Craig Whyte actively seeking to leave the SPL to secure Rangersâ?? financial future

[ian1964 10,386]

Rangers, under threat of administration because of a £50 million claim from the taxman, will renew their ambition to gain entry to the Premier League as well as reconsidering proposals for an â??Atlantic Leagueâ??, according to new owner and chairman Craig Whyte.

 

Her Majestyâ??s Revenue and Customs is seeking £49 million in back-taxes, interest and penalties from Rangers, a claim that could see one of the great institutions of British and European football become the gameâ??s highest profile financial failure.

 

In an exclusive interview with Telegraph Sport, Whyte said he would actively seek to leave the SPL to secure Rangersâ?? financial future, and suggested the club could even consider running two teams, one each side of the border, once the case and its implications have been dealt with.

 

Whyte also confirmed that while he believes Rangers will win the case, administration is the likeliest outcome if the tax tribunal, scheduled for November, goes against them.

 

Asked if administration would follow, Whyte said: â??It is one of the possibilities we have looked at, yes. The choice, in terms of an adverse finding, is pretty obvious really.â?

 

Administration would bring an immediate 10-point penalty and the possibility of more sanctions, depending on the clubâ??s exit strategy. But Whyte is adamant that there is no threat to Rangersâ?? long-term future.

 

â??Whatever happens Rangers will be moving forward. I will not allow the club to go bust. I can control the debt process absolutely, and whatever happens Rangers is going to be there playing in the SPL at Ibrox.â?

 

Whyte would like them to play further south as well, describing Rangers as â??a Premier League club with the revenue of a Scottish clubâ?.

 

He has committed to finding £5 million of working capital and £5 million a season for transfers, and may bring in third-party investment to help him do so. But he sees Rangersâ?? future in a move away from the Scottish game.

 

â??I think I can turn this around and sort out the problem. I have put money in and Iâ??m prepared to put money in but I have said it is not a bottomless pit,â? he said.

 

â??We are in Scottish football so it is not a viable proposition to go put £100 million into the team. If we went forward into another league set-up, say the English Premier League, then it is very viable to put £100 million more in. We are not there at the moment, but we would like to be.

 

â??[Joining the Premier League] is clearly something that we would like to see examined, it is something we are working on behind the scenes. But there are other potential ideas in terms of European leagues, joining some of the Nordic countries, the Netherlands to create a league.â?

 

Whyte bought a controlling stake from former chairman Sir David Murray last May for £1, assuming responsibility for £18 million of bank debt and the tax liabilities in the process. Since then early exits from the Champions League, the Europa League and most recently the League Cup have compounded the financial issues, and questions about Whyteâ??s background have intensified.

 

The first Old Firm game of the season 10 days ago brought welcome relief with a 4-2 win over Celtic, and in the febrile atmosphere of Glasgow football that may be all that really matters to supporters. The financial issues may not be resolved away so easily.

 

The threat to Rangers stems from a claim for £35 million in back-tax and interest and £14 million in fines relating to the Murray regimeâ??s use of a tax-avoidance device called Employee Benefit Trusts.

 

HMRC claims Rangers wrongly used EBTs for a decade, effectively to reclassify regular salaries as loans that avoided income tax and National Insurance.

 

Rangersâ?? own advice when the schemes were established was that they were legal, and HMRC made no complaint until last year, when it changed its guidance on EBTs.

 

It has now targeted Rangers among 5,000 companies it believes misused EBTs.

 

Whyte believes the club have been singled out as a test case and accuses HMRC of leaking information.

 

Interest intensified earlier this month when High Court judge Lord Hodge, hearing former chief executive Martin Bainâ??s claim for wrongful dismissal, ruled that the club faces a â??real and substantial risk of insolvencyâ?.

 

Whyte acknowledges the risk, but insists the clubâ??s long-term future is secure. He has repaid the £18 million to Lloyds, a fact confirmed by the bank, and transferred the debt to Rangersâ?? holding company, which is ultimately owned by his Liberty Capital Limited, a company registered in the British Virgin Islands. Whyte has committed to writing off the debt if the club avoids administration.

 

This structure means Whyte is the largest secured creditor and has control of any administration. â??Nothing is out of my hands because I control the club, I am the only secured creditor, or rather Rangers FC Group is. So on any decision, while HMRC might push, the group company controls the debt.â?

 

This may be tested in administration. SPL rules require clubs to exit administration with the agreement of all creditors â?? a Creditors Voluntary Agreement â?? but HMRC is unlikely to agree.

 

The SPL has complete discretion over what penalties to apply if a CVA is not agreed, but Whyte is certain they will not face penalties that could end in relegation.

 

â??You might say that is a theoretical possibility but that is not going to happen.â? Whyte defends his business record which, by his own admission, is mixed. He says he specialises in turning round companies in trouble, and as such Rangers was a marriage of personal and professional interest. He is listed as a current or former director of 11 UK-based companies, some of which have failed.

 

â??I get involved in businesses that are struggling and that means you sometimes get involved in the messy side of things. But overall I have had more successes than failures,â? he said.

 

Whyte, who has homes in the Scottish Highlands, Londonâ??s Belgravia and Monaco, will not be drawn on his personal wealth â?? â??It would make my life a lot easier if I did but, frankly, Iâ??m not going to have journalists going into every aspect of my private lifeâ? â?? but says he has genuine business credentials.

 

â??I have got four offices in the City, I have venture capital funds, I have asset management companies, I have stock-broking businesses, I have businesses in France, in Holland, I have got thousands of employees, but I donâ??t see why I should make every aspect of that public.

 

â??Iâ??ve got everything from financial services to ticketing to cinema services, asset management, construction, I have got investments in all these sectors. I operate like a venture capital partnership so at any one time thereâ??s 20-25 companies in the portfolio.

 

"I operate a family company in the city too that manages the family investments. We do all sorts of deals, public to private, commodity trading, Forex, a wide variety, but we try and keep it low key.

 

â??Sometimes we might own them for two years, sometimes for five. But with Rangers we want to create a long-term sustainable business, which we will. But it's going to be a rocky road.â?

 

http://www.telegraph.co.uk/sport/football/teams/rangers/8792112/Craig-Whyte-actively-seeking-to-leave-the-SPL-to-secure-Rangers-financial-future.html

[Gribz 743]

Id at least like to see discussions and plans for what an Atlantic league would look like. We've just came out our worst financial situation (or might still be in it) and struggle to compete with English Championship clubs for players yet after only 9 games we have more than double the point tally than teams like Hearts who in the past could at least be in sight after 9 games. The gap is unrealistic.

 

The SPL has no future IMO as things stand, they cant even get their own plans and ideas together never mind make changes that will improve the game.

 

I still think there has to be a case for joining the English leagues if Welsh sides are included. If that means starting in League 2 id be for that, within one season we'd be playing big clubs like Charlton, Sheff Wed and Sheff Utd which is more appealing than St Mirren, Dunfermline and Inverness.

[pete 2,494]

Oh dear that old story again. Sand track going nowhere.

[chilledbear 16]

Any business oriented folk on here who would like to comment on the last 7 paragraphs ??

[Stefanovitch 0]

The English Premier League is a pipe dream as is an Atlantic league I'm afraid but certainly worth considering.

 

With an Atlantic league involving (Danish, Swedish, Norwegian and Dutch(?)) clubs would the tv revenue come anywhere close to what Sky are pumpinmg into the EPL?

[GovanAllan 0]

The moving leagues is pie in the sky until the unholy uefa say so and that's not happening anytime soon. Was more interested in him talking about his business a little more info this time and more info is good.

[Bluedell 5,329]

Any business oriented folk on here who would like to comment on the last 7 paragraphs ??

 

I believe much of his business interests are off-shore so it's too difficult to establish the true level of his wealth.

[der Berliner 3,219]

The next best thing we can hope for is UEFA re-structuring the current competitions to some European League format. As it is now, it is just a money-spinning event for the big leagues and big guns, so the money goes solely to those countries and teams. The Atlantic League will not happen, unless it is under UEFA's hands (as they have already threatened to ban clubs involved there if it isn't ... so much for their power and the freedom of the clubs ... essentially, much like the Catholic church in the early middle ages), and even if it does, the money involved will be minimal.

 

What we should do is arranging a Challenge Cup sort of thing tournament with some US teams - during a "winter break" maybe? - when some big guns of Scotland and England cross the big pond and rake in some dollars.

 

As for Swansea and Cardiff ... methinks they joined the English FA/League in a day and age when there was not even a Welsh League at hand. If anything, we can cite Berwick Rangers as a sample of cross-nation club transfers. (Though that was done based on geographic neccesity more than anything.)

[Juancornetto 1]

What a difference to read a well written and impartial piece of journalism as opposed to the sensationalist trash of the red tops. Whyte makes a lot of sense here and his point that the type of companies he gets involved with being failing or failed businesses speaks volumes about the situation that Murray and Bain created for Rangers. It also gives a perspective to the muppets who cite how many companies he has bankrupted or pushed under, it's all relative, if you operate in that kind of distressed marketplace you are bound to lose a few hopeless cases now and then.

 

He clearly has a Plan A, B and C which is reassuring to learn. Plan A is run the club as is, win the HMRC case and build from there. Plan B is lose the HMRC case, go into administration, become the single secured creditor (in effect becoming the owner of the club again but responsible for taking it back out of administration by negotiating settlements with other creditors), taking the points deduction and building from there. Plan C looks a longer term strategy to change the set up in which Rangers play, whether it be joining a revised English league or an "Atlantic" League and being in a position to invest heavily in the club thereafter.

 

You could say that Craig Whyte can't lose....in any of the scenarios above he remains in control and in ownership of a worldwide brand with high revenue and exposure. Worst case scenario is we lose the HMRC case, the SPL go nuts and relegate us for not securing agreement with a creditor and we play Hamilton Accies and Queen Of The South for a season.

[calscot 0]

I can't see the SPL relegating us - the clubs need our money and the money we generate. A one team league is not going to be attractive to TV or sponsors.