Chairman's statement on accounts

[Zappa 0]

Thanks for that BH.

 

Another question you may have the answer to: Was Ellis a director of QPR when they entered administration in 2001?

[BrahimHemdani 1]

Seen an interesting point raised by someone regarding the signing off of the accounts potentially being held up by the court cases with the former directors.

 

For example, one or two of the unpaid payments or bonuses that Bain is sueing for may well fall within that accounting year ending June 30th. So, maybe the outcome of that court case has the potential to affect the figures in the accounts by hundreds of thousands??

 

The claims by Bain and McIntyre may have an impact on the accounts but not in the way you describe.

 

If the claims arose before 30 June or refer to the period before 30 June then there would be an issue as to whether or not they give rise to liabilities in the accounts. In other words if the Directors have reason to believe that there is a possibility that Rangers might lose the case then they ought to make a provision for that in the accounts. This is the similar to when a bank thinks it is going to lose money on mortgages, it writes off the money even before it is lost. Another way to deal with the potential liability would be simply to make a note in the accounts without actually reserving or making a provision for the loss. They might be arguing over (a) whether or not the Directors have good grounds for taking whatever view they are taking or (b) exactly how to treat any provsion that is made for the potential payments if the case(s) are lost.

 

Even so, I doubt that this is worth arguing over to the extent that the accounts remain unaudited or are qualified if audited.

 

My feeling is that the auditors want to qualify the accounts; effectively saying that they have been unable to satisfy themselves as to their accuracy or that they represent a true and fair reflection of the financial position as at 30 June, either way that would be cataclysmic for Rangers.

 

BD may be better placed than me to clarify the circumstances that would give rise to the different treatments.

[BrahimHemdani 1]

Thanks for that BH.

 

Another question you may have the answer to: Was Ellis a director of QPR when they entered administration in 2001?

 

Apparently not at that time, Zappa.

 

April 2, 2001 - QPR Official Statement - RANGERS IN ADMINISTRATION

 

The Board of Loftus Road PLC regrets to inform shareholders and supporters that after consultation with its advisors it has decided that the best course of action to help ensure the Group's longer term survival, is to put the holding company, Loftus Road PLC, and its wholly owned subsidiary The Queens Park Rangers Football and Athletic Club Ltd (QPR), into administration.

 

INDEPENDENT/Nick Harris - QPR go into administration

 

Tuesday, 3 April 2001

 

Queen's Park Rangers went into administration last night after the struggling First Division club's parent company announced its losses are running at £575,000 a month. "This decision [to put QPR into administration] has not been taken lightly and is a direct result of the losses incurred by the group," a statement from Loftus Road plc, which also owns Wasps rugby club, said last night.

 

Wasps have not been put in administration because a takeover by an unnamed buyer is understood to be imminent. It has been reported that a former director of QPR, Andrew Ellis, is considering a takeover of the football club but negotiations are understood to be in their infancy.

 

Ellis bid was in the July of that year and withdrawn in the August.

 

In any event even if he was a director at the time a club went into administration that wouldn't disqualify him from having another go.

Edited December 2, 2011 by BrahimHemdani
Delete duplicated paragraph

[Zappa 0]

In any event even if he was a director at the time a club went into administration that wouldn't disqualify him from having another go.

 

No, you're spot on! He would have to have previously been a director at a club which was in administration twice during a five-year period or at two different clubs that have each gone into administration in a five-year period. There goes that theory as to why he's involved, but only behind the scenes.

 

Thanks again.

[ian1964 10,372]

LITTLE can be read into the latest Rangers accounts due to the ongoing dispute with HMRC according to a specialist in football finance.

 

The Ibrox club released their first accounts since Craig Whyte’s takeover on Wednesday, but Neil Patey of Ernst & Young says that while there are positives to be taken from the figures, the new owner was right to highlight the “dark cloud” which still hangs over the league leaders. He also stated it was unlikely that any auditor would be keen to sign off on the accounts until that matter was resolved.

 

Claiming that the figures released this week were almost irrelevant given the enormity of the bill they could face if HMRC are successful, Patey said: “Absolutely. There are a couple of reasons why I don’t think anyone should get too hung up on these accounts. A) they are largely pre-Craig Whyte’s ownership so they are largely history and not that relevant to the current ownership structure and B) frankly, what happens with the tax case will make a dramatic difference. If it goes against them for any significant amount of money then obviously there are huge financial implications and I would presume Craig Whyte, and I am only guessing here, but he will be cautious about putting too much money into the club until they have clarified that position.”

 

If Rangers win the case, that too could colour the situation. “Once it is clarified one way or the other, then, if he has the money, and there have been rumours as to how much money he actually has behind him, but if Craig Whyte has the money then he has made a commitment that he will invest something like five million a year over the next five seasons,” added Patey.

 

Stating that he had found nothing too surprising in the accounts, he said that from as profit and loss point of view the turnover was semi-encouraging. Up by £0.9m, he stressed that was despite dwindling SPL attendances, the fact fans have less money to spend and the corporate world is spending less on hospitality. “But what was slightly disappointing was the fact the cost base was up, hence the profits of between £4-5m deteriorated by about £4m,” said Patey.

 

But while greater policing and stewarding costs contributed to that, Patey said he also suspected that wage negotiations and the enhancement of player contracts had played their part.

 

“It is worrying but it is a trend across most SPL clubs where the turnover is under pressure and they are having to manage costs as best they can. Ideally clubs should try to break even and not make a loss and I suppose Rangers, to their credit did not make a loss. They just didn’t do much better than break even.”

 

The confirmation yesterday that the club is seeking to secure a tie up with Brazilian club Corinthians was also hailed as a positive. The Ibrox club have spent the last few years cultivating contacts and links in the USA and have recently made it clear they are also exploring the likes of India and Patey says it makes commercial sense.

 

“Like the top English clubs, Rangers and Celtic are a big enough global brand to try to expand overseas, firstly to try to find players in countries where you might not have to pay massive transfer fees and secondly, if you employ an Indian player or a South Korean player, if he does well you can then sell more merchandise out in those countries and build up a bigger following and enhance your global revenue.

 

“That has to be a strategy to explore that avenue because the alternative is the domestic market and we know attendances are under pressure and in these difficult times fans have less money to spend and, having just renegotiated a Sky contract that is locked in for four five years, you won’t get more money from TV revenue. So, what is left to you is the global market and they have to investigate ways to increase their global footprint.”

 

Any advance though, could be overshadowed by the outcome of the tax case. The club are challenging a bill for £35m in back taxes, as well as £14m in penalties after paying players from an Employee Benefit Trust between 2001 and 2010. The next hearing is due to begin on 16 January. Until that issue is clarified, Patey says auditors will be reluctant to sign off on the accounts. “I don’t see anything sinister in it at this stage. But it would be an interesting question for the auditors if they try to have them sign the accounts before the case is determined. From an auditors point of view, you would challenge the going concern if you think there could be a big event which could see the club running out of cash.

 

“You try to get clarity before you sign so I wouldn’t be at all surprised if you didn’t see that audit opinion being given until after the tax hearing in January. There might not be full clarity then but you would expect a greater degree of it.”

 

http://www.scotsman.com/sport/football/spl/moira_gordon_tax_case_remains_key_to_rangers_financial_future_under_whyte_1_1990265