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Some thoughts on yesterday's HMRC appeal result:




Yesterday’s news that HMRC’s latest appeal to the Upper Tax Tribunal with respect to the Revenue’s pursuit of the Rangers (oldco) for claimed tax avoidance failed had many of our fans in buoyant mood last night. Unfortunately, as much as the outcome is welcome, there should be little satisfaction for football supporters in Scotland with the ruling. Not if sporting integrity is indeed what such people cherish above all.


According to common definition, a pyrrhic victory is a victory with such a devastating cost that it is tantamount to defeat. I think that explains this perceived ‘win’ pretty well when it comes to Rangers in particular. After all, while we may now consider the EBT scheme used by Murray International Holdings as legal, the harm done to the club during the years of investigation has come at the huge detriment of Rangers and its passionate supporters. For example, Sir David Murray has made it clear he believes the oldco would not have been sold to Craig Whyte if HMRC had recognised the uncertain nature of their claim. This, in turn, would mean the oldco never needed to enter administration nor suffer from Whyte’s mismanagement resulting in the club eventually being forced to resume life in the old Division Three. Does this chain of events really point to a club ‘cheating’ or have Scottish football’s authorities been culpable in this farce?


First of all, I don’t think there have been many winners out of Rangers’ problems. Yes some other clubs will consider their position strengthened but other than Celtic, who has really gained out of this for the long term? In fact, it’s doubtful the more sensible of Celtic fans will take much pride in any title wins gained since Rangers left the top division. Sure, the millions earned from a free run at Champions League money for at least four years isn’t to be dismissed but with a half-empty Parkhead and a lack of top players interested in taking part in a one-horse race means there’s not much genuine excitement to be had in the East End of Glasgow. Why else do so many Celtic fans spend their time obsessing over Rangers? On the other hand, it can’t be doubted that other supporters may be enjoying the absence of Rangers more – with Aberdeen, Dundee Utd and St Johnstone enjoying particularly successful (relatively speaking) seasons of late. However, do these fans and clubs really think this will continue if and when Rangers returns to the top flight? In fact it’s more probable their success will be temporary and of those non-Rangers fans that highlighted sporting integrity, I’m unsure how they’ll feel about a phantom tax debt that almost killed one of their rivals for a few seasons of superiority.


Nevertheless, as much as we may enjoy the discomfort of those hypocrites who wanted Rangers (and its fans) to apologise for what appears to be increasingly criminal-looking actions of one man, our support should now concentrate on who is culpable for our current position. At the top of the tree, and despite his smug protestations, Sir David Murray is primarily at fault. This self-proclaimed captain of industry continues to insist he was ‘duped’ by Craig Whyte. Are we really to believe one of Scotland’s most erstwhile successful businessman didn’t have the resources to realise Whyte was a chancer? I certainly don’t and I’ll certainly forever hold Murray and his banking associates forever responsible for their cowardly actions in selling to a man who had previously been banned for seven years as a director. The custodian who almost killed the club – that should be Murray’s Rangers legacy.


In saying that, no matter what Murray did or didn’t know about the purchaser, Craig Whyte must also answer for his actions. Not only did Whyte apparently deceive Ticketus and our fans, he deliberately withheld monies due to HMRC for tax and national insurance. That is unforgivable and we can only hope he will answer for his alleged crimes in court. The same goes for anyone else involved in what seems to be a pre-meditated sequence of events to drive Rangers to the brink of ruin via fraudulent activity. With that in mind, Rangers fans are now quite rightly asking what the Scottish footballing and political authorities could have done to address this at the time. Just how hard did the SFA and (then) SPL work to save Scotland’s foremost sporting institution from hitting the rocks? Where were the politicians when Craig Whyte steered the ship towards such dangers? One thing is for sure, issues such as the five-way-agreement will long linger in the memory of every Rangers supporter. The clamour for punishment and ‘contrition’ from other clubs and the media has forever damaged the landscape of our national sport. Shame on those who bought into the hyperbole and flawed media analysis: the same people noticeable by their absence in light of the most recent judgement or, worse, still repeating their dubiously sourced information.


Clearly, sporting integrity has been an oft-used phrase in recent years within Scottish football. From low quality media commentators looking to increase their profile, to spiteful football administrators, directors and managers; this moral fallacy arguably does not and never will exist. Quite simply the problems Rangers faced were used to ship up the questionable business models of other clubs and indeed the organisations that run the game. Integrity is all about honesty and there are too many aspects of the Rangers tax case saga that lack such fortitude. Scottish football isn’t a bastion of virtue – it never has been and certainly won’t be as long as the people responsible for attempting to swindle our club out of fairly and legally won trophies hold onto positions of power.


Of course no-one is suggesting Rangers – now or in the past – is whiter than white either but all the last few years has shown is that we’re far from the Establishment club some wish to suggest. We can only hope – all of us – that lessons have been learned from what has happened to Rangers and any other club which has been led towards ruin by less than honourable owners. In that respect, we all have a responsibility to ensuring the future security of our national sport. Anything less and the whole sham has been for nothing. Perhaps HMRC can be first to admit their institutional failures and refrain from a further appeal? Perhaps the SFA/SPFL will acknowledge their lack of leadership and promise a full investigation? Perhaps the Scottish and UK governments will announce a public enquiry into the actions of state-owned banks, publicly funded broadcasters and tax departments? Perhaps some media commentators will admit their coverage has been less than balanced? I’d certainly hope the Rangers Fans Fighting Fund is used to carefully explore what recourse our fans have against any of the above?


In conclusion, as some have already suggested, it’s impossible to ask Rangers and their fans to simple move on from yesterday’s judgement. Yes we’re not perfect ourselves and we absolutely must concentrate on the problems that face our club now as well as learn from our own mistakes. However, neither should we forget nor forgive those people who have acted in a wholly negative fashion towards our club. We should not and will not surrender to our enemies. We have suffered more than most but we will be back. And not without winning some proper battles along the way.


Rangers then – Rangers now – Rangers forever.

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It would be interesting to get any sort of information about how much influence Murray had on the actual sale of Rangers to Whyte, when we had Lloyds people working on MIH and our club at the time. Maybe he held all the power along with the pen that signed the sale. I wouldn't be surprised if he didn't though. The whole behaviour of HRBoS and Lloyds in this should not be overexaggerated, but neither be forgotten. As soon as they pushed through the sale and got their money, they withdrew all financial backing for the club ... hardly a coincidence IMHO.


On another note, we should not forget that despite our demise, our stay in the lower divisions (and the blue pound left there) probably helped those clubs down there more than a decade of SFL/SPFL and SFA work would have, at least financially.

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It would be interesting to get any sort of information about how much influence Murray had on the actual sale of Rangers to Whyte, when we had Lloyds people working on MIH and our club at the time. Maybe he held all the power along with the pen that signed the sale. I wouldn't be surprised if he didn't though. The whole behaviour of HRBoS and Lloyds in this should not be overexaggerated, but neither be forgotten. As soon as they pushed through the sale and got their money, they withdrew all financial backing for the club ... hardly a coincidence IMHO.


On another note, we should not forget that despite our demise, our stay in the lower divisions (and the blue pound left there) probably helped those clubs down there more than a decade of SFL/SPFL and SFA work would have, at least financially.


I don't doubt Murray was told what to do by his bank which is why I ask for a public enquiry to be considered.


However, that doesn't take away from his actions in not only using risky tax schemes but allowing others to do his bidding for him.

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The operation has been successful but the patient is still at death's door. Time to remove the leeches.


It's certainly important that we avoid taking our eye off the ball when it comes to current events. However, we should be capable of addressing the past and working towards a better future.


One positive aspect of yesterday's ruling is that most fans are singing from the same hymn sheet on that topic. Such cohesion should be taken into other subjects.

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I think the ones that started it all got what they wanted and that was to put the rangers in the shit and they achieved their mission someday they will be named and shamed .

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Another great read there Frankie. It looks like there's going to be a lot of pressure put on the Scottish football authorities and sports/football media over the next wee while. It'll be interesting to watch and listen to the various reactions, excuses and degrees of flapping.

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Another great read there Frankie. It looks like there's going to be a lot of pressure put on the Scottish football authorities and sports/football media over the next wee while. It'll be interesting to watch and listen to the various reactions, excuses and degrees of flapping.


I think said pressure would be easier to apply if we had a strong club and leadership behind us.


We don't so as much as the fan-base seems united for the last day or two, I'm not sure the feel-good factor (for want of a better phrase) will last too long.

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Part one of an excellent article by paul McConville about SFA corporate governance and lack off. concerning CW takeover.


The SFA’s “Fit and Proper” Test – Self-Certification for Football Clubs – A Farce? Part 1 – Craig Whyte

Secretly recorded phone conversation between the SFA and the new Chairman of Dukla Pumpherston of the Scottish First Division:-


SFA - Is that Mr Hannibal Lecter? This is the SFA calling.


Lecter - Hold on, just finishing my dinner, these fava beans and chianti are delicious…how can I help you?


SFA - Just wanted to make sure you are a fit and proper person to take over Dukla.


Lecter - OK. What do you need from me?


SFA - Just sign the form to say that you are fit and proper and pop it in the post to us.


Lecter - And then you will meet to consider it?


SFA - No. As long as you tell us that you are fit and proper, then that’s you in!


Lecter - Thank you very much!


Call ends




And a quiz question too, which will be answered below – what do the following have in common – the unicorn, Pandora’s Box, Brigadoon, the SFA “fit and proper” test, Theseus and the Minotaur?




The issues of football governance at the forefront of media coverage just now, not just in Scotland but in England too, as well as worldwide.


The BBC recently reported, under the heading “Owners face increased scrutiny in football governance revamp”, that the English football authorities propose to put the suitability of prospective club owners and directors “under scrutiny by a new regulatory body set up to help improve football governance.” The FA Regulatory Authority will have, amongst other responsibilities, the duty to check if the “fit and proper” test is satisfied by English club directors. Government pressure has forced the FA to act.


This contrasts with the parlous state of football governance in Scotland as detailed below.


Craig Whyte


Craig Whyte has been declared not to be a “fit and proper” person to be a director of a Scottish football club by the SFA.


The investigation by the SFA started in October after the BBC Inside Story revelation that he was a former disqualified director. Matters were delayed as a result of the alleged lack of co-operation shown by Collyer Bristow, acting for Rangers and Mr Whyte.


After the club entered administration, a panel chaired by Lord Nimmo Smith was convened and reported to the SFA in the two-week period set for it to do so.


The decision followed the Special Board Meeting which considered Lord Nimmo Smith’s report highlighting “a number of other potential rule breaches by the club and its owner”.


As a result, Rangers have been charged with bringing the game into disrepute. As Stewart Regan of the SFA said:-


“Specifically, areas of potential breach to be considered by the Judicial Panel include:


· Obligations and duties of members


· Official return


· Financial records


· Division of receipts and payment of expenses (Scottish Cup).”


I think I will look into what the Judicial Panel can do at a later date. For now, it is interesting that the finding regarding Mr Whyte comes ten months after he took over at Ibrox, and almost five after the BBC revelation of his disqualification! I will return to issues about delay.


The “Fit and Proper” Person Rules


The rules regarding the “fit and proper” person test are contained in the SFA Articles of Association. They state at Article 10.2 :-


…The Board must be satisfied that any such person is fit and proper to hold such position within Association football. The Board hereby reserves its discretion as to whether or not such a person is fit and proper, as aforesaid, after due consideration of all relevant facts which the Board has in its possession and knowledge, including the undernoted list which is acknowledged to be illustrative and not exhaustive:-




(a) he is bankrupt or has made any arrangement or composition with his creditors generally;


(b) he is of unsound mind and has been or is to be admitted to hospital as suffering from a mental disorder following an application for admission for treatment under the Mental Health (Scotland) Act 1984 or Mental Health Act 1983 or a Court having jurisdiction in the United Kingdom or elsewhere has ordered in matters relating to mental disorder his detention or the appointment of a curator bonis or any other person to exercise power with regard to his property or affairs;


© he is under or is pending suspension imposed or confirmed by the Scottish FA;


(d) he is listed in the Official Return of another club in full membership or associate membership;


(e) he is currently participating as a player of another member club or referee in Association football;


(f) he is the subject of an endorsed Disclosure from Disclosure Scotland;


(g) he has been disqualified as a director pursuant to the Company Directors’ Disqualification Act 1986 within the previous five years;


(h) he has been convicted within the last 10 years of (i) an offence liable to imprisonment of two years or more, (ii) corruption or (iii) fraud;


(i) he has been suspended or expelled by a National Association from involvement on the administration of a club;


(j) he has been a director of a club in membership of any National Association within the 5-year period preceding such club having undergone an insolvency event;


(k) he is currently under or is pending suspension imposed by or confirmed by the Scottish FA in accordance with the Anti-Doping Charter.


This forms part of Article 10 which deals with the “Official Return” – the annual statement by which the clubs tell the SFA details of all office-bearers, directors and board of management of the club.


On the face of it, the “fit and proper” question is one for the SFA Board. As the rule states, “…the Board must be satisfied…”


Article 10.1 (b) states that each office-bearer etc must “personally confirm to the Scottish FA that he is a fit and proper person to hold such a position within Association football.”

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Part 2


Then what happens?


Nothing! The statement by the person that they are “fit and proper” is accepted by the SFA.


Mr Regan Spells It Out


Saturday’s Scotsman had a lengthy piece regarding this issue, where Mr Regan made it clear what the activities of the SFA were in connection with the “fit and proper” test.


I have quoted Mr Regan below together with my comments on what he is saying in bold beneath the relevant parts of the quotes.




“We need to understand this idea of a ‘fit and proper person test’. It’s a myth. There is no test. People don’t have to come in and pass an exam. What happens is that any change of director, any change of ownership or team manager, etcetera, etcetera, has to be notified to us on an official return. In doing that, there is a very clear statement, which is set out in our articles.


“It says that ‘each member club will procure that the relevant office bearer, secretary, director or member of the board of management will personally confirm to the Scottish FA, using the form prescribed by the board, that he has been furnished with a copy of the articles and having read, in particular, Article 10 and Article 13, the information supplied by him using the prescribed form is complete, true and accurate; and he is a fit and proper person to hold such position within Association Football’.


“Now, what that says is that we rely on our members, bearing in mind we are a members’ organisation, to say they have gone through all the contents of Article 10. For example, it talks about being bankrupt, being of unsound mind and treated under the Mental Health Act, pending suspension and so on.”


Here is the answer to the quiz question!


The fit and proper test is a myth! There is no test! It is interesting that, as far as I am aware, this statement was the first indication by the SFA that that was their position. At all the time when the investigations into Mr Whyte were ongoing, the SFA never made this point clear.


One wonders if perhaps clarity is forthcoming now because of hints of possible legal action by “interested parties” who claim to have lost out financially as a result of Mr Whyte’s alleged activities. After all, the argument goes, if the SFA is the regulator, and refuses to carry out that job, leading to losses, then ought it to bear moral and indeed legal responsibility?


Mr Lecter, in my whimsical example at the top of the page, or Colonel Gaddafi, or Saddam Hussein, or Bernie Madoff, or Dr Shipman, or any wrongdoer would therefore be treated by the SFA as a fit and proper person, as long as they were willing to lie on the form!


As the Articles stand, a person needs to satisfy the Board of the SFA that they are fit and proper. In reality this is achieved by filling in a form. That appears to be the Board abdicating responsibility.


Mr Regan states that they rely on the members of the SFA to police the matter. However, that is not what the Articles say. The responsibility for deciding that a person is fit and proper rests on the Board and has not, as far as I have seen, been formally delegated to the member clubs. Even then, is it reasonable to expect Dukla Pumpherston, now wholly owned by Mr Lecter, to “tip the wink” to the SFA that the infamous murderer and cannibal is not actually OK?


“The alternative to that is that we, as a Scottish FA, would have to employ a cast of thousands to research every potential takeover, every potential change of director, across the entire game. Bear in mind we don’t just govern the professional game, we govern the entire game of football in Scotland.


“We don’t have the resources or time to do that. We are not going to use Scottish football’s money to do that. We rely heavily on the clubs themselves.”


They would not need a “cast of thousands”. There are many bodies with regulatory responsibilities across Scotland who do not require huge ranks of people to check these matters. It would involve more staff undoubtedly, but the SFA could, for example, introduce a fee structure for new applicants to fund this. That could be variable, depending on the level if the organisation. An SPL club would pay more than a team in the bottom rung of the South of Scotland League, for example.


As I said above, if the SFA does not want the responsibility, it should change its Articles to make it clear that, in fact, it is each member club which must be satisfied about its own office bearers, not the Board of the SFA.


“In the case of a plc like Rangers, you have a board of directors who are selling a club to an individual. That board of directors would undergo due diligence and, because they are a plc, would have to go through a fairly stringent process of testing out who they are selling the club to.


“When you get confirmation that the person they have sold the club to has satisfied these criteria, then you have to take a certain amount of credence from what those directors are saying. That is what the Scottish FA have done.”


Mr Regan here shows an interesting view of the legal responsibilities of a board of directors. Let’s look at the Rangers case. Who decided to sell the club to Mr Whyte? Was it the Rangers plc board?


No, it wasn’t.


Instead the Board of Murray International Holdings decided to sell its 85% stake in Rangers plc to Mr Whyte’s company, Wavetower Ltd. Rangers plc’s board had nothing to do with that. The Board could not stop MIH selling the shares.


Because it is a plc, an Independent Board Committee was set up to consider the rights of the minority shareholders. That IBC expressed serious concerns, but on the basis that 85% of the shares were being sold for £1, the total value of the remaining 15% of the shares was about 20p! There was no value for the minority shareholders to lose. In any event the IBC could have triggered a requirement for Wavetower to offer to buy all the remaining shares, but at that value there was no reason to do so.


So, Rangers plc, a member of the SFA, had nothing to do with the decision to sell to Wavetower. That was decided by MIH, who are not members of the SFA.


What due diligence about the purchaser must a company do when it is being sold? None. As long as the seller is happy that the purchaser has the money to pay the price, then the sale goes through.


In any event, most members of the SFA are not plc’s. What investigations does Mr Regan think they should undertake before selling, or taking on a new office bearer?


Mr Regan says that the SFA has to take on a certain amount of credence from what the directors say. In Rangers’ case the IBC said, and I paraphrase, “DON’T DO IT – WE CAN’T SEE WHERE HE HAS THE MONEY TO DO THIS!!!!”


“When the individual has then told lies and hasn’t disclosed the disqualification that he was holding, then comes back and tries to argue that wording in Article 10 is misleading and he believes it was the point of disqualification that had to be disclosed, not the fact he was still disqualified, and uses smoke and mirrors to try and buy time, then it becomes very difficult to deal with the matter quickly.


The Articles are a legal and binding document. What matters is what they say, not what they are meant to say, if there is a difference. They are not a model of clarity in their drafting (which is being polite).


My reading of clause (g) is consistent with the approach taken by Mr Whyte. I read it as referring to the date of “sentence” passing, rather than whether the “sentence” is continuing. The interpretation of Article 10 will be a matter, ultimately, for the courts, whether through the legal system or the sporting courts.


The clause is ambiguous, at best, and I think it is unfair of Mr Regan to state that using a different interpretation o is using “smoke and mirrors”. He should make sure his organisation’s Articles say what he means them to say!


Mr Regan appears to have decided that Mr Whyte is a liar on this point. Whilst Mr Whyte could be criticised for various matters, following a valid legal interpretation of a question, even if it turns out to be an incorrect interpretation, is not lying.


“That’s why from October to February we were in dialogue with [Rangers secretary] Gary Withey from Collyer Bristow trying to get to the bottom of Whyte’s disqualification. In the meantime, there were clearly lots of other issues coming out under the table.


“To put the fit and proper issue to bed for a second, we have to say we rely heavily on a plc managing their own due diligence and the directors of that plc managing the transfer of ownership in the best interests of the club.


As I mentioned above, I think Mr Regan misunderstands the responsibilities of the directors of Rangers plc. In addition, how does his position fit with all of the clubs under the SFA umbrella who are private limited companies, or unincorporated associations?


“It is my understanding that for the four years or so the club was up for sale, the talk of acting in the best interests of Rangers was top of the agenda. I think that has to be taken into account.


Talk is cheap. Sir David Murray saying that he wanted to sell to a person acting in Rangers’ best interests creates no legal responsibilities.


Let’s say that the best offer for Rangers came from Joe Bloggs, a multi-millionaire property developer, whose intention was to pay MIH £100 million for 85% of the shares, run the team for a couple of years while going through the planning process, and then demolish Ibrox and Murray Park, turning them into luxury housing, hotel developments, and retail parks, and at the same time as the bulldozers move in, closing the club down completely.


The Board of MIH would be in dereliction of its duty to its shareholders to refuse that offer.


Mr Bloggs would be seen as a fit and proper person, even whilst declaring that, on buying the club, he was shutting it in two years. If the Rangers plc board objected to this as not being in the interests of Rangers plc, how would the SFA deal with this? Would they demand Mr Bloggs’ business plan and then decide not to let him run the club? How?


The statements about acting in the best interests of Rangers are meaningless in this case.


“It’s easy after the event to try and find a scapegoat, to say we should have done a fit and proper person test and that we should have prevented the takeover. I can’t see how we could have done that without having gone through a long, bureaucratic process on every single director.”


This issue shows that the matter of football governance in Scotland is seriously flawed. As I mentioned, the Articles place the responsibility for deciding if someone is fit and proper upon the Board of the SFA.


If the Board abdicates that responsibility informally, as it has done here, then it can be answerable for its failures.


If a member club can prove that it has lost out directly as a result of Mr Whyte being deemed a fit and proper person, when, as Mr Regan now says, he should never have been, then surely the SFA Board will be answerable for this failure?


Whilst not of course equating Mr Whyte with Dr Shipman, one of the issues raised in his horrible case was that the health authorities and regulatory bodies failed to heed the warnings, allowing him to continue his murderous activities. They by no means had the primary responsibility for what he did – he did, but he could have been stopped earlier.


Hindsight is always perfect. However, in the case of Mr Whyte, there were whistles being blown about him from before the takeover, although not in the mainstream press. Websites and blogs of various hues raised serious issues about his business record, and not all of these were motivated by anti-Rangers malice. Indeed, anyone so motivated would have been better saying nothing and waiting for the mess to get even worse!

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