Dispelling Timmy myths

[Bluedell 5,329]

The following article has been doing the rounds for a few days, and as usual it's full of lies and incorrect and misleading information.

 

Murray International Holdings Ltd (MIH) have submitted an AR-01 file to Companies House. This is a mandatory filing and is updated annually to provide information about the share capital of a company.

 

If viewed with just a cursory glance, Sir David Murray appears to retain 70% ownership of the voting shares, and to control the company.

 

However, a closer look provides a very different insight. He appears to have lost control of the business which he named after himself and built from the ground up. His shareholding in this company formed the basis for the bombastic estimates of personal wealth that have littered Scotland’s newspapers for over a decade.

 

Even for those with an eye for minutiae, the complex web of off-shore trusts into which he has placed the ownership of his MIH shares can be mind-numbing. To cut a long story short, 95% of David Murray’s MIH shares have been transferred to a company called IFG Holdings (CI) Ltd. This is an offshore trust company which is one of many created by the Irish Republic-based IFG Group. Among other things, offshore trusts can be difficult for tax inspectors and litigants to pursue.

 

It is fascinating to learn that one of the directors of the company that today nominally owns Rangers FC plc (through its majority holding in MIH) is a citizen of the Republic of Ireland, Declan Kenny. Rangers FC have come a long way under Sir David Murray. Prior to Murray’s involvement, Declan would have been an unlikely trialist at Rangers. Today, Declan nominally owns the club!

 

The idea of one of Scotland’s best known businessmen ’caching’ his shares in one of Scotland’s best known businesses in an offshore trust provides food for speculation about his fears for the future. While it is impossible to guess David Murray’s true reasons for placing his MIH shares in a trust, it is not too difficult to imagine that he fears the worst regarding Rangers’ tax case. If Rangers lose the case for the amounts HMRC are claiming, the club would almost certainly have to file for administration. Is it possible that Sir David fears for his personal wealth in the blowback of such an event?

 

However, what is really interesting about the recent filing is the revelation that Lloyds Banking Group’s private equity arm, Uberior Equity Ltd, not only owns 30% of MIH’s voting shares, but holds 165 million convertible preference shares. MIH currently has approx. 17.5 million shares outstanding.

 

Therefore, if Lloyds choose to exercise their conversion rights, the preference shares will become voting shares and Sir David Murray’s shareholding would be diluted to just 7%. Prior to this, these preference shares will enable Lloyds to take dividend income from any free cash flow generated. This development puts Lloyds in control of MIH in everything except name.

 

It is actually a very shrewd solution to the MIH problem for Lloyds. It gives them all of the levers they need to control the business without having to consolidate MIH’s accounts with their own. So rather than have their own annual financial results damaged by further bad news in the UK commercial property sector, they can keep these assets “off balance sheet” until such time as they can be sold or consolidated to show a healthy profit. Having borne almost all of the risk of Sir David’s foray into the property market, they may feel entitled to almost all of the future gains should a profit eventually become realisable.

With the recent share transactions to cleanse the MIH balance sheet of assets related to another of David Murray’s vehicles for funding Rangers (MSL technically owed MIH Ã?£60m but had no income and no possibility of ever paying this money) MIH now owns about 87% of Rangers FC.

 

So, taking this altogether, when Walter Smith says that “Rangers are being run by the bank” it is no longer just a simplistic way of saying that they have to do what the bank manager says- it is true in everything but name and can become literally true at the drop of a hat.

David Murray now effectively has no say in what happens at Rangers and the ability of the bank to dilute him down to just 7% ownership of Rangers’ parent company makes him yesterday’s man. The AR-01 form does not specify any conditions around converting the preference shares to voting stock, but it seems unlikely that Lloyds put would barriers in their own way.

 

Just because Murray has transferred his shares to an off-shore trust company does not mean that he is not the beneficial owner. Most of his Murray Sports shares have been owned by IFG Nominees CI Ltd for a number of years, and I have never given it a second thought. That's the same company that owns the shares in MIH, and not the one mentioned in the article.

 

Just because "Declan" is a director of the company does not mean he owns the club and it is nonense to suggest it. I'm a director of a number of companies, one of which is based in the Republic of Ireland, and it doesn't mean that I own any proportion of any of them.

 

If the club did go into administration Murray's wealth would be unharmed. Rangers are a limited company. Limited means that there is limited (or no) liability on the shareholders. Murray will have placed his shares in an off-shore trust because it benefits him personally from a tax point of view. Standard stuff when you are at his level.

 

Now for the biggest lie. Uberior owns Cumulative Redeemable Preference Shares. This entitles them to divdends only. No mention of the word "Convertible". There is no right to convert them to Ordinary shares. Murray's ownership cannot be diluted to 7%.

 

It's not worth wasting any more time in the article, but there's nothing in it that is of any note, other than to highlight their continued capacity for being liars.

Edited February 25, 2011 by Bluedell

[Frankie 8,127]

Bluedell 1 - 0 Celticminded

 

Again.

[pete 2,494]

Bluedell 1 - 0 Celticminded

 

Again.

 

Frankie that must be about 10-0 by now.:smile:

[Frankie 8,127]

Yip, certainly a walkover mate!

[franker 1]

Paul Brennan of CQN has posted this article as some sort of serious financial scoop on the dealings of MIH. Brennan has offered numerous financial critiques of MIH in recent years yet can't return a profit on his own entrepreneurial venture, IT company Local Planet Solutions.:smile:

[Bluedell 5,329]

Paul Brennan of CQN has posted this article as some sort of serious financial scoop on the dealings of MIH. Brennan has offered numerous financial critiques of MIH in recent years yet can't return a profit on his own entrepreneurial venture, IT company Local Planet Solutions.:smile:

 

To be fair, it's difficult to run a company when you don't know the difference between a director and a shareholder. Or perhaps he thinks the cleaner should get all the profits.

[franker 1]

In all seriousness, it cant be easy to concentrate on running your business when you are being threatened by members of the white underclass wing of the tim support.(they felt he was too far up Lawells backside and his blog was a vehicle for boardroom propoganda). Add to that his choice of friends, Sean South or should i say McNally of the Mirror and Phil Ma Bankaccount over in Donegal. Imagine having to turn to they 2 when you are in need of advice???

[bmck 117]

The most hilarious thing is not that they'd spend all that time researching and get it wrong, it's just that they'd spend all that time.

[maineflyer 0]

I'm just surprised they managed to spell 'director' properly. Well done bluedell.

[biggordy 0]

They, along with others, continually spout such fantasy in order destablise our Club and it's time they were taken to task.

Another forum had to close down a thread recently which had posted some shite from mcnally. However it still posted it in the first place even though it was unsubstantiated drivel.

This kind of thing must be challenged immediately.