One week to go
10/04/2011 261 Comments
In just over a week, the First Tier Tribunal hearing Rangers’ appeal over the tax assessments in their possession will resume. Of course, you all knew this already. The blanket coverage of this issue in the Scottish media has been overwhelming. Journalists have been hounding Martin Bain and demanding information on ‘what did you know and when did you know it’. The saturation television coverage with experts explaining the intricacies of trust law to a spellbound public has been intense. At least this is how the most important single event in the history of Scottish football should be reported.
It is not an exaggeration to describe the tax tribunal as the most important event in Scottish football history. As Rangers’ Chairman admitted, if the full amount of the bills goes against Rangers, then the football club simply could not pay. No bank would lend them the £36m for underpayment and interest which could crystalise sometime between July and August (holiday schedule permitting). If Rangers lose this tribunal, another one will be scheduled to deal with the penalty for deliberately breaking UK tax law. The penalty is currently £18m but could be finalised anywhere between 50-100% of the original underpayment if HMRC can prove that Rangers knew what they were doing was illegal. (And they can). It could take another year before the penalty is finally determined. This delay in getting all of the numbers creates a complication for any attempt to restructure Rangers’ debts in administration. It makes arriving at a deal to which 75% of the creditors agree very difficult. That Lloyds have a security interest in Rangers assets which will ensure that most of Rangers’ bank debt will repaid before most other bills does not make for an easy restructuring. It is hard to see how total liabilities of £90-96m can be satisfied by any sum that someone would offer for Rangers assets in administration. Liquidation of Rangers FC is not a fanciful notion. It is not by any means a certainty, but anyone saying that it will not not happen does not understand the situation.
So while Rangers enter the final stages of a process that has as a possible outcome its complete liquidation, what are the Scottish media discussing?
Granted the latest kerfuffle about sectarian singing is easier to understand. However, the greatest significance of the sectarian debate is the effect of the singing and the potential reductions in vital European football money would have on a prospective buyer. Yet this angle has not been discussed.
The on-going saga on the “fakeover / takeover” continues to promise ‘another 48 hours” or “the end of next week”. Sources reported to be close to Craig Whyte have been breaking every principle of The Takeover Code’s disclosure requirements. These disclosure provisions are designed to ensure that all shareholders gain information about a takeover at the same time. They are not intended to drop a total secrecy blanket around any takeover. Yet, the Scottish media conveniently protect their friends by claiming that Murray, Whyte, Ellis, King [insert name of other “billionaire”] cannot comment. They can. Whyte and Murray are just chosing to say nothing. Yet, the same journalists think nothing of receiving private information from “sources close to Whyte”.
The last two weeks were an interesting time to revive the takeover tale. Rangers’ reported Interim Results that most expected to be better and that disclosed another tax problem. Murray International Holdings Ltd reported its results for the year ending 30 June 2010, and they showed that the financial disaster surrounding this company continues unabated. Then we have the resumption of the First Tier Tribunal that will determine whether Rangers FC will even exist in a year’s time. It was a very good time for a distraction.
This blog has been clear that it suspects that Craig Whyte is nothing more than a willing participant in an elaborate deception to distract Rangers fans and the Laptop Loyal from these events. Others tell me that Whyte really is trying to line up financing for a deal. Whatever his motivations, the story still has major credibility problems. No one in their right mind would pay anything approaching the amounts quoted for a business that has a £54m tax bill hanging over it. ‘Where is the fire?’ Why does Whyte want to move now? Anyone serious about owning Rangers will simply wait a matter of weeks until the result of the tax case is known. Yet the Scottish media, from the taxpayer-funded BBC Scotland to those whose homes have been built on succulent lamb, continue to toe the party line like they worked for Pravda.
When Rangers fans’ anger eventually explodes and they search for culprits, I hope that they direct their fury in the correct direction: Rangers’ directors over the last ten years and the compliant Scottish media who have repeated lie after lie as news.