Rangers’ Circular Released


Craig Whyte has released the long awaited shareholder circular providing an explanation of his company’s takeover of the club.  The original document can be found here:

http://www.rangers.co.uk/staticFiles/4d/76/0,,5~161357,00.pdf

Some initial points:

The club’s debt has NOT been cleared:
As was reported on this blog, the statements made previously about clearing the club’s debt were misleading. What has transpired is that The Rangers FC Group Ltd (TRFCG Ltd), Rangers’ owners, have promised to waive the debt purchased from Lloyds if Rangers have managed to avoid insolvency in a period of 90 days after the tax case has concluded. In plain English, if Rangers win the tax case, Whyte will write off the debt (converting it to shares). If Rangers lose their ‘appeal’, then TRFCG Ltd will be protected by its guarantees over Rangers’ fixed assets. Note Whyte’s word ‘appeal’- so much for the claims that it is just an investigation and that there are no tax bills!

Fixed assets not intended to be sold:
“nor is it the intention of The Rangers FC Group to redeploy any of the fixed assets of the Club;”  However, as we have been discussing, this does not include season ticket sales.  This seems to be a confirmation of our interpretation of the MG05s filing last week.  Rangers’ future  season tickets revenues can be sold for cash now.

No schedule for promises of investment:
While the document is very specific about the timeline for when the debt would have to be written off, it is conspicuously vague about the timeline for any investment in the team & in repairs to Ibrox. Such additional investments, should they be made prior to the conditions for writing off the debt (i.e. before the tax case is resolved), will be added to Rangers’ debt and would be protected by the floating charge on Rangers’ remaining assets. (i.e. everything except a large chunk of season ticket revenues over the next four years).

Unequivocal declaration of ownership and 3rd party interests:
The document says that TRFCG Ltd is wholly owned by Liberty Capital, which is in turn wholly owned by Craig Whyte. It amounts to a denial that there are any mysterious backers – either as shareholders or as holders of formal loan notes or guarantees. (However, speculation can be expected over whether any 3rd parties need such formalities to make an agreement).

This is a quick summary of what struck me immediately. Without doubt, we will parse this document and find more to discuss and debate.

About rangerstaxcase
I have information on Rangers' tax case, and I will use this blog to provide the details of what Rangers FC have done, why it was illegal, and what the implications are for one of the largest football clubs in Britain.

1,222 Responses to Rangers’ Circular Released

  1. Burton says:

    adam says:
    18/06/2011 at 10:07 pm

    Burton, a loan, is something which is given, but is expected to be paid back or returned.

    No matter what happens, in any of the possible scenarios, The Rangers Football Club plc, will not pay that £18m to the parent group.

    For this reason, that is why I would suggest it is not a loan mate.

    In the same way, it’s not a crime if you don’t get caught, and a tree makes no noise if it falls and nobody is around. Fine, I see where you are coming from.

    Will Rangers pay back everything above £18M, do you think?

  2. Paulsatim says:

    adam says:
    18/06/2011 at 11:05 pm
    When it was owed to Lloyds, it WAS a loan as the club HAD to pay it back. The difference now is that WE DONT have to pay it back. How can something be a loan, if it is never to be paid back/returned.

    A bit like an EBT then?

  3. Duggie73 says:

    An overview-
    Rangers may go out of business, may be re-branded, may continue as before; they may be landed with the full tax bill,may settle for an intermediate amount, they may escape any liability for it; HMRC may choose to pursue any phoenix business playing football out of Ibrox, or they may choose not to ;Rangers’ dealings may be entirely open and discernible by those reading a blog or getting their news from the old media, they may remain opaque and undiscernible to all but those directly making the decisions; Rangers fans may gain some level of control over what happens to their club, any and all decisions may be done with them remaining completely in the dark with no say whatsoever; Rangers may pay no more than lip-service to the tackling of sectarianism for fear of alienating their own support, they may take a lead in ensuring that the SFA takes responsibility for its
    member clubs’ actions without relying on legal recourse from the police and courts; Whyte may be a philanthropic social reforming pioneer, he may be purely interested in making a quick profit at others’ expense.

    The only one of these possibilities that I feel is dimissable from following this so far is the possibiity of Rangers’ fans organising themselves so as to gain any control over the future of their club. Which rather makes it Whyte’s baw, and he can do what he likes with it…

  4. easyJambo says:

    Extract from an article in today’s Scotland on Sunday – Looks like CW is an avid reader of the blog

    We move on to the saga of HMRC, the whopping bill that may be coming down the track. Whyte’s mantra before, and now, is that his legal counsel says that they will win the case, but even if they don’t they have a measure in place to deal with it that will keep the club above ground. But here’s the stand-out thing. He reckons it could be years before this thing is over. “I’m aware of a website that has dedicated itself to talking about our tax case,” said Whyte of a site that claims to be in the know about Rangers’ financial affairs and regularly predicts a new kind of Armageddon for the club.
    “I’ve looked at it. What they’re saying is 99 per cent crap. The tribunal only starts in November so it will likely be concluded around March-time. Of course, there will probably be a series of appeals after that. This could go on for years yet. If we lose, we appeal and that’s another year. If we win, HMRC could appeal, so it’s not necessarily going away any time soon. It would be nice if it could go away sooner but it will run for some time yet.”

  5. daniel smith says:

    We move on to the saga of HMRC, the whopping bill that may be coming down the track. Whyte’s mantra before, and now, is that his legal counsel says that they will win the case, but even if they don’t they have a measure in place to deal with it that will keep the club above ground. But here’s the stand-out thing. He reckons it could be years before this thing is over. “I’m aware of a website that has dedicated itself to talking about our tax case,” said Whyte of a site that claims to be in the know about Rangers’ financial affairs and regularly predicts a new kind of Armageddon for the club.

    “I’ve looked at it. What they’re saying is 99 per cent crap. The tribunal only starts in November so it will likely be concluded around March-time. Of course, there will probably be a series of appeals after that. This could go on for years yet. If we lose, we appeal and that’s another year. If we win, HMRC could appeal, so it’s not necessarily going away any time soon. It would be nice if it could go away sooner but it will run for some time yet

  6. manila says:

    Just how “legally binding” is this Circular?

    What would be the legal interpretation of the word “ïntention”.

    The expirartion date of the Circular is set at 12 months from release. The hearing recommences in November, followed by deliberation and final judgement, possibly ending … say, at a guess, more than 12 months after the release of the Circular. Hhmmmmm. Will a fresh Circular have be released prior to this or will it be a case of “Aye, well guys, what can we say … the 12 months are up. Sorry”

  7. Palacio67 says:

    http://www.newsnow.co.uk/A/501686196?-11344

    A mention from Craig Whyte about his knowledge of a certain blog following the Rankers tax case, which he says is 99% crap. In RTC we trust HH

  8. Palacio67 says:

    Sorry Easyjambo, just seen your earlier post, beat me to it.

  9. Duggie73 says:

    Any and all interviews with Whyte are useless until he is asked, “so what will you do if you DO lose the tax case?”.

  10. Torquemada says:

    Johnobhoyo says:

    18/06/2011 at 9:00 pm

    Torquemada says:
    18/06/2011 at 5:32 pm

    _________________________________________

    Dearie me. Again I point out your mistake and you totally divert onto some bizarre comments about personal inadequacies. You said KDS members didn’t believe the record story – patently untrue. Not only did they believe it they were trying to say that they knew the gist of it long before Jackson broke his story.

    Anyone who can read the MG05 closely without jumping in head first and falling for the “released assets” jargon will know full well how it should be interpreted.

    If you want to continue to live in the Walter Mitty land that so many Celtic fans have been living in for the past three years then go right ahead. As it is, your steady steam of hate-filled drivel that often clogs up sometimes excellent forums such as this one and KDS leads me to the belief that I should just leave it at this. It’s like talking to a deranged brick wall at times I’m afraid.
    ______________________________________________________________

    A great many people on here also ”fell for” the released assets jargon.

    I’ll treat your other remarks with the contempt they deserve.

  11. adam says:

    Burton – “Will Rangers pay back everything above £18M, do you think?”

    Good question and im not sure is the answer as its not covered in the circular. I really dont know is the answer.

  12. Gaz says:

    adam says:
    19/06/2011 at 5:35 am

    Burton – “Will Rangers pay back everything above £18M, do you think?”

    Good question and im not sure is the answer as its not covered in the circular. I really dont know is the answer.
    ———————————————————————————————————————–

    Well you do really. The answer is yes, and then some, one way or another.

  13. Adam says:

    Not necessarily so Gaz. 2 Scenarios as i see it.

    We lose and an insolvency event takes place. Rangers FC plc as its known, pays nothing to anyone really.

    We win. £18 million waived for sure. The rest unknown to you and I as things stand.

    Taking the 2nd scenario, as the first is irrelevant, if you had asked me 3 weeks ago, “Will you owe Craig Whyte that £18m?” I would have said 99% certainly “YES”

    I have been proven wrong on that count.

    There is nothing in the circular or anything mentioned anywhere that he is going to seek a return on the Working Capital. Do i believe he will ? More “YES” than “NO”

    I am less certain now though, given my previous misjudgement.

    And i have to say, that from day one on here, i have pinned my reservations to the wall. In the last week or so, i have definitely been shifted and Im liking some of the noises. Still need to see words turn into action mind you.

  14. Gaz says:

    Adam says:
    19/06/2011 at 10:52 am

    Not necessarily so Gaz. 2 Scenarios as i see it.

    We lose and an insolvency event takes place. Rangers FC plc as its known, pays nothing to anyone really.

    We win. £18 million waived for sure. The rest unknown to you and I as things stand.
    ————————————————————————————————————————-

    Adam, I love your enthusiasm and applaud it. However the way I see it Craig Whyte will get his money back and then some.

    That is not a pop at Craig Whyte, or Rangers. It is just the way I see business, other than for the super wealthy. I do not believe that Craig Whyte is in that category or that Rangers are a “hobby” for him. To me this is a business deal for him. That involves making money.

  15. Adam says:

    Please done mistake my interpretations as enthusiasm Gaz. I call it as i see it.

    If there is an insolvency event, then for the reasons i outlined, I see him breaking even at best, but certainly not pocketting loads.

    If we win the case, then he will become like all other owners of Football Clubs. Losing money hand over fist at the expense of the Club.

    Football owners dont make money. Well 99% of them dont, to use a stat from the day. :-)

  16. Gaz says:

    I see him breaking even as well, no more than that. That’s why it’s a no loss gamble for him.

    Heads I win, tails Rangers cease to exist and a century of history is lost. Yes he can then create a “new Rangers” but he really wouldn’t be the same. Either legally or in the hearts of the bears.

    Oh and whatever anyone tells you, whatever anyone wants to believe. If a new Rangers is created, playing football in the SPL and basing themselves at Ibrox Stadium, HMRC will demand a security payment.

  17. Adam says:

    I think you underestimate the “hearts of the bears” I dont think too many will bother their backside to be honest.

    As for the last paragraph, well I disagree, but thats what a forum/blog is all about.

  18. Gaz says:

    Adam says:
    19/06/2011 at 12:54 pm

    I think you underestimate the “hearts of the bears” I dont think too many will bother their backside to be honest.

    As for the last paragraph, well I disagree, but thats what a forum/blog is all about.
    —————————————————————————————————————————-

    Disagree if you want bud. HMRC policy is to demand security in phoenix syndrome cases. Doubly so if the company folded as a result of debts due to tax avoidance.

    That’s just true, whether you disagree or not. I’m not debating this one with you, it’s not a matter of opinion, it’s a fact. Now they may obviously decide not to use the power, however that would be contrary to current policy.

  19. Adam says:

    Your facts may be true Gaz, but the unknown in all of this is how it will play out and end.

    And to be fair, for the past fortnight, we have had a few people(well one in particular) on here talking facts and stating they couldnt be wrong, but yet it turned out………………they were indeed wrong.

  20. TheBlackKnight says:

    It has not been denied that Rangers are not in or preparing for  administrative receivership.

    The debt has been ‘assigned’ to The Rangers Football Club Group Ltd (Wavetower)

    Despite claims the debt had been paid outright to Lloyds, clearing a reported £18m-£23m debt. There is no evidence to suggest this is the case.

    The floating charge over all of the assets has been released. A number of assets (being specific future ticket sales) have been retained as security.
    This was signed by PBetts relating to a historical (prior to 2003) floating charge held over all of the assets.

    The club has been for sale since an announcement to the Stock Market in 2006. 

    According to CW, The tax ‘investigation’ is ongoing and could take a number of years to resolve, despite this there are still assurances Rangers will win and yet a contingency, should they lose.

    Rangers directors Johnson and Bain and the manager at the time, Smith, all categorically stated Lloyds Bank was running the club, controlling it’s spending and revenue. Despite this, Rangers were not in administration.
    That would have been against the rules as set out by UEFA and the SPL. The bank even placed a financial controller on the board. The bank were running the club, but officially could not be seen to be running the club despite the club and the manager saying the bank was running the club.

    Perhaps some should ask if Lloyds still have the debt, perhaps held by another? Perhaps an AR? Perhaps CW?

    CW states that he reads this forum.

    His assertion is that the comments are posted by idiots and are 99% wrong. They are way off the mark!

    So ask yourself this CW, is the 1% A.R? No denial!

  21. Lennon says:

    @ Manila

    The circular is IMO worthless as CW is the shareholders, he owns 85% of the club.

    The circular is himself telling himself his intentions in regards to the companies he owns.

    If he doesn’t do what he says he will do then his biggest obstacle is himself – the other 15% are irrelevant.

    I initially thought that he was in it to liquidate and make a fast buck. Now I’m not so sure. I think he wants to control RFC but, and this is the key point, I cannot see why he would pay £18M for the privilege. RFC are clearly not worth that much ( as a going concern, not as a fire sale)

    His end game surely has to revolve around getting his money back AND retaining full control. How he does is not yet clear but with each passing day I am sure he will.

    And I look forward to seeing how he does it.

  22. TheBlackKnight says:

    I’m sure gordon smith could afford to give his £1 back :)

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