Whyte gets ever more mysterious

Yesterday, Darrell King published his much “Heralded” interview with Rangers’ owner, Craig Whyte. Strangely devoid of quotes, King appears to be paraphrasing Whyte’s words. Quite what Whyte is afraid of is not clear, but that does not matter much. What did strike me as important is following paragraph:
Contrary to a report elsewhere this week, no form has been signed that would allow season-ticket money to be used as a guarantee against any future loans; indeed, the form lodged at Companies House by RFCG last month does the opposite: it prevents season-ticket money from being used for that purpose.

(Darrell: if you are reading this, you made a mistake.  The MG05s was actually filed by The Rangers Football Club plc, the football club, and not its parent company, The Rangers FC Group Ltd). Readers of this blog will recall the MG05s filed by Rangers at Companies House on the 26th of May.  This document created no small measure of debate and confusion.  Taken literally, this document said that all of Rangers assets had been released from the protection of the floating-charge except the “Released Assets”.  The “Released Assets” were defined as the proceeds from 100,339 season ticket sales over the next four years (averaging 25,000 per season).  The bizarre wording of the document struck readers of this blog at the time and we debated this subject at length: what did it mean?  Everything is released from the charge except the Released Assets?  It sounds illogical.

Of course, it is not illogical in law if you provide a definition of “Released Assets”.  Everything is released except (whatever we say is not released, even if we call the items not to be released “Released Assets”!)  It starts to make sense if you think about it.  However, this interpretation seemed a bit contorted.  Why would Whyte release all of Rangers’ assets except a very specific number of tickets from the protection of the floating charge?

A recap on floating charges and insolvency law:
When a bank (or other lender) provides a loan to a business, it will secure its own interests by attaching either a fixed-charge or a floating-charge on the assets of the business.  In a fixed-charge, specific assets are named and the bank could just take possession of these assets in the event of a failure to repay the loan or interest on schedule.  With a floating-charge, assets covered by the “charge” would be sold until it has been repaid in full.  In Scotland, holders of floating-charges that pre-date 15th September 2003, have some additional rights in insolvency of great relevance to Rangers and the tax case.  Holders of such floating-charges are able to call for the appointment of a Receiver, responsible only to themselves who can sell off the secured assets to a new company.  Rangers’ debt to Lloyds Banking Group  (Bank of Scotland) was secured by a floating charge dating back to 1999, and therefore covered by the old receivership laws. 

By purchasing this debt from Lloyds, all of the contractual privileges survive.  Whyte had the option of simply telling HMRC where to go if Rangers lost the tax case and buying all of Rangers’ assets worth keeping.  This would be a really clever use of law.  (I will leave others to pontificate over the ethics and morality of such actions, but I was impressed by the ‘checkmate’ nature of the manouvre).

The apparent release of all of the assets (except the proceeds from 100,339 season ticket sales) made no sense.  So, we speculated that what in fact was intended was the opposite: that the MG05s was just a mangled document that would be corrected.  That all of the assets remained protected by the floating-charge and that the tickets had been released from the floating charge for some other reason- presumably to finance a loan?  That the same Bristol-based firm that filed previous MG05s for Ticketus had prepared this document for Rangers does seem to add weight to this argument.  (The Daily Record seems to have read this blog and decided that this was in fact the case.  At least they did for a couple of hours until Whyte’s PR goons had the article pulled).

However, if Darrell King’s article accurately portrays Whyte’s words and understanding of the MG05s filing, he appears to have given up his greatest defence in the event of losing the tax case.  So the mysteries surrounding Mr. Whyte continue.

Scenarios that could explain this situation:

A) Screw-up:  Has a lawyer simply made a “balls-up”?  It does happen more than many would believe.  Are Rangers assets no longer protected from the tax man?

B) More deception:  The absence of quotes from King’s article on Saturday could be significant: to make the article deniable later?

C) Other:  I will be interested to hear other hypotheses for this strange set of facts.

Mr. Whyte’s thoughts on this blog:

In his interview with Scotland on Sunday published today, Whyte is asked about this blog:

“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”

Care to comment on the 1% truth Mr. Whyte?  If 99% is so “crap”, it should be easy to pick examples?

Then there was this quote: “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.”  
Dear oh dear, Mr. Whyte!  You have a mountain of correspondence on your desk that tells you that this is not true.  The First Tier Tribunal (Rangers’ appeal against tax assessments received months earlier) started in October 2010.  It adjourned after two weeks.  It restarted in April 2011 and after three more weeks, it still could not be concluded.  So, Rangers outstanding tax issues have been scheduled for November 2011.

Perhaps Mr. Whyte could do better by the supporters of his club by making full disclosures that actually make sense.  Nothing would remove the cloud of suspicion and innuendo from his period as Rangers’ owner faster than coherent statements that tell us how he will deal with an adverse outcome from the tax case.  I would think that anyone who can say so much but avoid making any sensible comment on the single biggest threat affecting his club is the one who is uttering “99 per cent crap”. 

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.

731 Responses to Whyte gets ever more mysterious

  1. JPaul says:

    Lloyds are not almost totally government/publicly owned. They are 42% publicly owned. Neither have they been complicit in doing the Government out of anything if they have simply sold a debt. What Craig Whyte then chooses to do is not their business. How HMRC react to what he does is theirs.

    For accuracy the Government Departments weren’t secured creditors, they had preferential status. Meaning they were the same as employees and so forth. They choose to give that status up. The point was they came before secured creditors. So they would have gotten their money even before the secured creditors.

    AR is still possible, by whoever holds the security. In my opinion that is Wavetower, because when the debt was assigned to them the security would have been as well.

  2. Lennon says:

    I still don’t think they sold the debt
    Or to be more accurate I don’t think it has been settled yet
    I would wager this years season ticket money is set aside to pay off lloyds should RFC win the tax case
    If they don’t win the tax case it would not surprise me at all if the deal with lloyds had a clause inserted that gives the rights to the debt back to lloyds – essentially CW is gambling £1 and lloyds want to be at arms length in administration for fear of angry bears smashing up local branches
    Of course this is purely hyperbole
    We NEED more information – details of the deal involving lloyds debt or the true intentions of the MG05 would be ideal
    One thing is for sure – there is no warchest and likely never will be proven by the low key signings that RFC have tried and failed to attract

  3. DavyLaw says:

    Ach, fed up with all this humdrum shoite. Come back soon, RTC, and give us the gen!!!

  4. manila says:

    Re McGregor, Whittaker and Davis’ contracts, if/when they are signed. If RFC goes titties to the moon, what’s their entitlement as employees, contract/remuneration-wise? And how will this impact, the generally conjectured, Mr. Whyte endgame of martinis in Monaco and a fat bank account?

  5. Billy says:

    If Rangers went bust due to the tax case then these players could sign on again for the newly formed outfit or take their chances elsewhere ?

    Not a bad option paying the players a little extra if there’s a chance of the club going bust and any transfer fees for the above players would have been lost to the taxman/lloyds/liberty.

  6. Ray Charles says:

    Signing McGregor up to a six-year deal for an extra £10,000 a week makes a lot of sense.

    He is Rangers’ best player.

    What I don’t understand is why Whyte has sanctioned the deal if he plans to make a sharp exit.

    McGregor still had two years left on his contract. There is no immediate need to bump up his pay if Whyte is only going to be around for a year or so at best.

    It would actually have been a good time to sell McGregor as, with two years left on his deal, Rangers could have demanded a large fee.

    The fact McGregor now has a another four years on his deal will not significantly increase his transfer fee at this moment in time or for several months hence.

    If Whyte was intent on cutting and running then it would surely have made financial sense to sell McGregor now for four or five million.

    Much of that money could have been quickly weaseled out of Rangers by any respectable asset stripper.

    It strikes me that Whyte’s latest maneuvers suggest he intends to hang around longer than I initially thought.

    If Whyte did intend to scarper within a year or so he could have used the £10,000 a week wage rise for McGregor to sign another player while holding McGregor to his contract.

    Better still, he could have sold him for £5million, trousered £1m through director bonuses etc, and still have had £4m plus £26,000 a year in wages to play with.

    Neil Alexander could have stepped up to the plate while the revenue generated would have funded three or four decent players to bump up the squad.

    Even the Rangers fans would have seen the business sense in such a scenario.

    Not a hard sell to the punters, I would have thought.

    And yet Whyte instead chooses to keep McGregor on a bumper salary that will cost the club he owns an extra £500,000 this year and every year until 2016.

    Then there is Whittaker. A year left on his deal and Bursaspor offering cash.

    What does Whyte do? Gives him a five-year-deal and £25,000 a week!!!!

    This is actually Murray-esque – when Murray was in his prime and throwing other people’s money at Rangers.

    If Whyte is an asset stripper then he must be the worst asset stripper ever given the recent contract negotiations we have been told about.

  7. cp1888 says:

    Was McGregor not in Webster Ruling territory?
    Also, were Rangers the club as we know it to go to the wall and new Rangers to spring up, the current contracts wouldn’t be valid anyway.
    I’d suggest it makes little difference what sort of deal Whyte puts on the table. The contracts will only be as long as Rangers continue to exist in their current form. If they win the tax case then money probably won’t be as much of an issue.

  8. timtim says:

    The MacGregor /Whittaker deals placate the faithfull and get a lot of doubters of his back
    but in reality has the wage bill actually risen due to this ?
    or has the money paid to Diouff Weiss Bartley etc just been reallocated
    Will these new contracts come out of the £5m annual warchest
    How much did they pay for the 29yr old Almeria midfielder ?
    will he have a resale value ? Did the transfer deal come as a lump sum or
    as an installment deal ?
    If liquidation occcurs before the end of the season Whyte will have lost very little if anything
    he also has the option to sell them in January should the vultures be circling for more than
    he could at the moment .
    more smoke and mirrors methinks

  9. A bad day for the laptop loyal says:

    Some good questions timtim.

    I cant help but think that RTC may have made a mistake by responding directly at Whyte in his latest post and has perhaps been silenced somehow (although admitedly, he seems far too shrewd to be caught out). I hope to be proved wrong very soon. I’m itching to read a new post!

  10. Tschichold says:

    Maybe RTC is sunning himself on a beach somewhere courtesy of Hay Mckerron?

  11. Tschichold says:

    ps – tongue firmly in cheek with that reply…

  12. timtim says:


    Rangers Still Up For Sale
    Rangers Football Club plc is still up for sale. It was reported that a £33 million takeover bid by Andrew Ellis, owner of RFC Holdings (Guernsey) Limited is still on the table. When Ellis, failed to buy Rangers in June, Rangers’ owner Sir David Murray said it was no longer for sale. The offer from RFC Holdings is still registered as being ‘live’. The development comes only days after it was reported that controversial Russian Businessman, Vladimir Antonov was backing a renewed £75 million bid from Ellis. A spokesman for the panel confirmed the 108 million shares are still listed as being on offer. The spokesman said, “To withdraw a company or retract an offer, the parties involved would be required to notify the Takeover Panel. We have not had that.”

    was the Ellis bid ever retracted
    or was it just given a Whytewash

    I love watching the reaction on FF to the unfolding events
    Whytes was being seriously doubted as to his credentials
    during the past week but the MacGregor /Whittaker deals
    are being played out as a major coup, like 2 new signings almost
    the players get to gain the most if liquidation occurs
    a nice wee wage rise for 6 months then a free agent
    able to command the best personal terms with the ability to
    move outwith the transfer window

    I am not clear on whether those players in contract (should
    the case go against them) can be sold as assets to satisfy the creditors
    can anyone confirm

  13. JPaul says:

    I believe that if a club is liquidated the players registrations revert to the governing body. In administration it would be up to the administrator to do whatever he could to maximise income. However just selling the registration is not enough. the player must also agree a new contract with the selling club or it is pointless.

    That’s from memory and I’m not sure if it’s right.

  14. Goosy says:

    JPaul says:

    05/07/2011 at 3:45 pm

    I believe that if a club is liquidated the players registrations revert to the governing body. In administration it would be up to the administrator to do whatever he could to maximise income. However just selling the registration is not enough. the player must also agree a new contract with the selling club or it is pointless.

    That’s from memory and I’m not sure if it’s right.
    Interesting if true as it suggests the process could be very messy if CW loses control over events by not appointing an Administror Receiver to act in his interest
    If he goes for the PR benefits of letting the big bad HMRC apply to liquidate RFC
    Then would it be the case
    ( to the legal guys out there)


    The Administrator/Liquidator would need to be satisfied that a CW lump sum bid for fixed assets plus players was greater than the sum of the parts
    If the answer to this question was no or dont know then all CW could surely do is wait for a fire sale to to take place or negotiate offsetting his debt against those assets whose value would not be disputed by the unsecured creditors
    In a fire sale the phoenix RFC2011 would have to bid capital sums for individual players just like any other bidder This offer would presumably also have to be the best available

    To be satisified that a CW lump sum bid was indeed better than the sum of the parts each players transfer value would have to be itemised and agreed by the Administrator/Liquidator as representing what is legally defined as “fair value” And if a club had recently offered to buy a player for £Xm and their bid was rejected by the old RFC this could reprent the starting point for valuing his worth

    To get RFC2011 off the ground smoothly in mid season a lot of work would need to be done speedily by people whom CW definitely doesnt control
    The SPL and SFA would have to call emergency mtgs to rush through any approvals needed
    …Creditors would have to waive any rights to challenge a the lump sum bid for players plus fixed assets
    …Sky TV would need to cooperate fully
    – The Administrator would have to work to urgent timetable needed by RFC201i and the football authorites
    –All the other creditors including HMRC would have to accept the timetable

  15. JPaul says:

    If the company is liquidated and the players registrations revert to the controlling body then they would no longer be an asset. As such it’s a moot point.

    However, if HMRC move to wind up then Rangers can do the same as every other club does and put themselves into administration. It is then up to the administrator to get the best deal and try to keep the business running. Even with that being the case a player does not have to sign any contract with another club. That would be down to them.

    Football players are human beings, they have more rights than any business, administrator, liquidator or Government Department. People can buy and sell their registration to play football in a particular league. They cannot buy and sell the player. As Terry Hendry (I think) said, that would be slavery.

    This notion that a new Rangers can just start up from the old is nonsense. Yes, they can buy all of the other assets. However they cannot just keep the same squad. In liquidation that would be up to the player.

  16. Ray Charles says:


    I don’t think a Webster was a likely scenario with McGregor for various reasons.

    McGregor was on £16,000 a week and had two years left of his contract.

    Why increase his pay by £10,000 a week if you are only planning to be around for the short term?

    An asset stripper would surely either sell him to generate cash or leave him on £16,000 a week and tell the fans you will deal with it next summer when McGregor’s deal begins to run down.

    It does not strike me as the actions of a short-term asset stripper.

    I have not heard a cohesive argument that could explain this move by Whyte if he simply plans to take Rangers into administration when the club lose the tax appeal.

    I can’t square the circle if you know what I mean

  17. AllWhyteOnTheNight says:

    Long time reader but first time poster.

    The long term contracts is being seen by most people as being a sign of confidence in Whyte. I see it as just another piece in the jigsaw of RFC going into Administration.

    When Rangers go into Administration (it will be Administration rather than Admin Receivership for various reasons to do with contracts etc) the exit will be either selling all the assets to a newco and the existing RFC Ltd being liquidated/dissolved or exit by way of a CVA. (This is how all football clubs come out of Admin).

    For a CVA to be accepted it has to be approved by 75% in value of the creditors of the company. Now if HMRC are £50m then you need to have >£150m of other creditors who are going to vote for your CVA. (As a matter of policy HMRC will not approve a CVA where a class of creditor is given a preference to them not normally conferred through insolvency legislation. Football has this system of requiring clubs to pay all football creditors in full to retain their league licence. If you propose to pay football creditors in full and not HMRC they will vote against it). Most recent example of this is Plymouth who have to pay £3.75m of football creditors in full.

    So why hand out long contracts….because in the recent Dundee FC administration, the administrator used the remaining balance outstanding on players contracts as a creditor amount to vote for the CVA. (Dundees Admin proposals are available to view on line as are details of what claims were accepted etec for voting).

    So on Administration McGregor & Whittaker become creditors for voting purposes at c£14m.

    He has still got a bit to go to build up the total required but we will wait and see.

    The risk in this strategy is dilluted by signing up long term contracts for players that are either in your plans to be core players or have a market value (even if that market value is just someone willing to take on their current contract).

    5 year contract for Davie Weir anyone?

  18. Gerry says:

    Ray charles:
    As I read the situation, the signings of current players (and publicity surrounding them) is all to nullify the doubters including those that have bought their season tickets.
    The red tops have been cheerleading and ‘interviewing the backroom boys’ for the last few weeks due to lack of new signings.
    As soon as a new player arrives the redtops will run an exclusive – we told you first, week long love in with the player, then Hately, then ex players etc….it’ll be back to cheerleading from them again.

  19. Paulmac says:

    The new deals for McGregor and Whittaker are a promise to pay, they haven’t actually been paid anything yet.

    So far it’s a zero spend. The increase in salary simply increases their value should a sale of the player take place.

    The new signing, for how much we don’t know, again had to be done.

  20. The Black Knight says:


  21. RTC ? have you done a bunk ? we need more facts to work with PLEEEEAAAASSSSEEEEE:)

  22. JPaul says:

    Maybe nothing new has happened so the bloke doesn’t have anything new to blog.

  23. TheBlackKnight says:

    Perhaps the Whyte Knight could comment, as I understand he reads this blog, on the fall in capital share value since buying the company.

    Since the takeover the value of RFC has dropped by £9m. Strange, given that the club is almost entirely owned by CW.

  24. Adam says:

    Tbk, of course the value has dropped. Prior to the takeover the market cap was based ona share price of 32p. Whyte has just bought a million of them for a penny.

    The market cap of a football club means the sum total of hee haw.

  25. The Black Knight says:

    Adam, just to clarify, what you are saying is that the 10p ordinary shares (once valued at 32p) that were bought by CW for the princely sum of one Queen’s head, has had no effect on the share value to investors? The share value (company value) has dropped by almost 1/3.

    So it is only CW shares that have been rendered almost worthless?

  26. JPaul says:

    The market capitalisation is simply the number of shares multiplied by the price they are trading at. So to say it means nothing is a bit misleading.

    Shares are now trading at substantially less than they were before. People used to have to pay about 32p for them, now they are paying about 27p. A drop of around 15%.

    The market capitalisation in and of itself may not tell you very much, but how much the shares are trading at is not meaningless.

    To answer the currently unasked question, about 39p.

  27. adam says:

    No…what i was saying was that it is hardly surprising that the share price and subsequently the market cap value of Rangers has plummeted since Whyte bought the shares for £1.

    Nobody needs to ask him the question. Its really rather obvious is it not ?

  28. JPaul says:

    Why is it not surprising. If anything one would have thought a new owner and fresh investment would have bolstered the share price. People wanting to buy into the new era.

    The fact that the price has dropped would indicate a lack of confidence, either in the new regime or in the result of the tax case. Possibly both.

    Him paying £1 for his share is irrelevant. Everyone knew that was a notional amount anyway.

  29. adam says:

    Not when he owns 90% of the shares though.

    Football shares are volatile and when 96% of the shares are owned by 2 people, the other 4 % are simply traded between people who are simply supporters who buy them just to say “they have them” There must be less than half of a half of a half of percent of people who buy football shares to make a profit. And they are plain daft.

    As an aside, i also dont believe the drop in Celtic shares from 68p to 38p over the last 30 months or so an indication of a lack of confidence in the Board.

  30. TheBlackKnight says:

    I believe empirical data would show a direct link between lack of European football and the fall in share price, however it is worth noting you picked an absolute high. The fall us much less and has stabilised.
    Rangers, in my opinion, could go into freefall, or stabilise should the go, or not go, on a euro run. (same would apply to Celtic)

    It is indeed chilling to contemplate what could have happened had Rangers not won the last 3 (lucrative) seasons.

  31. JPaul says:

    68p to 38p over 30 months is not the same as 32p to 27p in a few weeks. The former is more likely to reflect the larger economy. The latter is more likely to reflect people’s attitude towards the business concerned.

    Isn’t it 91% though. I thought Wavetower had 85% and Dave King 6%.

    Clearly if the prices are dropping then other people are selling their shares and willing to sell them cheaply. That to me is caused by a lack of confidence and people getting out while they can still get some return. Other people are willing to take a gamble as the prices get lower, as it becomes a more attractive proposition.

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