax case. The independent committee of the Rangers’ board appear to be right to be concerned about the lack of funding to pay a combination of bills that could reach above £54m.
Even I do not profess 100% confidence in any particular outcome. Much like the OJ Simspon trial, a patently guilty man can be found not-guilty in the face of a combination of excellent and incompetent lawyering. I know that the evidence against Rangers is extremely strong. It is hard to conceive of a logical defence that Andrew Thornhill QC can have offered. But Craig Whyte is 100% confident?
Sir David Murray has gone, but Rangers are still owned by a man who will deploy expensive PR resources to protect himself. It will be interesting to see if he is up for “defending” Rangers’ supporters in the same manner as Murray. Rangers fans should be asking why David Murray gave away Rangers for less than a millionth of a penny per share. A man who was asking for a £6m payout for three years, suddenly decided to give away Rangers FC on the same day that the First Tier Tribunal that would decide the club’s fate concluded hearing evidence? Of course, Murray did it out of a love for the club! That Murray has considerably more provable personal wealth than Whyte should also be a red-flag. Murray was in a better position than Whyte to personally support Rangers. (Of course, over 23 years in charge, Murray took out much more than he put into Rangers. Take a look at Rangers’ ‘related party transactions’ over the last 14 years). The simplest explanation for the deal is that Murray and Lloyds wanted to be off-stage when the curtain falls. Whyte’s motivations? We can only guess. He is either an idiot or his ‘Plan B’ for the tax bill is not one that many will want to hear just now.
Of course, the other issue Rangers fans should ask about is ‘Who is funding Whyte?” The answer to that question will explain whether this is really a rescue or a pillaging. I do not expect the question to be even posed by the Scottish media, let alone receive an honest answer. The same sources who told me on 19 April that Whyte had secured funding and was serious about buying Rangers, have told me that Whyte has contributed very little money personally. The exact terms of the package are unknown. Has Wavetower borrowed the money to buy Rangers? Or are the backers equity investors?
As things stand, Rangers are in as much debt today as they were last Thursday. Rangers’ debt to Lloyds has been purchased by Wavetower. Rangers FC still owe that £18m to Wavetower. (Interest rates may not stay the same). Additionally, Rangers also owe an additional £6m to other lenders and for negative working capital. Nothing has changed except that Murray and Lloyds have left the scene. Perhaps that is a cause for rejoicing amongst Rangers fans in itself, but they might have cause to prefer “the devil they knew rather than the devil they don’t.”
We can expect a media onslaught from Hay McKerron in the coming weeks. Every device to distract and deceive will be deployed. As I have maintained from the start, Rangers’ future depends upon the outcome of the tax case. Some shuffling of commercial paper has not changed that.