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Firm claims £3m Rangers cash release was 'unauthorised'

Trustees for a pension fund which was considering loaning Rangers almost £3m have claimed the cash may have been released to the club without consent.

 

The Jerome Group is one of five parties chasing a share of £3.6m which Rangers' administrators had seized from Craig Whyte's lawyers, Collyer Bristow.

 

Trustees said there may have been an "unauthorised release" of £2.9m prior to Rangers entering administration.

 

A court hearing over the disputed £3.6m is due to start on 30 March in London.

 

Rangers' administrators Duff and Phelps had the cash seized from Collyer Bristow after expecting to find more than £9m in the account.

 

Contested claims

 

The administrators claim the cash was left over from Craig Whyte's takeover of the Ibrox club and should be handed over.

 

However, four other parties are contesting this.

 

 

Loan firm Ticketus is also claiming an unspecified amount.

 

Another finance firm, Merchant Turnaround, of which Mr Whyte is a director, is claiming £1m.

 

Jerome Group plc Pension Fund claims it is owed £2.925m.

 

The fund is owned by the Worthington Group, which Mr Whyte has a small stake in.

 

Trustees for the Jerome Group said on Monday that the fund had been considering making a secured loan to Rangers of just over £2.9m.

 

In a statement, the trustees said: "These funds were being held to the specific order of the trustees.

 

"The trustees gave no authority to the club's solicitors to release the funds and the sums held until recently in the club's solicitors account.

 

"However, the trustees now understand that the funds may have been the subject of an unauthorised release to the club in breach of this undertaking prior to the club entering administration."

 

The statement said the trustees had "obtained favourable independent commercial advice" over its claim.

 

 

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http://blogs.channel4.com/alex-thomsons-view/dangers-rangers-tax-shambles/850

 

Monday 12 March 2012 6:33 pm

Alex Thomson

 

Last week I asked for non-Rangers and Celtic fans in Scotland to give me their observations on the current Ibrox detox. Several hundred emails later, I surface to bring you the first of a series of blogs.

 

First of all, a big “thank you” for the hundreds of emails and tweets. It is clear that very few Scottish football fans are of the Ahmedinejad tendency – almost nobody wishes to see Rangers ‘wiped off the map’. But when it does come to proper and fitting punishment, a strong consensus exists, of which more later.

 

What comes through strongly is the belief that the Rangers debacle is a genuine opportunity to rebuild Scottish football on a more interesting and fairer model. Ramsey spoke for almost everyone when he wrote: “Most see this as the perfect opportunity to better the league and the game as a whole.” A chance to recreate genuine competition in the SPL and consider wider matters beyond the “the self-interest of not just the old firm but the entire SPL.”

The key observation though, is that the current focus on owner Craig Whyte and declaration of his not being “fit and proper” to run a football club is missing the point.

 

As non-Old Firm fans see it, the decade or more long practice at Rangers of allegedly paying players one amount for tax purposes but another larger amount to save around £45 million on tax via so-called employee benefit trusts began way before Whyte. Legal or illegal. A least one former director has publically confirmed this too.

 

Rosaleen said: “It all stemmed from before Whyte’s arrival, and yet nobody up here from the media is doing any serious investigating beyond him!”

 

Though that doesn’t square with recent significant revelations in both the Sun and Mail shedding light on Ranger’s alleged practice of paying stars one sum but telling the authorities they were paying another, to save millions in tax. We await judgement from a tax tribunal as to whether or not this practice was legal. That is actually happened is not apparently in dispute, it is the legality that is under question.

 

And here we get to a huge groundswell of opinion from aggrieved fans beyond the Glasgow cauldron (pace Partick Thistle) Because the rules clearly state that you have to tell the authorities full details of player contracts or they are ineligible. If Rangers did not do this – and it is still an “if” pending that tribunal – a decade of silverware, championships and glory is under possible forfeit. The stakes could not be higher. If that is the case, Tony writes:

 

“In effect Rangers have fielded many players over many years in all competitions who were ineligible to play. This is confirmed by former Rangers director Hugh Adam last week and is subject to a current commission of inquiry by the Scottish Premier League.”

 

And it was also confirmed by Mr Adam who told the Mail the practice had gone on for longer than a decade and predated the SPL.

 

What many fans cannot understand though, is how key individuals in the game were serving both as directors of Rangers FC and on the Scottish FA and SPL. The job of directors – beyond trotting along to Ibrox and sitting in the box in a suit – is to oversee proper governance of the football club.

 

Campbell Ogilvie, for instance, is current President of the SFA and was not only a director of Rangers during the period under investigation but also company secretary of the club. It was his job to know about contractual arrangements with players.

 

So far Mr Ogilvie has not stood aside from his current role whilst the SPL investigation is underway. How many such contracts were signed? How many did he see? Did he know about them at all? If he did, did he sanction them being signed off? If he didn’t – why wasn’t he doing his job? Is there not a conflict of interest in his current position?

 

We are currently putting these and other questions to Mr Ogilvie via the SFA, but as things stand we are told he is not doing any interviews but is ‘distancing himself from the current investigations’. When we asked if he has formally stood aside pending the outcome of the investigation, we were told he has not.

 

As one fan put it: “If it is held to be true that Rangers, in implementing an unlawful tax evasion scam on a huge scale, fielded ineligible payers whilst those responsible were serving as directors of the regulatory and licensing bodies, we can say with certainty that the game of football in Scotland has been corrupt for 15 years or so.”

 

One Clydebank supporter put it thus: “I am now reading that I’ve been ploughing my hard-earned cash into a league that has effectively been rigged in favour of one big side…but now I’m expected to just move on.”

 

This is the key area fans want some answers about and where – right or wrong – they feel they are being short-changed by what they see – time and time again – as an over cosy relationship between the Old Firm, the SFA and SPL, and the Glasgow media.

 

One oft-repeated refrain is: “The media in Glasgow keep telling us how much Scottish football needs Rangers – what they mean is how much they need Rangers, not Scottish football.”

 

Nobody likes a cheat in sport. And here it’s claimed we have one in the shape of the loudest, biggest club with what some see as a tawdry history of bigotry, violent fans and a frankly supremacist culture. So when the bully and the cheat gets his comeuppance, there will be some vitriol.

 

If anything though, I was surprised by the considered responses most made to Rangers’ implosion. But of course there’s real anger out there:

 

“We have been duped…for 15 years,” wrote one fan, “and we are now sinking the boot into the perpetrators of the deceit. They have had a few days of pain. We’ve suffered nearly two decades. To hell with them and all who support them or feel sorry for them. They are cheats, simple as that.”

 

Well, it is for the HMRC and the tribunal process to decide if Rangers FC was, in fact and law a criminal and cheating organisation in the period under examination. But we can say there’s already evidence starting to emerge in public to support that as yet unproven allegation.

 

With the clock ticking at Ibrox, fans across Scotland are not short of ideas about what should happen. But as I said, remarkably few want Rangers wiped from the face of the earth. They just want existing rules implemented – a near-revolutionary suggestion it would seem, given the current unfolding saga at the top of the Scottish game.

 

Coming up next; Crime and Punishment – What to do with Rangers Football Club; should they be found guilty; and is liquidation the only way out?

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The SFA’s “Fit and Proper” Test – A Farce? Part 2 – Dave King and Paul Murray – Bad News for the Blue Knights?

 

You can see Part 1 of this piece here.

 

What about Dave King?

 

According to the Scotsman article referred to by me in Part 1 (and I commend the full piece to readers) :-

 

“During a breakfast briefing with daily newspaper correspondents, it also emerged that Rangers director Dave King will not be permitted by the SFA to be an official at the Ibrox club post-administration as he was still serving on the board when they entered their current insolvency event under Whyte.“

 

This is an interesting one too. There is no note on the SFA website of this decision about Mr King. Mr King remains listed by Companies House as a director. Even though the publicity was that he had been dismissed by Mr Whyte on the Friday before administration.

 

But the Articles do not mention being a director at the time of an Insolvency Event as being a bar. Instead it is being a director within 5 years prior to a member club undergoing an insolvency event. Indeed, this means that a director of a team which had had an insolvency event in, for example 1980, and who had resigned as a director in 1976, would still fall foul of the Articles. There is no limit on how far back the restriction goes – as long as you were a director within the five years prior to an insolvency event at a club, then you are potentially persona non grata. I will come back to this point below.

 

Mr King might wonder why he has not been afforded the same due process given to Mr Whyte.

 

He might also wonder why Andrew Ellis is not mentioned either. After all, if the position of the SFA is that being a director at the time of an insolvency event triggers a ban, then why not mention Mr Ellis, or indeed Gary Withey?

 

As I say, in any event, the Article does not say what is being reported here.

 

Mr King has been a director of Rangers for over 10 years. He is accused, but denies, criminal tax fraud and evasion on a huge scale in South Africa. The linked article describes in detail the allegations against him, and the findings by a South African court.

 

Mr King was described as follows by the judge:-

 

The court had seen King testify for four days and “are unanimous in finding that he is a mendacious witness whose evidence should not be accepted on any issue unless it is supported by documents and other objective evidence”.

 

“It was remarkable that King showed no sign of embarrassment or any emotion when he conceded that he had lied to the (Sars) commissioner in a number of his income tax returns. In our assessment, he is a glib and shameless liar.”

 

To be fair to the SFA, this was only published in February 2011, and the tax issues were only known about since around 2001.

 

As the newspapers report continues:-

 

“In 2001, Sars levied a tax assessment against King for R912.8 million (£77 million), which has not yet been finalised. The High Court in Pretoria heard in 2002 that King’s income tax returns for the years 1990 to 2001 reflected a modest annual income of R60 000 (£5,000) and King had then asked to be deregistered as a taxpayer.

 

Sars launched an investigation into King’s affairs in May 2000 when it became aware that he had bought an Irma Stern painting for R1.76m (£148,000) and could not reconcile this purchase with his declared gross income of R60 000.”

 

The final determined tax assessment for Mr King and his companies totals R2.7 billion (£228 million)!

 

Yet for all this information, and the finding by a court that Mr King ADMITTED to lying in his tax returns (which one assumes is a crime in South Africa as it is here), and the finding that Mr King is a mendacious witness and a glib and shameless liar (which one assumes could constitute perjury), the first indication by the SFA that they are concerned about Mr King comes in a chat with journalists over breakfast, regarding him being on the Board of Rangers when the music stopped!

 

As Mr Regan says in the part of the Scotsman article in quoted in my previous piece – “The fit and proper person test is a myth. There is no test!”

 

Mr King’s continued role on the Rangers’ board for over ten years is proof of that.

 

However Mr Regan’s breakfast comments might help Mr King, because he can argue that he has not had due process, nor proper notification of a decision. If no formal decision has yet been made, then Mr Regan has jumped the gun, and could have caused his organisation as much trouble as Mr Whyte did for Rangers in unguarded and premature comments to journalists about Martin Bain!

 

Which Former Directors of Rangers plc might be Disqualified as not “Fit and Proper”?

 

Every director and office bearer of Rangers going back to the 15th February 2007 falls foul of the 5-year pre-insolvency rule.

 

That list is as follows:-

 

Craig Whyte

 

Dave King

 

Andrew Ellis

 

Gary Withey

 

Phil Betts

 

John Greig

 

John McClelland

 

Martin Bain

 

Donald McIntyre

 

Alastair Johnston

 

Paul Murray !!!!!!!!!

 

Donald Muir

 

Michael McGill

 

James Wilson

 

Sir David Murray

 

Quite how is Mr Murray, who is at the head of the “Blue Knights” going to get round this issue?

 

Mr Regan has made it clear – all he needs to do is to fill in the form and say that he is a fit and proper person! The problem is solved!

 

Conclusions

 

The SFA fit and proper person test is a farce. As I joked previously Hannibal Lecter gets in as long as he is prepared to lie on the form, or to indulge in “smoke and mirrors” tactics re interpretation of the rules.

 

Whilst the English FA is setting up a body to deal with this, the SFA refuses to do so, as it would involve a “cast of thousands”.

 

Maybe Mr Regan could ring his colleagues at the FA and ask them how they plan to do it, or even read the documents published by the FA?

 

If Mr Regan feels that the matter is one where the Articles are not fit for purpose, as was pointed out by the late Paul McBride QC last year in connection with the Neil Lennon suspension saga, then they should be changed.

 

As it stands the Articles regarding the fit and proper test (which does not exist!) do not reflect either what happens in reality, or what Mr Regan thinks should happen. Therefore they must be changed.

 

The Rangers mess is extending through all areas of Scottish football. It might allow the fundamental reforms needed to prevent a recurrence in the future, or, on a more modest level, to allow the SFA to do what it is required to do!

 

http://scotslawthoughts.wordpress.com/2012/03/11/the-sfas-fit-and-proper-test-a-farce-part-2-dave-king-and-paul-murray-bad-news-for-the-blue-knights/#comment-2512

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The guy who wrote this is on twitter now claiming the SFA accused him of lying, pig-headedness and hung up on him when suggested there might be a conflict of interest with Campbell Ogilvie's position during the investigations into Rangers (EBT and 2nd contracts)

 

The SFA say the their President Campbell Ogilvie "did not know" about the EBT contracts while he was Rangers secretary, despite it being his job to know. The SFA will not allow Channel 4 news to interview Ogilvie.

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The guy who wrote this is on twitter now claiming the SFA accused him of lying, pig-headedness and hung up on him when suggested there might be a conflict of interest with Campbell Ogilvie's position during the investigations into Rangers (EBT and 2nd contracts)

 

The SFA say the their President Campbell Ogilvie "did not know" about the EBT contracts while he was Rangers secretary, despite it being his job to know. The SFA will not allow Channel 4 news to interview Ogilvie.

 

As the Channel 4 guys said in his blog I posted yesterday it is amazing that Ogilvie isn't be investigated never mind still operating as President of the SFA

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The SFA will be forced by FIFA to punish Rangers by docking them 3 points for every game they fielded ineligable players. Effectivley every season since it can be proved the two contracts started Rangers finished on 0 points. This will see them relegated to the first division as a minumim.

 

If the SFA do not do this (and I dont know how this will work with SFA/SPL being different) Scotland national team and Scottish clubs won't be able to play in Europe.

 

A statement released on Saturday by FIFA said if Sion were not punished by the Swiss FA, Swiss football would in turn be sanctioned.

 

"Following the latest developments in the FC Sion/Olympique des Alpes SA (OLA) case, and in particular the decision of the Court of Arbitration for Sport of 15 December 2011, the Executive decided to give a final deadline of 13 January 2012 to the Swiss FA to enforce the registration ban imposed on OLA by the FIFA Dispute Resolution Chamber and confirmed by the Swiss Federal Court and to sanction the attitude of the club repeatedly trying to circumvent this decision in a legally abusive manner."

 

"As a consequence, all matches in which the relevant players participated shall be declared forfeit or three points shall be deducted respectively.

 

"Should this deadline not be respected, the Swiss FA will be automatically suspended from 14 January 2012 onwards"

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Part 2

 

Last week I sought the views of non-Rangers football fans in Scotland about the current meltdown at Ibrox. This is the second of three blogs setting out how they see it.

 

The straightforward view of all fans who responded is that, understandably enough, Rangers should be punished if found guilty of the allegation of systematically cheating their way to years of football success.

 

That said, the desire for justice, if there is indeed guilt, was balanced by extreme suspicion that Rangers would somehow escape justice. This is based on the widespread belief that the powers that be, from TV through the SFA to the SPL, desire Rangers in the top-flight league at almost all costs.

 

Joe wrote -

 

“If the SFA/SPL fail to act… then the repercussions for Scottish football will be even greater than the SPL without RFC. The fans of other clubs will unite as never before to ensure that justice is done and the rules are adhered to.”

 

13 rangers r 602 Punish Rangers if theyre guilty, say fans

 

Jamie said, if guilty, Rangers should be demoted and emerge under a different identity, perhaps “Govan FC”. He said -

 

“But they must build from the bottom anew. Applying to the league in the same way as Inverness Caledonian Thistle did when they were formed as a brand new club.”

 

And many looked abroad for European precedent where big teams had fallen foul of the laws administrating the game. The names Marseille and Fiorentina came up time and time again as clubs which had paid the requisite price, in the view of many.

 

Brian wrote saying that if Rangers are found guilty of malpractice, Uefa should take action -

 

“Allowing RFC, in whatever guise they eventually emerge, to remain in the SPL would make a mockery of their Financial Fair Play initiative. This is something I sincerely hope the 11 SPL chairmen will consider before rubber-stamping their return to top flight football.”

 

And talk of that 11 brings us to a big gripe – that the voting structure of the entire SPL badly needs reform because the Big Two – Rangers and Celtic – can block anything they don’t like.

 

As Stuart put it -

 

“If Rangers are not in the SPL next season, the voting structure of the league can be changed. Currently any motion can be blocked by two clubs. This enables the Old Firm to block any proposals put forward by the rest of the league.”

 

The current 11-1 voting structure is seen by many fans merely as a way of keeping the status quo the way the Big Two want it, not least in terms of cash and the distribution of TV money.

 

The view is that Rangers should go through due process and, if guilty, be required to pay back those who owe them money – which might turn out to be you and I, taxpayers, the way things stand.

 

If they have to sack people there is considerable sympathy for those individuals. If they have to sell Ibrox there is virtually no sympathy at all. Play by the rules. Start again from the bottom. Rebuild with a new identity and ethos.

 

As Michael said -

 

“If Rangers are allowed to remain in the SPL under current conditions and be given a slapped hand, I think from speaking to many others and reading other fan forums most of the fans will walk away from football.

 

“We do not follow non-Old Firm teams just for us to finish third, or to let the Old Firm have a league. Scottish football will change NOW, and Rangers have caused it all.”

 

Though you’d have to say, even in the context of Scotland’s peculiar SPL and two-team domination, the spectre of fans really walking away to concentrate on their golf, as one Aberdeen fan threatened – or equally, of banding together en masse – seems a little romantic.

 

In our final part of the trilogy, we’ll look at the widespread idea that what is happening to Rangers FC is in fact a great opportunity to improve Scottish football across the board, from governance at the top, down to the numbers coming through the turnstiles at the smallest of league clubs.

 

Read Alex Thomson’s previous Rangers blog

 

Read Channel 4 News’s coverage of the Rangers situation

 

Follow Alex Thomson on Twitter

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