All should become clearer now in the tale of Craig Whyte and Rangers

[ian1964 10,409]

The ownership of Rangers by Craig Whyte is entering a crucial phase as the tax tribunal approaches

 

The key passage in the story of Craig Whyte and Rangers will happen in the not too distant future. That much is certain, after yet another week in which the Ibrox club found themselves courting front as well as back pages of newspapers.

 

The occasionally warped situation where football fans have more of an interest in directors and balance sheets than full-backs and strikers has one positive offshoot. That is, scrutiny of those purchasing clubs should limit the potential for ruinous scenarios.

 

Notwithstanding the fact boardroom change is inevitable following most company buyouts â?? let alone hostile ones such as this â?? the departures from Rangers directorships of John Greig and John McClelland were notable. Both made it clear they felt hampered and frustrated by Whyte's management.

 

Greig is the former player perhaps most symbolic of the club. McClelland remains a respected figure in Scottish business circles. Both were part of an old regime at Rangers that expressed concern about Whyte's takeover in May; now, the old guard has been all but eliminated.

 

Two of that group, Martin Bain and Donald McIntyre, have between them successfully frozen £780,000 of Rangers' assets as they pursue breach-of-contract cases. These are increasingly bitter battles, with Whyte firing spoken bullets towards the duo who, the owner believes, were complicit in Rangers' previous financial mess.

 

In riposte, former Rangers board members will point to a £40m borrowing at the end of June 2009. By the time Whyte purchased Rangers two years later, he did so by buying out a bank debt of £18m.

 

In that 24-month spell, Rangers won four out of six domestic trophies. Bain was the chief executive and McIntyre the finance director who collaborated with the Lloyds Banking Group on a business plan. The potentially significant impact of Employee Benefit Trust payments came to light during this period, but there has never been any doubt about the origin of these schemes in relation to Rangers: via the Murray International firm, effectively the football club's parent company, several years earlier.

 

The former Rangers management team would also dispute the widely held notion that Whyte's due diligence uncovered a separate tax liability the club continue to dispute. That came about, it is instead argued, because of a precedent ruling that allowed Her Majesty's Revenue and Customs to "revisit" Rangers.

 

A day after the exits of Greig and McClelland, Whyte reopened his war with the BBC by withdrawing all club co-operation with the broadcaster. Central to this move was a documentary about the Rangers owner's business history, screened on Thursday evening, which has since triggered legal action by Whyte.

 

For all the arguments about the public-relations merits of such a stance, one thing is clear: a sizeable chunk of the Rangers support has no problem with Whyte taking on the BBC. They regard this as a fightback against perceived reporting injustices. The blunt reality is that a vocal element of fans care little about the past of directors; they want to know their club is safe and that their team will win games. The entrenched attitude here is similar to that towards Bain and McIntyre.

 

Whyte used another broadcast outlet, Scottish Television, to insist that his Rangers legacy will be a positive one. Which is, external and media wars aside, the most meaningful issue here. After all, that relates to Rangers' very future.

 

The message from Whyte about the onset of administration if Rangers lose their upcoming tax tribunal is now more consistent. The consequence of that turn of events has seemed obvious for months, with the club patently unable to cope with a bill that could reach £49m in the event of defeat to HMRC.

 

Whyte, as the secured creditor, would then inherit a business with only his chosen overheads. A key question that has to be asked to Whyte is: "Who will be the primary beneficiary based on the structure in place if Rangers enter administration?"

 

Without threats from a bank or taxman, Whyte could then be in a position to sell Rangers on for a profit on an investment that was initially £18m and has since increased. Yet the penalties and brutal realities attached to administration go beyond those that would hamper Rangers' SPL title bid; few financial analysts see any sense in this being a chosen course of action for Whyte when he took Rangers on.

 

The man himself insists everything possible will be done to keep Rangers from administration, an entirely understandable public stance. Still, the most bemusing aspect of Whyte's Rangers takeover â?? as has been the case from day one â?? relates to why he completed the deal with such a massive tax liability possibly forthcoming.

 

The other recurring theme around Ibrox is what will happen if Rangers successfully challenge the tax authorities. If that occurs, Whyte will control a business without two of the main creditors that have cast such a long shadow over the club in recent times. Rangers would, in such circumstances, be more attractive to potential investors.

 

Would Whyte, at that stage, seek a short-term profit by selling the club on, or prove that his talk of long-term investment is meaningful? Before he took over, those in the Ibrox boardroom were convinced Whyte did not intend playing a long game at Rangers. It may be no coincidence that Dave King, who has been linked with buying Rangers regularly in the past, has not severed his ties by resigning as a nonexecutive director since Whyte took over.

 

Whyte's hint that Rangers would not challenge any loss of the tax tribunal highlights at least one thing. That is, he wants Rangers' circumstances clarified as soon as possible. In the meantime, a lack of European football in any form leaves an obvious hole in their income stream.

 

The club have been embattled for some time, but how Whyte handles forthcoming events will be more worthy of scrutiny than what has come before.

 

http://www.guardian.co.uk/football/blog/2011/oct/21/craig-whyte-rangers?CMP=twt_gu

[chilledbear 16]

Makes a change to read an Article from a Scottish Journalist, where it is fair and balanced, and are also informed.

[GovanAllan 0]

Anybody know when the big day is.

[Zappa 0]

Anybody know when the big day is.

 

I think it's about a month from now if you mean the EBT case.