Who Are The Horsemen Of The Rangers Apocalypse?

By on Mar 20, 2012 in Finance, Latest, Scottish Football | 0 comments

The dizzying raft of exposes emanating from investigations into twenty-first century Rangers (and a few years before, if ex-director Hugh Adam’s revelations are at all credible) is truly now doing my head in. Plymouth Argyle’s pock-marked spell in administration last year produced enough material for almost daily updates on this site. And the Rangers situation is matching this and more, with the complexities of financial law – and the variants between English and Scots law – providing enough evidence to back almost any argument.

What I thought was obvious satire on the very premature idea that Rangers have been “saved” produced some agreement from intelligent sources, even though the comment that I’d written pseudo-poetic tripe was probably the fairest. After all, the last fortnight has been tripe fortnight, why shouldn’t I join in? Most of this has come directly or indirectly from four sources: current Rangers owner Craig Whyte; immediate predecessor David Murray, current Scottish FA president and Rangers ex-company secretary Campbell Ogilvie and administrators, Paul Clark and David Whitehouse.

And, rounding off the fortnight with suitable farce, Clark and Whitehouse were apparently only “joint interim managers of Rangers” until this week – an odd role for accountants, even if many Rangers fans think they’d have done a better job than Paul Le Guen. Anyway, here’s my genuine take on Whyte and Murray, with the others to follow as this week unfolds. And no pseudo-poetic tripe contained therein will be deliberate. I’m not trying any more satire or parody, with reality like this.

CRAIG WHYTE’S WEB OF INTRIGUE

 

I see the phrase “web of intrigue” and I know I’m looking at a plot summary for a movie… a bad movie. In fact, a bad American movie; and a bad American movie made for TV. There was once even a whole film called “Web of Intrigue” which was either so bad it was brilliant…or represented the grossest lack of imagination in cinematic history. Yet “web of intrigue” somehow suffices as a description of the mess in which Craig Whyte’s ownership of Rangers appears to be at the moment, with an almost daily promise of more and worse to come.

After a hearing in London’s High Court last Thursday week, there were several claims on a sum of £3.6m which had been extracted from a “client account” held by Collyer Bristow, the solicitors used by Whyte in his takeover of Rangers last spring. Companies were lining up to claim their part of the cash like Roman slaves claiming “I am Spartacus”, or approaching the Scottish venture capitalist personally to say “you are Craig Whyte and I claim my £5” (cultural references for the late middle-aged, sorry if you are under about 42). Just for a moment, I considered checking my bank statements in case a couple of hundred quid of it was mine. Certainly, the under-18s of the club I support, Kingstonian, play matches at Banstead Athletic’s ground. But then Whyte has no connection with Banstead, and never has. So I’m not about to submit a claim.

Rangers’ administrators were hoping to gain “visibility” of (their curious way of saying “find”) £9m held in the Collyer Bristow account. But even that would not have been enough to go round the organisations claiming that Rangers under Whyte owe them money. At least partly among the missing millions (as in “there are no missing millions,” Craig Whyte, Sky Sports News, 27th February), is the “Jerome Group” pension fund’s authentically specific claim of £2.925m, which the fund’s trustees fear suffered an “unauthorised release” from the Collyer Bristow account before Rangers went into administration.

The pension fund, of the property development company Worthington Group (minority stakeholder: Liberty Capital Ltd – prop. Mr C Whyte Esq.) had “provided funds amounting to £2.925m to solicitors acting for the club (Rangers).” And the trustees were “considering the possibility of making a fully secured loan” to Rangers – the commercial sense of which has been left unexplained – when they discovered that the “loan” appeared to have been made already. Whyte has already been likened by critics to a “Walter Mitty character,” although had Mitty not been a character from a book, he might have sued. With money now possibly gone missing from a pension fund, it is worth “considering the possibility” that, on top of everything else Whyte has appeared to be during his Rangers tenure, he’s now turning into Robert Maxwell.

The wide-eyed enthusiasm with which Whyte told STV’s David Cowan back in October that he was doing deals “as we speak” has become more inappropriate with each “deal” that has been revealed. And you have to wonder whether Rangers would actually have been in a semi-decent position (tax bill pending) if Whyte had been as wide-eyed with enthusiasm about actually running the club properly as he was about his deal-making, one example of which has, of course, attracted particular attention.

On the face of it, the “Ticketus” deal is pretty straightforward. Whyte “sold” a total of 100,339 season-tickets to a firm which specialises in buying them. And from the money Whyte, as Rangers owner, received for this transaction, he paid Lloyds Banking Group £18m, the sum Rangers owed the bank at the time of the takeover. But this was reported unquestioningly, and “exclusively in the Daily Record, as Whyte paying off Lloyds with borrowed money, as distinct from the “personal wealth” he promised to use. However, Ticketus claim they bought the tickets, which rather put the kybosh on everyone’s grand plans to write Whyte out of the story.

Rather than Whyte entering into a complex borrowing arrangement which might have left his secured creditor status in doubt, he could claim he bought the debt with proceeds from the sale of something he owned, like some middle-class, upper-middle-aged woman on the BBC’s Cash in the Attic selling rare ancient Chinese antiques to pay for a day at a health spa. Yet clearly, there is a problem; otherwise the issue wouldn’t be heading for the Scottish Courts. And one problem is that Whyte sold these tickets one day less than one month before he bought Rangers. How he managed that, without access to a time machine, is the key to how Whyte’s tenure should be viewed.

It was either authorised by the Rangers regime or somehow done while they weren’t looking. And, as we discovered last week, there’s no point asking David Murray, the owner of Rangers, and presumably these tickets, at the time, because he said he’d never even “heard of Ticketus before,” let alone any deal Whyte had done with them. Whyte’s other “deal” to help fund Rangers – the sale of Rangers catering contracts to a firm called ‘Close Leasing’ – is not an unusual transaction for a ‘club in crisis’ to carry out. And it only sticks in my mind because Close’s address – Tolworth Tower, Surbiton, Surrey – is just over my right shoulder, in good view on a clear day, as I type this.

But Whyte’s life outside Rangers continues to impact on his life within the club. The fact that Pritchard Stockbrokers has “fallen into a special administration regime (SAR)” three weeks after Whyte resigned as board secretary (to avoid “another distraction” from Rangers) hasn’t hit the headlines because such resignations have been Whyte’s long-time modus operandi. However, the ferocity of the Financial Services Authority’s announcement of the SAR, citing “serious concerns about the way that (Pritchard) has been running its business and handling investors’ money,” suggests that headlines may yet be hit. And whenever a new name appears in Whyte’s tale, there’s sure to be an old name along in a minute. “Business associate” Aiden Earley, his ‘Regenesis’ business construct, and his brother Wulstan were all linked in to a “mystery” £250,000 alleged-investment in the afore-mentioned English non-league club Banstead Athletic.

Whyte, meanwhile, “has no involvement in the management of” the afore-mentioned Jerome Group Pension Fund, and Whyte’s company Liberty Capital owns only a small stake of the fund’s parent, Worthington Group Plc (reported as anything from 7.54% to 18%). However, 53% of said parent is owned by…“Wulstan Earley…through…Regenesis Holdings.” The “unauthorised” release to Rangers of Jerome Group funds remains a mystery. Of course. At the time of typing, Craig Whyte seems to have taken an almost monastic vow of silence. It has been some time since we’ve heard him gabble nervously into a microphone that Rangers will “come out a fitter, leaner organisation and that’s what we’re all working hard to do.” But however many times the administrators publicly suggest that Whyte is “out of the picture” or an “irrelevance,” you can be sure we will hear his version of events again. And whatever we hear from him, it will be caught up in some form of web…and it will be intriguing.

DAVID MURRAY – “IT WASNAE ME”

 

I viewed Rangers ex-owner David Murray’s small press gathering on March 13th with a dark cynicism. Everyone in the Rangers saga has economised with the truth. Murray’s claim that it was “ironic that you (the press) should meet me today” on the 36th anniversary of the car crash in which he lost his legs, was a different low altogether. There was no irony, or co-incidence, in the timing of the meeting. Murray arranged it, not the press.

I find it almost impossible to believe that Murray could have forgotten the significance of the date until he started speaking, although later in the briefing, he did seem a little “forgetful” about certain aspects of Rangers’ past, as we shall see. And it worked. Newspapers and agencies ran with it. The Herald newspaper even opened up with it: “Murray has fought many battles in his life. Yesterday was the painful reminder of the biggest of them all.” And it was Murray who did the reminding. Cynicism? Well, I submit that Murray’s dwarfs mine.

The briefing of a handful of hand-picked Scottish journalists was designed to put Murray’s side of the Craig Whyte takeover. He told the chosen few: “It is a Scottish trait, isn’t it? ‘It wasnae me, blame somebody else.’” And Murray was never more Scottish than on March 13th. This Scottishness is important to Murray. He sold to Whyte, after pondering whether he “passed the sniff test,” because “he wasn’t a foreigner;” a statement which certainly passed the “racist test,” although few media outlets dared say so.

Aside from emotional blackmail, hypocrisy and racism, then, what else was wrong with Murray’s breaking of his silence on Whyte’s takeover? To be fair to him – not that I haven’t been so far – he has kept quiet about Whyte because the ‘Share Purchase Agreement’ (SPA) which detailed the mechanics of the actual takeover, did not allow him to “make or cause to be made any comments or statements about the company or its management” while Whyte was in charge. This fully explains Murray’s near-silence on Rangers matters since last May, and Whyte’s insistence on blaming ex-directors, rather than Murray himself, for previous, off-shore problems. And now that the club is in administration and often in court, Whyte isn’t about to line any more lawyers’ pockets by complaining about Murray breaching the SPA. Hence Murray’s holding of court in his “plush” Edinburgh offices.

When facts were on Murray’s side, the detail was exhaustive. Murray Group finance director Mike McGill recited a chronology of his boss’s contacts with Whyte and his advisers, from early meetings (“always chaperoned”) to the “volunteering” of documents to the administrators “which may be of use…in pursuing (the) funds” from Whyte. That, however, was only the half of it. Herald journalist Darrell King, who broke the “big tax case” story in April 2010, suggested “there was no attempt” by Murray to “sugar coat the situation.” But this was nonsense.

Murray “deeply regretted” selling to Whyte; how could he not? Yet this was no mea culpa, other than in the context of “(In) 15 or 16 fantastic years… I genuinely put just short of £100m into Rangers… now all of a sudden, it’s my fault.” He would not have sold to Whyte “if the information (about Whyte’s business record) had been available to me.” “We did check to the best of our ability,” he claimed, which inspired a wave of cynicism from journalists not at the gathering but whose papers questioned Murray’s wisdom at the time of the takeover (events possibly not unconnected).

The Daily Telegraph’s Roddy Forsyth was moved to “spluttering guffaws” by this plea of ignorance He noted that the Telegraph was among many newspapers that published extensive, unflattering business profiles of Whyte which, it now turns out, dwarfed the amount of “due diligence” Murray and his people performed. But it was Whyte’s fault for not telling Murray about matters such as seven-year disqualifications from company directorships: “It is down to the individual, is it not, to make us aware of that,” Murray protested.

Nor would he have sold to Whyte “if I’d have known of the Ticketus thing,” although we still await an explanation of how Whyte could have sold tranches of Rangers season-tickets to an outside firm, while Murray was still owner, without anyone at Rangers noticing. Indeed, Murray said “we had never heard of Ticketus before,” a phrase which had to be furiously contextualised as never having heard of the Ticketus deal with Whyte before, as. Rangers had “used (Ticketus) previously for short-term deals.”

Having set out Rangers case on the Employee Benefit Trust (EBT) issue, he claimed that with “tribunal judges… about to make a decision… I don’t want to be seen to be influencing either way,” combining hypocrisy with an arrogant assumption that tribunal members would care what he said anyway. “People say Rangers tried to avoid tax but we’ve not done anything of the sort,” he added, clean forgetting that tax avoidance was the whole point of the EBTs. “There is no contractual element on the part of the players,” he suggested, a central issue for “tribunal judges” to decide… not that Murray was trying to influence “either way.”

“The remuneration trust was always mentioned in the accounts, it was never hidden,” he noted, correctly – a fact never in dispute. But on what is known as the “wee tax case” (involving a mere 7-figure sum), Murray’s chronology was shiftily awry. He conceded that Rangers owed £2.8m, adding: “We provided for payment in the club accounts. Craig Whyte didn’t pay it” However, leaked information suggested £500,000 of this was paid last July, which ties in with HMRC arresting £2.3m of Rangers’ money in September to cover the debt. Darrell King wrote in the Herald last week that: “The bill has now risen to £4.1m due to penalties incurred through Whyte’s non-payment.” Yet first reports of a £1.4m penalty appeared in the Herald last August 13th, written by…Darrell King, who had earlier covered for Murray’s Ticketus amnesia and now appeared to be suffering a memory loss all his own.

Murray was a natural advocate of the “Scottish football can’t afford to lose Rangers” school, suggesting that would have “quite a major financial consequence to the Exchequer” (not unlike setting up EBTs to avoid tax). He also referred to the “hidden amount of money people spend going to games,” his self-awareness and sense of irony departing simultaneously. “I think that should be taken into consideration,” Murray concluded, adding his weight to the mendacious argument that Rangers are too big for, well, justice.

Seasoned Murray observers must be used to this sort of stuff. He has never shirked his personal PR responsibilities and certainly did not last week. Yes, it was “a huge mistake” to sell to Whyte; Murray was “the captain of the ship” and was prepared to “take my share of criticism.” But it wasn’t a very big share, because “I was primarily duped,” “this guy (Whyte) said he was going to spend money,” “we had received proof of funds,” “you would expect a legal document to be honoured,” and “people cane be puzzled but genuinely none of us knew.” Or, to put it another way: “It wasnae me, blame somebody else.”

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