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Keith Jackson - How £1 turns into £125m

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KEITH JACKSON follows the money trail at Rangers which reveals the staggering sums of cash that have changed hands at the Gers.




OK, so you’re just back in from the paper shop. First off, congratulations on your purchase, needless to say you’ve made an excellent choice.


Now, turn out your pockets and sift through the shrapnel. Is there a single shiny pound coin in the change?


If so, what do you have planned for it? How far can you make it stretch?


To help out, here’s some research on what you’ll get for your money.


Homer Simpson novelty socks, a pack of chewing gum, a McChicken Sandwich, a three-minute hair colour revitaliser or de-frizz treatment, two second-class stamps, a track from iTunes, a pack of hair-clips, half a dozen morning rolls, two pints of milk or a kilo of sawdust.


Alternatively, you could take it for a punt. Turn it into millions for the price of a pair of Primark knickers. Or, if you don’t fancy the odds of 125,000,000/1 here’s an even better idea.


Buy Rangers Football Club.


There is, of course, an old adage that you don’t make money from investing in football but this ongoing omnishambles at Ibrox bucks that trend quite spectacularly. Just lately, Rangers have been a sure thing.


When Craig Whyte handed over his £1 coin to Sir David Murray on May 6, 2011, (he did hand it over didn’t he?) he was in fact, unlocking a jackpot. He was also opening up a financial scandal.


Ever since, the level of sheer greed around this bloated cash cow of a club has been truly shameful and staggering. Also, it appears to be unrelenting.


Just last week the club announced annual losses in excess of £14m.


This was eye-watering stuff which might just have shaken a massive rump of the Ibrox support to its core.


Yesterday’s protests against the board at Somerset Park suggest many of these fans have now woken up to the fact their club is being milked once again for all of its worth.


So let us strip this story back to its starting point and examine the enormous sums that have come and gone between then and now. All for the price of Whyte’s pound.


There is no precise way of knowing how much Donald Muir, the financial fixer who plucked Whyte from obscurity and delivered him on to Rangers’ doorstep, profited from his seminal role in this debacle.


But given his paymasters at Lloyds wiped out an £18m debt overnight and also freed itself from the spectre of a £50m tax bill, it seems safe to assume Muir’s reward would have been suitably juicy.


It was certainly an extraordinary piece of business. A great deal for Murray and Lloyds, a bargain for Whyte, almost certainly a lucrative pay day for Muir.


But the onset of an unimaginable and unmitigated disaster for Rangers.


And this was only just beginning.


One of Whyte’s closest allies during his takeover was David Grier of Merchant Corporate Recovery. In 2011, shortly after Whyte was in place, MCR was bought over by Duff and Phelps.


Again, it is safe to assume Grier was no worse off as a result of this buy-out. He was also given a leading executive role with Duff and Phelps.


And Grier, having already been paid by Rangers to give Whyte financial advice, was now also about to cash in on the club’s administration. On February 14, 2012, Whyte succeeded in having Duff and Phelps appointed as administrators.


The final bill for their services came to more than £5.5m.


This, of course, was after Whyte had raised £27m from a season ticket deal with Ticketus.


In his nine months as chairman he also stuffed the taxman for around £15m in unpaid PAYE. And the £18m of debt that he bought from Lloyds for a pound?


That disappeared too in June 2012 when Charles Green, the man hand picked from nowhere by Duff and Phelps as the club’s saviour, failed to agree a CVA and liquidated the old company.


Green then picked up Ibrox and Murray Park for a £5.5m snip, which was another astonishing deal given that it was conducted in a closed shop without other offers being invited by the administrators.


OK, so how far has Whyte’s pound stretched by this stage?


Conservatively – and even without that phantom £50m EBT bill – over £70m worth of solid trading has now been accounted for on the back of his initial transaction.


And Green’s big hands haven’t even started rubbing yet.


We know the rest inside out. Two lumps of season ticket cash, fetching a combined total of around £16m. An initial cash injection into the Newco of £12m. In December 2012, an IPO worth a further £22m.


Now admittedly, this is back of a fag packet accounting but even so these figures add up to £50m.


And yet last week the club’s financial director Brian Stockbridge signed off on a set of results and admitted almost all of it had vanished. In fact, a mind-blowing total of around £6m of the IPO cash was emptied out the back-door on ‘fees’ almost as soon as it had come in through the front.


By June of this year, according to Stockbridge, £11m was all that was left in the Rangers’ account.


Green, meanwhile, was buying himself a retirement castle in France (What is it with Rangers? How come everyone ends up in a castle in the end?) after trousering more than £1m in wages, bonuses and pay-offs in less than a year.


In fact, he was sent on his way with a £600,000 goodbye when he should have been sacked for gross

misconduct and told to leave the premises with nothing. Well, nothing more than his £3m worth of shares.


The ever-generous Stockbridge signed off on that one too, having just awarded himself £200,000 for watching Ally McCoist win the Third Division title. The Rangers manager, of course, was also handsomely rewarded, with wages of £825,000 for winning the one title this club never previously had ambitions to win.


And yet McCoist came cheap at half the price.


Were it not for his public validation of Green then a wary Rangers support would not have rushed to stump up for 38,000 season tickets.


And without this phenomenal level of backing, Green’s plans to make a killing on a hurried share issue would also have been up in smoke.


So what is the Ibrox totaliser standing at now? £125m? Maybe a good deal more? All divvied up on the back of a one pound deal. Yes, this Rangers story is a disgusting tale of sickening greed, dragged out over a sustained two-and-a-half year period of obscene scavenging.


All the while the club itself continues to drift towards the rocks for a second time with those at the helm seemingly too busy barricading themselves in to notice the imminent danger.


And, really, who could blame them?


In this shameless orgy they’ve enjoyed quite a bang for their buck and groped a great deal of flesh for a pound.

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