Tax Deal “Rumour”: What was the point?


Scotland’s sports journalists have surpassed themselves recently.  Even by their own fathomless standards for getting it wrong, the release of the summary minutes of the Rangers Supporters Assembly (RSA) meeting with Craig Whyte could not have done more illustrate the scale of the credibility problem facing the mainstream sports media in this country.

Mark Guidi’s regular slot on Radio Clyde’s Superscoreboard has given him a platform to embarrass himself repeatedly.  On 27 December, Mr. Guidi told us that there was “a groundswell that the tax case will be sorted out before the case resumes”.  Just this week, he used this pulpit to tell us all that HMRC will be happy to accept a greatly reduced figure (£5-6 million) from Rangers.  According to Guidi, HMRC has only won 5% of similar cases. (This is not only wrong, it does not even make any sense.  Rangers’ case is quite unique in several ways). His colleagues have made many similar misstatements.

When a caller (Terry) informed him that these stories were nonsense (citing this blog as his source), Guidi denied any knowledge of our existence let alone having ever read our content.  However, the caller was correct.  Guidi was talking nonsense.  Of course, there is no need to take my word for it. Who better than Craig Whyte and the RSA to clear up the confusion: “No scope for negotiating a settlement with HMRC due to the criticism they have had from MPs and the Media about some high-profile ‘deals’“. If someone can see fit to forward a link to our site to Guidi, it might be a good place for him to start doing research before he makes things worse.

Guidi and several other Scottish sport journalists have been pumping up the hopes of Rangers fans with these tales of a deal being imminent for several weeks. The question is: why?  We know already that Rangers’ PR firm, Media House (ran by Jack Irvine), have been spreading the optimisic ‘deal about to be done’ story around every newsroom in the country.  That does not answer the question as to why a journalist would believe any PR-rep’s stories about Rangers.  If they told me that Ibrox was in the G51 postcode, I would have to walk there and look- such has been the trail of lies and disinformation since Whyte’s name was first linked with the club. Were they promised upcoming transfer exclusives? Perhaps.  More to the point, why did Media House hype this story only to be contradicted by Whyte himself within a matter of weeks?  I hope that Jack is working cheaply because this looks like it was a complete waste of time and money.  Sources within Ibrox have described the daily operations since the takeover as ‘shambolic’.  It certainly seems that way from the outside.

Mr. Whyte also confirmed HMRC’s powers to demand payment if/when the First Tier Tribunal (FTT) finds against them.  We have made this point several times (including the previous blog entry): should the assessments of tax liability in Rangers’ possession be confirmed, the bill becomes due and payable immediately.  Even if Rangers appeal the findings, HMRC has the right to demand payment without further delay.  (If Rangers won their appeal, they would be entitled to full repayment plus interest, but that is academic as they would have already become insolvent).

If an appeal is seen to be reasonable i.e. where it is obvious that there is some ambiguity in the law or that the employer drifted over the line into illegality rather than raced across it, the taxman will not usually press for payment when doing so would cause insolvency. However, where the appeal is vexatious (i.e. no real chance of winning it- just being done as a heel-dragging exercise), then HMRC would be justified in taking a tougher line.

It may not help their case that Rangers have launched an appeal for the £2.8 million that was taken (most of it forcibly- after a court order) for the Discounted Options Scheme (“The Wee Case”).  After months of correspondence over The Wee Case where the admission of liability was clear, if Rangers’ appeal is viewed as being without a reasonable legal basis, HMRC might take a more dim view of an appeal relating to The Big Case.

Craig Whyte has made clear, in his own words and in the takeover contract documents, that he believes that his position in the event of insolvency is protected through the £18 million debt owed to him by Rangers and the floating charge over the club’s assets.  It is very obvious that Rangers FC have no intention of paying anything close to the full amount of tax, interest, and penalties that have been assessed.  The implicit threat is “we will go under and HMRC will get nothing” .

If this case was only about immediate revenue collection then HMRC should offer Rangers a deal.  However, it would lay down a marker for every business owner, inside and outside of football, that one can engage in a shockingly blatant tax scam and have little to fear.  If Rangers can negotiate a pennies on the pound deal now, it signals to every under-pressure company director that corners can be cut.  Even if rumbled, the worst he or she would have to deal with would be repaying 10-20%- and even that would be a decade later.  Sounds like a pretty tempting deal!  HMRC’s credibility, and a just outcome for this case, require that life is not made easy for those whose plans rely upon ducking their social and financial responsibilities.

This blog has been accused of wishing malice on Rangers FC.  This is not true.  I am not one who seeks the extinction of Rangers in the style of Third Lanark.  What I seek is a fair outcome- nothing more and nothing less. ‘Fair’ in this case would be any resolution that sees Rangers carry a millstone of sufficient weight, and for an appropriate duration, that counter-balances the benefits accrued from their use of the EBT scam.  Since its implementation in 2000, Rangers have won the Scottish Premier League five times.  The present day value of the £24 million in tax that was saved along the way is about £36 million. Without the benefit of this £36 million, Rangers’ would have have gone bankrupt years ago or would have been forced into draconian budget cuts. They got to stay at the roulette table eleven years after their own money had ran out.  Only the most blind or willfully ignorant could fail to see the issue of financial doping in tainting the Scottish championship during this time.  If Rangers succeed in ducking any meaningful financial restitution by exploiting kinks in bankruptcy law, then it will fall to the Scottish footballing authorities (SFA/SPL) to ensure that justice is done.  A 10-point penalty will be automatic if an insolvency process overlaps with any active football season, but a “newco” club must not be given a free entry into the Scottish Premier League to take the place of Rangers.  Scottish football administrators must find the balance between penalising Rangers so heavily that a new club carrying Rangers’ legacy never gets off the ground versus incurring the problems of ‘moral hazard’ by failing to extract a punishment.  If football becomes like the banking industry, where wrong-doing and excessive risk taking carries no penalty, we will just continue to get more of it.

The task of finding the right balance will not be easy, but I would suggest that a formula based on Rangers (2012) FC starting each new season for a number of years with a points deficit would be along the right lines.

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.

3,553 Responses to Tax Deal “Rumour”: What was the point?

  1. Mike says:

    sannabhoy says:
    09/01/2012 at 4:27 pm
    Torquemada ,

    i think this is what you had in mind earlier ,

    http://www.miketheheadlesschicken.org/story.php

    Interesting to note , Mike survived for 18 months after the supposed death blow – remind you of anyone ?

    That’s good to know. How long have I got left?

  2. sannabhoy says:

    Mike says:
    10/01/2012 at 12:23 am
    sannabhoy says:
    09/01/2012 at 4:27 pm
    Torquemada ,

    i think this is what you had in mind earlier ,

    http://www.miketheheadlesschicken.org/story.php

    Interesting to note , Mike survived for 18 months after the supposed death blow – remind you of anyone ?

    That’s good to know. How long have I got left?
    ———–
    think the death blow was about 12 months ago- i reckon July

  3. JJ says:

    “After the announcement to the stock exchange on Monday, the club announced that it is currently considering removing its listing with Plus after May 6, one year to the date that Craig Whyte took over at Ibrox.

    Chairman Mr Whyte said: “Given the structure of the shareholding in the club, there is very little, if any, tangible benefit for the club to be a listed company.”

    Just like at school. The old face saving excuse which fooled no one. You know, when the geek said “She never chucked me, I chucked her. Anyway, she was ugly”.

    I’m sure Craigie boy had plenty of practice of getting chucked

  4. paulmac says:

    the taxman cometh says:
    09/01/2012 at 7:06 pm

    radio clyde have reported that the plus market suspension would not stop individuals selling their shares is this true?
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

    Not sure if it has already been answered bus yes…the Company are obliged to purchase the shares at the suspended value if the other shareholders wish to sell.

  5. Scotjock says:

    Long long time lurker, until now I have had nothing worth contributing however I do know that rangers fans paying for season books via direct debit would have some recourse via the direct debit indemnity process which would cover any losses under the provisions of the direct debit services not provided would guarantee a full refund. Due to this the only one that are in trouble would be those paying either fully up front or those paying by what is known as a card mandate.

  6. paulmac says:

    JJ says:
    10/01/2012 at 12:29 am

    “After the announcement to the stock exchange on Monday, the club announced that it is currently considering removing its listing with Plus after May 6, one year to the date that Craig Whyte took over at Ibrox.

    Chairman Mr Whyte said: “Given the structure of the shareholding in the club, there is very little, if any, tangible benefit for the club to be a listed company.”…….

    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

    That’s right Craig….except for the important fact you remove the option to float a share issue…

  7. sorrynocando says:

    TheBlackKnight says:
    09/01/2012 at 11:05 pm

    ——————————————–

    To clarify that, Whyte can reach 90+% without King but he cannot reach 95% without King, meaning King can go to court of his own volition.

    It will however become academic when the plug is pulled.

  8. Ray Charles says:

    I posted the other night that rationality and Craig Whyte are no longer bedfellows.

    It is important to consider the possibility that Whyte has personality issues.

    As I pondered previously, hubris may well be his undoing.

    There are ways out for him that will be profitable but I doubt he will take them.

    I suspect he will in his Ibrox bunker to the bitter end – still convinced he is the man to see Rangers through choppy waters.

    RTC raised the possibility of other Rangers fans staring a NewCo at Hampden in order to gazzump Whyte.

    I really think such a scenario is possible.

    In my opinion, Whyte will not give up his hold on Rangers until reality hits him like a hammer.

  9. Torquemada says:

    Auldheid says:

    09/01/2012 at 7:07 pm

    Torquemada says:

    09/01/2012 at 3:36 pm

    RTC (and others, especially Auldheid)

    Surely this, on top of everything else, must put a questionmark against a Euro licence, presuming they stagger on to that point?
    ————————————————
    I do’nt think it makes any difference as long as audited accounts are provided by 8th April to the SFA
    _______________________________________________________

    Aw shucks! I was half hoping that a shares suspension could be construed as an ‘insolvency event’ under the rules.

    No big deal. Tick! Tock!

  10. StevieBC says:

    A typical post on FF site;

    (Sic)
    “Re: How long to recover from administration?
    While I dont believe it is inevitable, if it does happen, then European competition will be denied us for at least a season, possibly up to three.
    In theory, we could be kicked out the SPL, but that won’t happen. The negotiation to ensure we stay, though, may mean penalties for more than one year.
    At the end of the day, that,s worst case and as I say, I don’t think any of this will happen. Craig Whyte hads aces up his sleeve. He is very wealthy, but won’t show he hand until he needs to.”
    –——————————–
    If they still think that the MBB has money, then they are going to be very surprised – and then very angry.
    When do we buy the popcorn?!

  11. StevieBC says:

    Is Traynor going ‘off message’ before he departs the DR ?

    “…Sandaza isn’t great but he is available and he is cheap. And that’s precisely why he’s just about perfect for Rangers. Unless McCoist has been told to take a look at some of those Auchinleck boys.

    Don’t laugh. There are one or two inside Ibrox who might be thinking that’s a good idea.”

    http://blogs.dailyrecord.co.uk/jimtraynor/2012/01/i-bot-into-the-dream.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheDailyRecord%2FJimTraynor+%28The+Daily+Record+-+Jim+Traynor%29

  12. DannyFishchargeEsq says:

    StevieBCsays:
    10/01/2012 at 2:44 am

    When do we buy the popcorn?!

    Now , it avoids the rush 😉

  13. DannyFishchargeEsq says:

    JJsays:
    10/01/2012 at 12:29 am

    I’m sure Craigie boy had plenty of practice of getting chucked

    Aye , against a roughcast gable end by the looks of it 🙂

  14. Bawsman says:

    Question please: What will be happening between now and the 31st of January that will allow Rangers to sign off their accounts?

  15. Hugh McEwan says:

    The good people of follow follow still seems to see administration as some sort of endgame, and indeed maybe even a panacea. They seem to forgrt that going into administration is reasonably straightforward, it is how one gets back it which is the real trick.

    Now i know the general consensus here, not by everyone but by a fair few (me included0 is that receivership is a distinct possibility. If that happens the chances of there being much left of Rangers are fairly slim. Howevever even if it is administration then there must surely be serious doubts that about whether or not Rangers can survive it, if there is a substantial tax bill. Bearing in mind that the tax at this tribunal will include interest but not penalties. In the event of an administration HMRC will lodge a cliam for the penalties in addition to the established tax and interest.

    In short, and againdepending on how the tribunal rules, this really could be an all or nothing situation. It is distinclty possible that there will be a, a receivership which strips everything out of the club b, an administration which Rangers have no prospect of recovering from or c, a pre-pack administration, which is winding up by another name.

    A reasonable number on follow follow are now realising that administration is more than a possibility. Maybe it’s time they started listening to Craig Whyte when he tells them that even surviving that is far from a certainty.

  16. Hugh McEwan says:

    Bawsman says:
    10/01/2012 at 7:00 am
    Question please: What will be happening between now and the 31st of January that will allow Rangers to sign off their accounts?

    =============================

    The only things I can think of are selling players, enough to satisfy an auditor. Or securing a line of credit which the auditor will accept as securing the short term future and obviating their concerns with regard being a going concern.

    This is assuming that the problems relate to the businesses viability as a going concern.

  17. Hugh McEwan says:
    10/01/2012 at 7:09 am (Edit)
    _______________________
    The good people of FF have a lot of ground to make up in their understanding of the reality they face. There are a couple of guys on there who seem to understand, but the vast majority still seem to be clinging to childlike fantasies of rescue from some rich man or that their problems will just evaporate.

    So expecting them to grasp the subtleties of receivership v administration is just too much. (Can I be more condescending?) It is true though. While still wrestling with the idea that Rangers are in serious trouble, they have not had time to listed or read up on the facts.

    They will get there sooner later.

  18. The Whisperer says:

    Off topic .. I see Doncaster have loaned out a player …. “Mustapha Dumbuya” …. I bet that was a thought SDM had several times !

  19. Hugh McEwan says:

    Whilst I am up at this unGodly hour, and posting nonsense, it is my belief that the problem Grant Thornton have with the accounts is not limited to a potential large tax bill. More basically than that Craig Whyte, the owner and chairman has warned shareholders and fan groups, indeed he has been in the newspapers, stating that there is a large deficit in the accounts for this year.

    That has been reported as being £10m, which is a reasonable amount of money in this context. If you look at rangers actual turnowever it seems to me it is a huge number. So we have to go back to the question, where is that going to come from. If Rangers answer to Grant Thornton is that they hope to make up that difference through net profit on player trading in January, allied to net savings in salary for the rest of the fionancial year then I would not be surprised if GT are “sceptical” about that as a plan (or scheme). They are much more likely to be intersted in guaranteed loans, or facilities available to Rangers.

    Add this to Rangers admission that they have been working on an unsustainable business model and have to cut wages by about a third and it is not surprising that GT are not happy to confirm that rangers will see out the season. With or without a further tax bill. Craig Whyte has all but told them he cannot guarantee it himself.

    I think some people get a bit confused with football clubs and assume that if there is a shortfall in the trading position that debt wills imply rise. That is the case if there is an overdraft in place to cover it. However if there is not, then it simply means that credit has to be sought elsewhere or bills won’t be paid. See Hearts for what happens then.

  20. quickdraw says:

    Bawsman @ 7am

    What will be happening between now and the end January?

    The tax case!!!! Given this announcement and the volte face by selected journalists I think they’re preparing for the end. I think this is Whyte’s excuse to go before the final result of the tax case. He’ll say the tax case advice has changed and he has to act nowto save Rangers. This could finally be the end.

  21. Bhoymonty says:

    Scotjock on 10/01/2012 at 12:46 am said:
    Long long time lurker, until now I have had nothing worth contributing however I do know that rangers fans paying for season books via direct debit would have some recourse via the direct debit indemnity process which would cover any losses under the provisions of the direct debit services not provided would guarantee a full refund. Due to this the only one that are in trouble would be those paying either fully up front or those paying by what is known as a card mandate.
    —————————————————
    Thanks for this post. Was talking about this yesterday as I thought there was something in it. Do you know who would be liable for the cost wee there to be payment and no end product?

  22. Paranoid Timdroid says:

    There really is a delicious irony in the thought that Rangers fans hatred of Celtic, and their refusal to listen to and believe Celtic fans on this issue as a result, could have cost them any reasonable chance of actually helping prevent what looks entirely innevitable.

  23. Scotjock says:

    “Thanks for this post. Was talking about this yesterday as I thought there was something in it. Do you know who would be liable for the cost wee there to be payment and no end product?”

    Ultimately your bank would pick up the tab, with an indemnity you get the money back instantly the bank then takes steps to recover these funds.

  24. Brogan Rogan Trevino and Hogan says:

    Good Morning,

    Can I just try and clarify a couple of things, although some if not all of this will already be known to most on here.

    First, I agree with Barca that the admission of a “New” member to the SPL other than by way of the normal promotion and relegation proceedure is a reserved matter and therefore is simply NOT a matter for the board of the SPL.

    The articles of association make it clear that a special qualified resolution is required for:

    (e) any expansion of the League by the addition or admission of new members (other than as a result of the operation of the Rules governing promotion/relegation between the League and the SFL);
    (f) any reduction in the number of members of the League (other than as a result of a member ceasing to be a member of the League in accordance with the Rules and/or these Articles);
    (g) the allotment and issue of a Share;

    A special qualified resolution requires the vote of 83% of the members.

    But let’s not rest there because I think the matter is more complex than that.

    I believe that some at Celtic Park thought that the reason for the “Board” of the SPL having the matter within their grasp is because the provision of the articles dictate that the “Board” has the right to order/determine/ demand the transfer of the share held by any club in the SPL company, AND because any club which goes out of business must transfer the share that they hold.

    Article 11 says as follows:

    Except where such transfer is occasioned by the promotion of an association football club from and relegation of a Club to the SFL the consent of the Board shall be required before the transfer of any Share shall be registered.

    So, on the basis of this provision, the transfer of the share– effectively determining who is a member of SPL ltd and who holds the shares in that company– IS a matter for the board.

    However, that provision simply does not entitle the board to determine who is in or out of the league at all. It merely confers on the board the legal power to demand and where necessary implement the transfer of the appropriate shares to the legal entities that own and operate the clubs that are deemed BY THE COMPANY to be members of the company and therefore the league!

    Here is article 14 which makes this clear:

    14. If:-
    (i) a Member shall cease to be entitled to hold a Share; or
    (ii) a trustee in sequestration, manager, receiver or administrative receiver shall be appointed in respect of a Member or any property of a Member, or an administration order shall be made in respect of a Member or any property of a Member or an order shall be made or an effective resolution passed for the winding up of a Member otherwise than for the purpose of reconstruction or amalgamation;

    then that Member or its manager, receiver, administrative receiver, administrator or liquidator or any other person entitled to the Share shall, on receiving notice in writing from the Board following the Company in General Meeting passing a Qualified Resolution that such notice should be issued by the Board and confirming the identity of the proposed transferee, transfer its Share to such other person as the Board shall direct at the price of £1 and the Club owned and operated by such Member shall forthwith cease to be a member of the League and the Club owned and operated by the transferee shall become a member of the League in its place.

    So, from that you would conclude that I am of the view that the board do not have the power to say who is in or out of the league, and that any application by Rangers New Co would have to be approved by a vote of 83% by way of a special qualified resolution!

    Well, sorry but I think it is yet more complicated because the articles of association do not exactly say that at all.

    Look at the provisions surrounding the special qualified resolutions again.

    Rules (e) to (g) quoted above specifically and clearly talk about the EXPANSION of the league other than by relegation and promotion.

    That word was inserted there quite deliberately and so therefore must mean something.

    In this instance, unless I am very much mistaken, we are not talking about the EXPANSION of the league AT ALL!

    What we are talking about, is one member club becoming completely defunct. It has ceased to be. It does not and cannot complete the fixtures envisaged by this league set up.

    So imagine that happens. Imagine there is no application at all by a Phoenix club. How then does the SPL determine who will be in the league the following year?

    You had 12 clubs, you now have 11 and one of those should be relegated and its place taken by the club sitting at the top of the lower league.

    However, if the club which won the Scottish Football League does not meet the membership criteria, then, AND ONLY THEN, does the club which would have been relegated get to keep its place!

    This is governed by the SPL rules:

    Here is rule A2.3

    A2.3 In the event that the Candidate Club for any Season, if promoted from the SFL and admitted entry to the League, would, in the opinion of the Board in its absolute discretion, fail to fully comply with the Membership Criteria and no waiver, relaxation or period of grace is or has been granted to the Candidate Club in terms of Rule A2.7, then the Candidate Club shall not be promoted from the SFL and admitted entry to the League and the Club which would otherwise have been relegated from the League to the SFL in accordance with Rule A2.1, shall retain its place in the League

    But we don’t have that here do we?

    The club at the very bottom of the league would still be at the bottom and so should be relegated.

    I presume that the club winning the SFL would comply with the membership criteria and so should be promoted.

    That still leaves us with 11 clubs.

    There is only one way to resolve this situation and that is to either allow the bottom club to remain OR to promote two clubs from the SFL.

    Neither is action constituting the league by the normal promotion and relegation is it?

    AND it is not the EXPANSION of the league, but the maintenance of the league of twelve allowed for in the articles by one of two different steps, both of which seem perfectly logical and arguable.

    So let’s throw a third possibility in and that is an application from a legal entity which has no track record in football at all. A Limited company which has no history in football and has never played a game in the Highland league, the Junior League, Under 19 League and which is not a member of the SFA etc.

    Does this application strike you as more likely to be EXPANSION of the league by means other than promotion or relegation? Or is it a step which is just not envisaged by the articles at all?

    I would argue that a Phoenix application is such an unusual situation that it would require a complete article change, because as we have seen above there are means– perfectly logical means– by which the size and status of the SPL can be maintained which involve no more than an extension of the rules of relegation and promotion.

    We are not talking about EXPANDING the league at all here, we are talking about inviting someone to become a member of the league– the same size of league– but by means other than normal promotion and relegation.

    And the rules just simply do not allow for that at all. The Articles do not envisage it– and they certainly do not envisage a mechanism whereby a Phoenix company can take the place of a team that has already played and worked under the structure of the SPL and the league below from which it is obliged to accept members provided that they qualify and meet the membership criteria.

    A Phoenix Company can never qualify for the SPL because it will never have played a game in any league whatsoever.

    Accordingly, the only true safe legal basis that the SPL can admit an application from a previously unregistered football club with no history at all in terms of its own articles is if the SPL does so by way of a qualified resolution to alter its articles of association to specifically allow such a situation.

    A qualified resolution would require a vote of not 83% but 90%.

    However, even then I can forsee a challenge potentially from SFL members because remember that the SFL and the SPL are contractually related. Many in the lower league will be less than happy with such gerrymandering and will complain that they are not being treated in the same way as one of the big two.

    Think Dundee– Livingstone etc.

    Whats more, the first two teams in the SPL “win” something like £3.5M and £3M respectively while the team that is 3rd sees the money drop to something like £1.5M. What do you do here if you are Motherwell or any other team who under a league with no Rangers stands a good chance of rising to second spot or even third spot if that was previously outwith your grasp.

    Also, don’t rule out any teams decision being influenced by their bankers. Lloyds have apparently received their money from Rangers. The remaining teams cumulatively owe the same banking group more than they were owed by Rangers. If the bank see each teams revenue (and therefore their ability to repay the bank ) increased at the expense of a company which does not bank with the same group– do you think the bank will bring a little pressure to bear?

    There are very good financial reasons why the other clubs in the league are absolutely financially better off without Rangers in the SPL. Some of the attendances at other SPL clubs will increase in a league without Rangers especially where there is an enhanced chance of European Football and the resulting revenue.

    Hibs attendances increased when they were relegated and were winning in a lower league.

    Further if you take the Thompsons at Dundee United– they had to stick in their own money to keep Dundee United afloat and improve the team whilst that club was under threat from Bank of Scotland. Do you see them voting to allow some form of Rangers to escape debt with no punishment or disadvantage in terms of league status, while they struggled and made sacrifices to ensure that they complied with the rules and did as best they can within those rules?

    I don’t think so, and the more the current Rangers Board flaunt plus rules, SFA compliance rules, Revenue regulations and obligations, the more likely it is that all sympathy for any notion of Rangers 2012 Ltd will go straight out the door.

    Further, let’s be quite clear, I doubt very much that the SKY TV deal will simply disappear if Rangers disappear. It may well be adjusted in terms of revenue paid but I think it will only stipulate a reduction in money should there not be 4 Celtic/Rangers games per year.

    This whole situation is a legal mess and any application to depart from the stated rules had better be fronted by someone squeaky clean and super persuasive because if the SPL get it wrong legally then they could grant an application and find themselves in the courts for a very long time to come.

    Note– this is just a quick view and could well be tested by counter argument but having really looked at it for the first time my gut tells me that any Phoenix application is in trouble in terms of rules as they stand.

  25. Litebhoy says:

    Hugh McEwan says:
    10/01/2012 at 7:34 am

    I honestly don’t believe that the reason for unaudited accounts has anything to do with the tax case as this in itself wouldn’t or shouldn’t prevent the accounts being audited. As Hugh has mentioned, it’s more to do with the viability of the company and the unwillingness of GT to rubber stamp RFC as a going concern.
    Can anyone tell me, in terms of the auditors responsibilities, I know that they have to make a statement as to the company as a going concern, how far ahead do they take into account. i.e. if they believe the MBB that this coming years shortfall could be covered by player sales and reduction in salaries etc., is it likely that the auditor has said ok till next october but after that there is no viable business model that would allow this company to continue as a going concern.

  26. corsica says:

    BRTH

    As ever, a superb, insightful and forensic argument.

  27. corsica says:

    Litebhoy – 12 months from date of audit.

  28. abrahamtoast says:

    Regarding the direct debit indemnity scheme, which has been mentioned a few times.

    It is my understanding that the indemnity scheme only provides protection in instances where payment is taken in contravention of the rules of the direct debiting scheme itself, and the mandate held.

    Therefore you would be protected if, for example, a payment was taken after you had indicated to the company that you did not want any further payments to be made, if you had never completed an instruction, or if you were not told the precise amount to be debited by a specific date (10 days prior to debit, I think).

    The indemnity scheme does not provide protection against the payee company failing to deliver goods or services, as long as the original payment was correctly authorised.

    As there would be no doubting that payments had been properly authorised, season ticket buyers would not be able to obtain a refund through this method in the unfortunate event that season tickets were no longer valid.

    They could cancel their mandates and make sure no further payments were made, but would then need to deal with the finance company. Much would then depend on the timing of the event and the amounts still outstanding, the nature of the finance company’s insurance cover and their arrangements for “dripfeeding” RFC with cash (if such arrangements exist), and the general goodwill of a number of parties. The most likely outcome would be that ST buyers would need to make some sort of financial settlement.

    Credit card payments would offer increased protection, but that is outside my area of knowledge, so someone else can chip in here.

  29. jocky bhoy says:

    It’s clear how the loyal fans of Rangers, both online and writing for the chip wrappers, are swallow swallowing this line that it is all about the tax case(s) but regualr readers of this bliog know that it is acutally Rangers’ day-to-day running costs that might sink the Good Ship Dignity.

    I propose RTC updates his/her name and that of the blog to ROTFLMAO – Rangers Operational & Trading Liabilities May Administration Obligate – yeah I know, but I am sure RTC would welcome other suggestions…

  30. william1968 says:

    Brogan Rogan Trevino and Hogan says:
    10/01/2012 at 8:33 am

    So, from that you would conclude that I am of the view that the board do not have the power to say who is in or out of the league, and that any application by Rangers New Co would have to be approved by a vote of 83% by way of a special qualified resolution!

    Well, sorry but I think it is yet more complicated because the articles of association do not exactly say that at all

    _________________________________________________________________________

    Having read your post over and over, I don’t think it is more complicated. Rule 14, if I read correctly, gives the power to RFC/administrator/liquidator as to who it transfers it’s membership share of the SPL to.

    What sprung to mind when reading this was when Motherwell went in to administration, rule 14 suggests, as I read it, that the membership share would have been passed to administrator, Brian Jackson if memory serves right, this allowed him the right to field a team in the name of Motherwell and continue membership of SPL, bear in mind it’s less hassle to let a team continue with it’s fixtures for the season (Gretna), when Motherwell came out of admin, membership share was then passed to the Football company. I would have assumed that all this would have been bone by way of a resolution as you suggest.

    It can be assumed then that similar, despite what we may think or wish for, to the Motherwell scenario will happen with RFC

  31. jocky bhoy says:

    Abrahamtoast – Credit cards – “chip” in – like it.

    Purchase protection – under Section 75 of the 1974 Consumer Credit Act card issuers and retailers take joint responsibility for faulty purchases, If you pay for something with a credit card, valued between £100 and £30,000, that turns out to be faulty or which you do not receive because the company goes bust, you can claim a refund from the card provider.

    So it’ll be mastercard or visa rather than joining a list of creditors. Not sure how the credit card companies would feel about a NewCo run by the same people asking to rejoin…

  32. Casual Observer says:

    William

    “Rule 14, if I read correctly, gives the power to RFC/administrator/liquidator as to who it transfers it’s membership share of the SPL to.”

    Nup. Read again. The SPL board are to determine to whom the share is to be transferred, not the defaulting club or its Adminstrator.

  33. A bad day for the laptop loyal says:

    Following yesterday’s announcement, Jack Irvine working overtime vic the record. (This is good for a laugh!)

    Keith Jackson, Front page!

    “Gers in for £2m Spanish hitman… …McCoist ready to blow his whole transfer budget on £2m goal-machine…”

    Traynor, Back page…

    “Ally set to gamble his Warchest… …ready to splash his entire transfer budget on prolific Spanish striker!”

    (Sorry, I must have missed the point in the supporters meeting when Whyte outlined is assault on the transfer window with a £2m warchest?)

    Meanwhile, over at Parkhead with Craig Swan…

    “Celtic’s bargain hitman… … Rapid willing to accept a fee of just £500k”

    In other news… Hately says “Get behind Whyte, trust in Whyte”

    Althoug to be fair, Scott McCulloch, page 2, does admit… “Plus market investigating Whyte over disqualification… …Whyte also being probed by SFA under fit and proper persons test.”

    All be it, under a “Gers shares ‘PULLED’ from stock market” headline…

    Just wasted my piece-break typing this, I feel dirty. But I thought it would merit a wee chuckle and perhaps mean that your good selves wouldn’t click on their webpage.

    (For the benefit of DR legal team… The reproduction of your publication is for education and critical analysis purposes. All journalists, and I lose the term loosely, have been credited.)

  34. william1968 says:

    Casual Observer says:
    10/01/2012 at 9:20 am

    The more I read it the more it suggested otherwise, reading it again I stand corrected
    By way of special resolution the share can be transferred.

    Using Motherwell as an example, highly unlikely that RFC would not continue in SPL, Again correct me if I’m wrong but rule 14 also suggests Liquidator, which gives credence to the potential of a phoenix company, providing of course that the other SPL members agree to allow that Phoenix in by way of special resolution. I don’t see any of the other 11 member clubs voting against re entry, travelling support, TV money etc To vote against would be suicide on the part of many.

  35. Chris Barrie says:

    Surely the Motherwell comparison is only appropriate if Rangers successfully came out of administration!!

  36. Tractorbhoy says:

    Paranoid Timdroid@08:52

    And that will make their demise all the sweeter. This site has all the information they required and dont forget Phil Mac Giolla Bhain informed them even earlier. However their vile hatred of that man blinded them into believing it was all a timmy plot.

    The real reason they sleptwalked( not sure if that is an actual word) into the abyss is their own laptop loyal fans who run the mainstream media. It is they who the brethren should be targetting at this time as well as SDM.

  37. Daft Laddie says:

    Earlier today, I noticed some posters chuckling/marvelling at the inability or unwillingness of frequenters of the ‘follow follow’ site to grasp the dire circumstances of their beloved club.

    It got me thinking about the reasons why many Rangers fans really do seem unable or unwilling to get their heads around this matter.

    I have come to a view that this is merely indicative of the various demographic strands running through the Ibrox club’s fan base.

    Almost by definition, those with most interest in the club’s fortunes (the ‘zealots’) are those most inclined to contribute to and have their opinons shaped by sites such as ‘follow follow’. [In the passing, there has long been a running joke amongst Celtic fans about literacy levels amongst frequenters of ‘follow follow’, their frequent use of block capitals and apparent need to stress or conclude points with the word ‘fact’ (very often in caps).]

    But taking a broader view (and without the benefit of a research grant with which to test my suspicions), I get the impression that the main strands in the Ibrox faithful may be broken down roughly as follows:

    The die-hard fans: quite possibly those of an Orange persuasion, who find the club useful outwith the marching season, for choir practice, maintaining social contacts and as a vehicle for honing their distinctive world view (I would guess this group’s size at upwards of 25,000 of the season ticketed fan base).

    Those who are capable of understanding the issues, but don’t want to think too hard about them in the hope that they are either smaller than reported or will somehow be taken care of by the Scots establishment; and those who actually understand what’s going on and are willing to discuss it, with a sincere hope that they might find a workable way around/through the situation (possibly around 5,000 of the season ticketed fan base).

    The remainder may have split loyalties (sic), and mostly find their pleasure from being part of the glory that attends a large and successful club (perhaps around 10,000 of the regulars).

    Of course this is merely raw data (!) and would need further research.

  38. Hugh McEwan says:

    Chris Barrie says:
    10/01/2012 at 9:51 am
    Surely the Motherwell comparison is only appropriate if Rangers successfully came out of administration!!

    =====================

    Absolutely, that is a club which has gone into and succesfully negotiated administration. It is still the same business once administration is over.

    Any business which is liquidated is not analogous with this. That business no longer exists.

  39. Chalmers says:

    abrahamtoast says:
    10/01/2012 at 8:59 am
    __________

    Re the Direct debiting scheme, you are correct, IMO. Nothing would prevent a consumer from cancelling their DD authority with the bank, but the debt would still remain.

    And another point is that the payments are to Zebra Finance (or a similar company). Zebra would have fulfilled their obligation by providing the funds to buy a season ticket so what happens to Rangers thereafter has nothing to do with the contract between Zebra and the consumer.

    It’s like getting a personal loan from your bank to buy a car which after two days proves to be a dud. The car may be almost worthless, but you still have to repay the bank the full amount of the loan as agreed.

  40. Brogan Rogan Trevino and Hogan says:

    Sorry William,

    but I am not following you here.

    It is quite clear that the whole tenor of the articles pf association– especially 14– are designed to ensure that the transfer of a share by an Administrator/Receiver/Liquidator etc is something which is to be determined by the company in general meeting AND that in reaching any decision the company must agree such a transfer with 90% of the members agreeing.

    The insolvency Practitioner- in whatever guise– cannot decide who to transfer the share to without that consent and is dependent on the rest of the SPL.

    I think you appear to accept that.

    Going forward from there, unless I am mistaken, the SPL has never before faced a situation where a club goes into Administration and does not come out of Administration yet remains within the SPL. Nor has it faced a situation where a receiver has been appointed, and then that receiver becomes a liquidator with a view to bringing the business of the Ltd Company to a complete end.

    As I have said before we are in completely undiscovered country in terms of this leagie and this situation, and the legalities– whether I like them, you like them, the SPL likes them or Me Whyte likes them— are such that we are all stuck with them.

    As I see it– and from your last post it is also how you may see it too– The debts in Rangers PLC are likely to be so great that that company simply cannot continue in business. It would go into Insolvent liquidation and would have to transfer all of its assets to another company or individual with a view to raising money for its creditors.

    Under such circumstances, the directors are duty bound to govern the company for the benefit of the creditors.

    Any insolvency practitioner must do what they can for the creditors– with Administrators and Receivers having differing duties and emphasis towards classes of creditors— but they have no concern or interest in the future trading or status of a company acquiring the assets or even the business of the company that they are in charge of.

    Therefore, by that stage the future of “Rangers” in football, no matter whatever form that “Rangers” may take is not in the hands of “Rangers” at all. That future rests purely in the hands of the 11 clubs who at that time make up the remaining clubs in the SPL– and it is only if 90% of them can be persuaded to take a ubique and hitherto unheard of step that will prevent “Rangers” starting as a completely new club in the lower tiers of Scottish football.

    You nor I can’t do anything to change that.

    Essentially, the governorship of Rangers PLC over the last x number of years, has lead that club to a position where the club and the PLC has effectively lost all rights to self determination. It has lost the ability to control its own future in football and must now apparently rely on the goodwill etc of others.

    That is what it has come to i’m afraid!

  41. Bartin Main says:

    A bad day for the laptop loyal

    (All journalists, and I lose the term loosely, have been discredited.)

    Fixed that for you!

  42. Daft Laddie says:

    Apologies if this has been answered before, but how difficult would it be for Rangers to buy, say, St Mirren or Kilmarnock, change the name, move the club to play from Ibrox and bob’s your uncle?

  43. Brogan Rogan Trevino and Hogan says:

    sorry last post dashed off quickly so some slack keyboard work with the resultant spelling errors!

    leagie -League

    Me Whyte- Mr Whyte

    Ubique– Unique

    away back to the day job where such slackness is not tolerated without ones knockles being raped!

  44. chicos says:

    william1968 says:
    10/01/2012 at 9:30 am
    Casual Observer says:
    10/01/2012 at 9:20 am

    The more I read it the more it suggested otherwise, reading it again I stand corrected
    By way of special resolution the share can be transferred.

    Using Motherwell as an example, highly unlikely that RFC would not continue in SPL, Again correct me if I’m wrong but rule 14 also suggests Liquidator, which gives credence to the potential of a phoenix company, providing of course that the other SPL members agree to allow that Phoenix in by way of special resolution. I don’t see any of the other 11 member clubs voting against re entry, travelling support, TV money etc To vote against would be suicide on the part of many.

  45. chicos says:

    sorry for the last post. was trying to type a response. 2nd time lucky
    ——

    william1968 says:
    10/01/2012 at 9:30 am
    Casual Observer says:
    10/01/2012 at 9:20 am

    The more I read it the more it suggested otherwise, reading it again I stand corrected
    By way of special resolution the share can be transferred.

    Using Motherwell as an example, highly unlikely that RFC would not continue in SPL, Again correct me if I’m wrong but rule 14 also suggests Liquidator, which gives credence to the potential of a phoenix company, providing of course that the other SPL members agree to allow that Phoenix in by way of special resolution. I don’t see any of the other 11 member clubs voting against re entry, travelling support, TV money etc To vote against would be suicide on the part of many.

    ————————————

    you keep believing it william. keep believing. lol

  46. BLF says:

    Bawsman says:
    10/01/2012 at 7:00 am
    Question please: What will be happening between now and the 31st of January that will allow Rangers to sign off their accounts?

    Bawsman,

    The FTT(T) will sit and could potentially reach a decision – in which case Rangers would know if they had to pay the bill or not, i.e. if it needs to be included in their accounts or not.

  47. Hoopy 7 says:

    . Good old daily ranger.So they are going to spend £2M from their war chest to buy a striker. My A**e.
    If they have that kind of money why do they not pay their PAYE & NIC and VAT like the rest of the business world has to do.
    More to the point, if it is true that the bills to Hector are currently not being paid, what are HMRC doing about it and why can they not have a pre-emptive strike on their “war chest”.
    Said it in previous postings there will be no sales or purchases. Bank and finance houses, particularly credit card companies should be on alert to prevent them taking a massive hit.
    The only way newco could get entry to SPL or any division is to buy an existing club as per Airdrie/Clydebank.

  48. Hugh McEwan says:

    Daft Laddie says:
    10/01/2012 at 10:32 am
    Apologies if this has been answered before, but how difficult would it be for Rangers to buy, say, St Mirren or Kilmarnock, change the name, move the club to play from Ibrox and bob’s your uncle?

    =========================

    No offence, because a lot of people ask this type of question.

    When you say “Rangers to buy St Mirren” what exactly do you mean by Rangers, do you mean the club itself, the club’s owners, the Rangers fans.

    I think a lot of people trea these as if they are synonymous. Rangers exists as an entity in and of itself and totally separate of Mr Whyte or any other shareholder. Yes he owns Rangers, that does not mean he is Rangers.

  49. I’m baffled that they are still trading …

    with it now known publically that the accounts are not audited….what suppliers in their right mind are going to be giving them goods/ services in credit? also surely the players must be getting worried …

    do you think we’ll see a lot of transfer requests from twitchy players?

%d bloggers like this: