Rangers: fakeover or takeover?

Today’s SKY Sports reports that Lloyds have cleared the way for Craig Whyte to complete his takeover of Rangers is interesting.

As others have noted, is this finally the Messiah or is it yet another round of PR headgames?

When it comes to media manipulation and Rangers FC it is hard to be too extreme.  We have seen decades of Sir David Murray’s spin-machine at work.  Now that it is about serious issues, we have seen some incredible stuff in the media.

So what is it?  Fakeover or takeover?  I have seen nothing that indicates that Craig Whyte has the wealth necessary to conclude such a deal with or without the taxcase. (I have looked).  A trail of shell companies with a very poor track record of compliance with Companies House filing requirements and transactions that never seem to be much more than a few hundred thousand pounds.  Let us not forget that he was recently taken to court over a measly £80k for building materials.  (Odd that I did not find any companies in his portfolio that resold building materials.  Anyone know the outcome of this case?)
But let us just suspend disbelief and go with the idea that Whyte does have some money.  I would question the sanity of anyone who was willing to meet the stated price for Rangers.  So I refuse to believe the story as it has been spun, a  £33m purchase that would clear the debt and give MIH a nice consolation prize. Even if sold for a much lower price or just given away, that is not the end of the issue.

For Rangers’ problems to go away, he needs to have deep enough pockets to be able to pay off the tax bill. Stories that someone else will guarantee this are incredible. Any guarantee that does not include £60m in cash going into escrow is not worth the paper it is written on. For when HMRC call, they will not care for pieces of paper and promises. If not paid on time, it will still be Rangers FC who are forced into administration. It could take a couple of years for Rangers’ new owner to force a guarantor to pay up. His shares in his company would be long gone by then. Whyte’s legal recourse would be to take the guarantor to court. If that guarantor is Sir David Murray, I would advise caution. Companies House records show that Sir David has been moving at least some of his assets into offshore trusts.

The guarantee of a man who may not have any or many assets in his own name is not worth much at all.

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 for what was (updated) one of the largest football clubs in Britain.

71 Responses to Rangers: fakeover or takeover?

  1. Paul says:

    You would have to think that Ranger’s half yearly results must either

    1/ include the tax bill as a potential liability
    2/ include a write-down on fixed assets – Murray Park & Ibrox

    You can bet that there’s bad news in the financials tomorrow or this tripe wouldn’t have been fed to the press today. If the story was that debt had been slashed by improved income from the league win & Champions League income they would that were the headlines. Not a fakeover.

  2. Could be just coincidence about the dates, but if you want to get a bonus for reducing Rangers’ debt by 30 June by as much as possible, you had better keep hope alive through the season ticket renewal window.

  3. BlackCity says:

    It seems that reality has little bearing on anything in this latest supposed twist in the ownership of RFC.

    You’ve alluded to the slapdash approach that Whyte’s businesses have to their legally required filings at Companies House whilst also suggesting that many dessicated husks make up his ‘portfolio’. This leads me to a question that I’ve not considered in all of this.

    If, through some miracle, Whyte turns up with the requisite cash, is there any fit and proper owner test in Scottish football? I know that the one in England is widely perceived as being worth less than the paper it’s written on (see The Guardian’s David Conn’s investigations into the ownership of Leeds United for further discussion). Is there some other rump of a portfolio that we do not know about in some off-shore haven? Are these shell companies merely the detritus of some other larger empire? If so, where did the money come from to buy Rangers? If not, even more importantly, where did the money come from?

  4. Auldheid says:

    I have a theory on the fakover based on Operation Mincemeat


    or for those of the black and white movie generation “The Man Who Never Was”.

    The theory is that the Whyte takever is a fakeover, it is an illusion that serves a number of purposes starting with keeping the Ranger support in hope (or the dark) whilst fate takes it course to the more sinister enabling the SFA to approve Rangers licencing application, particularly on them being a going concern in season 2011/2012 when the size of the tax bill should be known.

    The licencing rules are complex but they do ask questions that require assurances and it is hard to see what assurances can be given, unless the man who never was is fitted up with an identity that would enable the SFA to say that Rangers have an administrative free future.

    That licencing process is already underway and has until the end of May to be completed. Details are at

    Click to access Policy%20Statement201011.pdf

    and part of the rules are at


    where A 51

    Written Representations Prior to the Licensing Decision looks relevant but others with more legal training might wish to comment.

    My understanding is Rangers face no problems with their licencing but how the tax elephant can be discounted, especially with no takeover alternative (back to my theory) is beyond me except the SFA wanting to protect our game by protecting Rangers. Such a less rigorous and disrespectful application of their rules would of course cost Celtic big time and fly in the face of the

    Joint Statement by SFA CEO after the summit.

    5. We therefore agree the following:

    * To ensure that the existing rules and regulations of Scottish football are rigorously applied and respected

    Remember it is only a theory 🙂

  5. There is no ‘fit and proper person’ test for ownership of Scottish clubs.

  6. Pedro says:

    I have heard the season ticket story before. One I used to buy into.

    However, if true, its a bit of an elaborate set up just to sell season tickets. Get the bank, Murray, Whyte, Ellis all to take part in a big sham? Might be true, but seems far fetched.

  7. A number of issues with this theory, but the SFA need only apply a strict interpretation of their own rules to grant a UEFA license for next season. I have gone through the rules in detail and cannot see where the SFA could avoid granting a UEFA license to Rangers next season even if they wanted to exclude them. -assuming that all 31/3 filing requirements and conditions are fulfilled.
    And to be fair, an organization whose job is to promote Scottish football cannot be expected to take discretionary actions against Rangers or any other club. Coefficients, money, and prestige of our game would all take a dent if either of the Old Firm teams were replaced with Hearts due to some administrative ruling rather than footballing merit.
    Celtic fans may pray for it, but this particular one will not be answered. Rangers will get a UEFA license for next season.

  8. Not if there are individual executives whose bonus is tied to debt reduction by 30 June. As this will likely be the only year of significant debt reduction, this will be the only year in which such troubleshooting executives can actually get a meaningful payoff.

  9. Auldheid says:

    So Lenny’s ban will be the shorter one then 🙂

    Cheers. I accept that when it comes to applying discretion Rangers never lose. It is when such discretion disadvantages Celtic, as it usually does, I get concerned about.

    Best bet is beat them to the title then.

  10. SeltikBhoy67 says:

    Here is a link to that article I tried to post last night, I couldn’t find the original link but managed to track it down on a Hearts blog.


    What say does this Republic of Ireland business man have with negotiations if any ?

    I also heard on one of the phone in’s that Sir David Murray and Craig Whyte after due diligence where both happy with the deal and some sort of Gentleman’s agreement was made and it was just a matter of finalising all the finer detail’s regarding the paper work and the deal was as good as done, so according to this article I posted the link to if Lloyds are now the major share holder’s of both MIH and Ranger’s has Sir David Murray the authority to make that decision ?

    And something else I was thinking about the other night, I seen Craig Whyte’s business portfolio past and present and it was far from impressive, hardly the thing you would expect from a billionaire/millionaire,(if he is either) which I doubt he is, anyway this guy Andrew Ellis a few month’s ago it was reported he was being financially backed by some Russian firm, is it possible that Ellis is still the one being backed by a silent partner and Whyte is just being used to front the deal ?

    I also was thinking how Dermot Desmond is viewing this situation, Scottish football need’s both Celtic and Ranger’s, if the long term effects of this situation Rangers are in are going to be serious or damaging financially wouldn’t this be a concern for Dermot Desmond’s investment ? I’ve been thinking about this a few month’s back and then when I seen that article with the ROI business man now involved I’m thinking is Dermot Desmond advising or calling in favours to help Sir David ? I’m probably putting 2 and 2 together and coming up with 10, but just thought I’d ask.

    SeltikBhoy67. Hail Hail

  11. Your one hope is for an administrative error such as the DHL driver getting lost in Shawlands tomorrow on his way to deliver the Interim Report. The SFA regulations allow no discretion for late filing of this document. Whether we will be told if it is filed or not (and meets the review standards) will be another issue. I cannot imagine that this will not be done. The other accounting requirements are easily enough fulfilled just by ensuring that that there are no football related overdue payments as of close of business tomorrow.

  12. I remember the article. Assuming that it is accurate, the trustee, regardless of nationality, will have no say in any of these negotiations. Readers of this blog will have had a good primer in trust law already. Legally, Sir David does not own these MIH shares, but will be able to exercise total control and would remain the beneficiary. The trustee will be obligated to transfer the shares on Murray’s instructions.
    The idea of placing these in trust is that technically, Murray does not own them, so he does not have to list them as assets.

  13. JohnBhoy says:

    Craig Whyte has been told by the Takeover Panel to ensure that “funds sufficient to enable the cash offer to be implemented in full are placed on deposit with a bank in the United Kingdom and for such bank to confirm to the Executive that it is in receipt of such funds”.
    He was told this 11 years ago.
    He didn’t do it. The takeover fell through.
    Full details here: http://www.thetakeoverpanel.org.uk/wp-content/uploads/2008/12/2001-02.pdf

    PS, Sorry for rising to the bait earlier on. (;-0)

  14. A defamation repeated is still defamation. So trolls who plant libels on posts under the guise of trying having a debate (with the obvious intention of setting the blog up for a defamation case)- will be blocked.

    The blog was born within the last few days, but I was not.

  15. Andrew Watt says:

    BBC reported that HMRC have agreed a settlement with Rangers.Allowing the sale to go ahead.


    Do you know anything about this?

    Is it feasible that they would accept £15 to £25 million,and settle out of court,

    and that refusing the £10million was just a starting position?

  16. The previously reported position was that discussions over the penalty could be discussed upon receipt of £24m + £12m interest.

    The popular myth is that HMRC still does pennies on the pound deals. That would just create an incentive to delay or avoid paying tax. Why would anyone pay the full amount on time?

    What exactly did they say? Did they claim (as they have done before) that Craig Whyte has negotiated this deal? Well, they just would never deal with someone who does not legally represent the club.

    So to answer your question, I have not heard anything about this, but I will very shortly if there is any truth to this.

    This aspect to this story convinces me more than anything that this is all an elaborate fakeover to get Rangers over some timeline without a meltdown in fan morale.

  17. me 2 says:

    Checking this blog daily now, keep up the good work – had no further input from “me”? Pity as (s)he seemed to have your interests at heart or maybe they trawl the internet looking for bloggers putting themselves in danger of breaking confidentiality agreements.

    Any sign of the accounts yet?

    I see SSN have a non story about lloyds clearing the way, I would have thought it matters not to them who owns the club as long as they get paid.

  18. A flurry of PR placement this evening. BBC claiming that Rangers have settled the tax case. Trust me on this there would be a TV extravaganza with the Rangers’ executives most worried about this case if this was true.

  19. V for Vendetta says:


    Do you think if this goes through that Mr Whyte would then go down the LLC route?

    And if so, would Rangers then become a flow-through entity (FTE), thus limiting liability, meaning that the owners of the LLC, are protected from some or all liability for acts and debts of the LLC depending on current laws?

    I’m not up on the current Tax Law, but if he was able to do this it would be a master stroke. Then of course, the asset stripping would start because that’s what venture capitalist do!

  20. me 2 says:

    I have been taking a lot of what the media say about this with a pinch of salt, so much so i now have hypertension lol

    Is the motivation for delaying the mid year results (expected to be superficially good) to deflect away from the fakeover petering out yet again only to arise once more come then end of the season?

    Roll on July/August

  21. me 2 says:

    must have missed this, interesting that such a young blog would be attacked so forcefully

  22. Brendan says:

    Is it possible that Rangers have at some point been trading insolvently and Lloyds actually stepped in to protect all parties,?

  23. MaloneBhoy says:

    While I hope HMRC get the maximum amount possible I will say this.

    Although they will not settle for a reduced fee the fee due in itself will probably be up for debate. Speaking from experience having dealt with a tax investigation for the company I work for it is very rarely black and white when it comes to unpaid taxes.

    In our situation HMRC were originally claiming “x” amount but eventually agreed that only “y” was due (which was about a quarter of what they were trying for in the first place. The Rangers case may be a bit more cut and dry than our own one though.

    Also, interest isn’t a huge amount (about 4-5% of what was due per annum) and isn’t calculated on the full whack times however many years it’s been going on for, it’s based on what was owed each year.

    I don’t know the figures that should be due and when so would this still make it £12m in interest due?

    The pessimist in me wonders if any part of the salary could be allowed to run through the system they used? That would then be deducted from the total. The optimist hopes that it’s the maximum due and into administration ASAP.

  24. That is as good a theory as any.

    I really don’t have an axe to grind and I am not praying for the end of Rangers by any means (unlike most who seem to have joined this discussion in the last day).

    However, I am disgusted at the actions of Rangers’ executive management and the media puppets who live in their back pockets. What I am sure of is that what we are being told is not true, because it simply does not make sense.

  25. MaloneBhoy says:

    My calculation (I’ve no idea if they’re right) works out Rangers should be due to pay £19m in PAYE and £5m on the NIC bringing it to £24m which seems right*. But I’d only suggest there’d be £6.4m interest due.

    * Those calculations are based on employers’ contributions to NIC but since the employee’s contributions may not have been paid it could be an additional 10% – or would these be paid by players when making their end of returns for income anyway?

  26. Boab says:

    If Rangers have settled the tax case who told the BBC. I wouldn’t have thought it would be HMRC, so one has to assume it would need to be Rangers themselves.

    Reminds me of when Mr King announced to the World that he had settled his position with SARS, only for SARS to come out shortly after to say that was not in fact the case.

    There seems to be a lot of manipulation going on here. On the night before Rangers are compelled to put out their half year report suddenly their tax position has been sorted and a new owner has been found. It’s all very … convenient.

  27. Brian says:

    All that seems to have happened, is that the bank has put a value on the direct debt that it is owed. Hardly newsworthy. Doesn’t change anything, as far as I can see.

  28. You have the underlying bills correct. To get the interest correct, you need to apply an interest rate of 4% and you need to compound the interest annually based on how much was paid in when. There is room to quibble about compounding periods, but you should be in the £10-12m range.

  29. A Roman says:

    perhaps i’m a serial pessimist but I can’t help thinking that Whyte will make the deal and buy Rangers out…. Where that leaves a Celtic board that oversaw a fiancially ner screwed Rangers win 2 leagues in a row is the biggest worry….

  30. Not Me says:

    On penalties, it is my understanding that those used to be based on how “helpful” the taxpayer had been. So if someone was totally compliant they would get a lesser penalty than someone who had obfuscated and argued every point. That was decided by the authority.

    Would this be the case or would the matter of a penalty be decided by the tribunal rather than HMRC themselves. If it’s HMRC which decides on the level of penalty would that also be open to appeal, as a separate issue.

  31. Boab says:

    On penalties, it is my understanding that those used to be based on how “helpful” the taxpayer had been. So if someone was totally compliant they would get a lesser penalty than someone who had obfuscated and argued every point. That was decided by the authority.

    Would this be the case or would the matter of a penalty be decided by the tribunal rather than HMRC themselves. If it’s HMRC which decides on the level of penalty would that also be open to appeal, as a separate issue.

  32. MaloneBhoy says:

    These are the figures I got (total amount due by the end of each year on the left then interest at 5% of the total+the interest from the previous year):

    0.69 0.03
    1.90 0.10
    3.07 0.16
    5.61 0.29
    10.30 0.53
    13.99 0.73
    17.69 0.92
    21.15 1.10
    23.79 1.24
    24.31 1.28

    Or should the interest be added to the total for each year (effectively interest in interest)?

  33. That is still the case. The degree to which a company has been cooperative plays a large role in what, if any, penalties are due. A company which has followed professional advice and simply was given bad advice would still have to repay the tax plus interest, but would not normally be subject to penalties. That is not the case here.

    Rangers FC have obstructed and misled HMRC at every turn.

  34. Malone,
    You have to charge interest on the interest. That is why compound interest is great when you are earning it and toxic when paying it. The interest is now running at over £2m per year because of the length of time since the scheme was implemented.

  35. Boab says:


    Yes, you have to add interest onto the interest, it’s calculated as compound interest.

    So 100 at 10% = 110

    The next years it is 110 at 10 % = 121 etc.

    I’ve used 100 and 10% for simplicity obviously.

    So the older debt will compound over a longer period and there will be interest (at commercial rates) on the interest as well as the initial sum.

  36. Takeover says:

    You are starting to sound slightly more sheepish and unsure of yourself.

    you said this blog was pointless and would jump off a bridge if Craig Whyte bought Rangers and the tax issue was dealt with, i am looking forward to both these things happening 🙂

  37. Absolutely correct. It is perhaps going off topic a little, but Celtic’s failure to take advantage of Rangers’ weakness over these past 3 seasons is comical. Questions should be asked about the competence of a leadership team that thought Tony Mowbray was the answer to anyone’s prayers. However, I think everyone who watched Scottish football over this period could see that the decay had spread through the team quite some time before Gordon Strachan departed. Walter Smith did have the benefit of a large cash injection after the Unirea games, but over 2 years later, the fact that the SPL is still neck and neck should be an embarrassment to Celtic.

  38. I think we may have cleared up the calculation in other posts. 4% compound interest (compounded annually) gets you to just over £10m. If you use shorter compounding periods, this sum rises.
    Your point about HMRC flexibility is one that should be addressed. If there is genuinely a grey area in law, where reasonable people can see that there are legitimately different ways to interpret the law, HMRC will show considerable flexibility. When it is a cut and dried matter of willful law breaking, there is none.

  39. JohnBhoy says:

    James Traynor, who has an ear to the Rangers boardroom door and a taste for succulent lamb, reports in Thursday’s Daily Record that the deal is “still in the balance” and today is the day that could “make or break Rangers”.
    Far from joining the cheerleading for Whyte, he states: “The no-buyer option does not bear thinking about for Rangers fans” and adds that TV reports that Lloyds had cleared the way for Whyte to conclude the deal were “wide of the mark”.
    He admitted that if Whyte walks away: “Rangers will be plunged so deeply into financial trouble they might never fully recover.”
    The reality of the Fakeover, and its consequences, seems to be hitting home . . .

  40. A Roman says:

    Taht’s as maybe JB, however I think it sets it up perfectly for Whyte to ‘save the day’? The uncertainty introduced by Traynor-a man who is yet another of Murrays lapdog in-house scribes-sets it up perfectly for the ‘slam dunk’. paint the wrost-case scemnario, make it look like a disaster waiting to happen and in steps the ‘Whyte knight’ to take the plaudits…. The honeymoon period after such a ‘dramatic ending’ would be considerable……

  41. Really? 🙂
    My only fear was some paper sham transactions to create the appearance of a trade might go ahead and that this might buy time. The record of some of the people involved would indicate that they might not be above such shenanigans. However, the power Lloyds wields over MIH should prevent anything like that.
    However, I stand by my earlier statement. In fact within 2 hours of me questioning the sanity of a deal valuing Rangers FC at £33m, the price price dropped £8m! 😉 Do you think the media team directing this play are among the 12,500 page views yesterday? Even that price is absurd. (If I keep doing this I might get Mr Whyte another discount).

    The actions and behaviours I would expect to in a real takeover are absent here. This is very reminiscent of Operation Fortitude- Patton’s fake invasion force for D-Day. This play book is not new.

  42. It certainly fits the pattern.
    Murray has spared his most loyal accolytes from making complete arses of themselves by leaking previous fakeover yarns through outlets like SKY Sports and STV. He clearly does not care if he burns these bridges or not. (And the halfwits repeating their “scoops” verbatim without checking for sanity with a qualified grown-up don’t seem to be any less receptive on this fifth go around).

    However, long-standing relationships with the likes of Traynor, Speirs, and Keevins are more valuable. Tom English has been the favoured son in the last year for slowly letting the air out of the bubble before it bursts. He would chime in a week after the feverish reporting by lesser hacks asking if his more feable colleagues had perhaps gotten over excited and pushed this story further than was realistic. Heavy hints of his access to Sir David himself would add gravitas to the stories.

    And so these heavy hitters remain quiet or cautious during the frenzy while the kiddies scream frenetically. The pattern is that they will comment sometime next week about some surprising speedbump being encountered.

  43. Takeover says:

    Yes i think your blog has a direct impact on reporting of the deal to takeover Rangers what sane person wouldn’t.

    what is it with celtic fans who blog and a massively over inflated sense of there own importance, paul, phil, the guy from scotzine….

    you guys need a lesson in humility…3 in a row and a new owner for rangers should give you the dose required 🙂

  44. A Roman says:

    If I remember right, Tom English currently has an article in the Scotsman where he ends it by proferring the odds are 55-45 in favour of the takeover happening….. He too, like Traynor, paint the blackets of scenarios or the slimmets of odds to make any rabbit being pulled out of the hat thet bit more dramatic and victory from the jaws of defeat like….

  45. I cannot predict the on field outcomes so clearly, and three in a row looks more likely than not to me.

    My views on each “leak” (why different stories being leaked to different media outlets? ;-)) are all over this blog so there is no point in repeating them here. I am calling ‘fake’ on this process. You think otherwise. We should have a little more insight within a few more days.

  46. PortyBelly says:

    Talking of illegality, Phil, what do you think the legal position of your sources at HMRC would be re leaking confidential details of an ongoing case?

  47. You are making some big assumptions there, Porty.
    Firstly, you seem to think you know my name.
    Next, you think that I have sources at HMRC. (I know of at least 6 organizations with access to the information).
    I think you would be quite surprised at how I have come by my knowledge.
    But best of all, you are assuming that what I am telling you is true! 🙂

  48. BigC says:

    Chatting with a (Rangers supporting) colleague the other day. When the matter of the Rangers tax liability came up he was convinced that nothing would come of it because HMRC lost a similar case against Arsenal.

    Do you know anything about the recent Arsenal case and how it differs from the current case involving Rangers?

  49. Pedro says:

    PortBelly – if you think this guy is Phil, I am sure Phil said he got his info from Martin Bain himself.

    To be honest, I take all the takeover chat, this blog and everything I hear on the web with a pinch of salt. Nothing can be proved until it happens.

    People from both sides seem to get awfully wound up over hear say and opinion.

  50. Boab says:

    If the clubs debt drops by £10m (using a round figure), that would make the business worth £10m more, all else being equal.

    Why then would someone expect to pay £10m less for it.

    If an asset is appreciating in value then surely it’s price goes up and not down.

    I realise that the papers keep talking about Whyte “paying off the debt and giving Murray something for his shares”. However I just don’t see how it works in business terms. Why would MIH sell at the lower price if the business has a higher net value.

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