SDM Hits Out At King

[craig 5,195]

Someone on FF (IIRC) said that companies as big as Rangers can be late in paying taxes for up to half a year before HMRC starts to act upon them. Whether true or not, it could explain why the bubble burst in January/February and not earlier.

 

It is true, and, in fact, can be longer than 6 months. From experience with an ex-client, I know this to be the case.

[Zappa 0]

Under no circumstance is it the responsibility of an organization's bankers to inform HMRC of non-payment of taxes. That is a ludicrous notion.

 

That's not what I was suggesting though. What I'm saying is that LBG probably knew Rangers wasn't paying it's taxes, while HMRC and certain staff at Rangers will definitely have known and yet non-payment of taxes was allowed to go on for 9 months racking up a £14m tax bill.

[craig 5,195]

They knew where it was going so they allowed Whyte to take over ????

The actions of both LBG & HMRC need thoroughly investigated throughout all of this.

LBG effectively forced oldco out of business by forcing sale to Whyte.

Whyte,already owing HMRC £4m prior to ownwership, gets allowed to take over and build up even more tax arrears.

Then there's the EBT tax bill, so flawed in didnt even stand up to their own internal appeals.

You couldnt make some of this up..............

 

Regarding the EBT case you really just refuse to listen or accept reason Rab - it is tiresome. HMRC may have lost the case but that doesn't mean they weren't entitled to chase for it - in fact, they got a very small win on a documentation point. That alone tells you they were well within their right to chase it. They followed proper procedure and their own protocols in the chasing of the tax case. They had, successfully, reached agreement with other clubs such as Arsenal and Chelsea on the exact same thing. The only question that really should be asked is why they didn't accept SDM's offer to settle.

 

But their process being flawed ? Nope, definitely not. Just because you don't win doesn't mean the process isn't flawed.

 

Where is the evidence that LBG forced the sale to Whyte ? Genuine question because I see all of this "they were going to pull funding to MIH if he didn't sell us" etc - but do we have quotes surrounding that ? Not disputing it but genuinely cant recall seeing anyone involved make those remarks.

[craig 5,195]

That's not what I was suggesting though. What I'm saying is that LBG probably knew Rangers wasn't paying it's taxes, while HMRC and certain staff at Rangers will definitely have known and yet non-payment of taxes was allowed to go on for 9 months racking up a £14m tax bill.

 

Regarding employees... it is difficult to be a whistle blower, depending on the proper governance you have in place. eg, my company have a whistle-blowers hotline, you can also call our external legal counsel and our audit committee chairman - so plenty of options. Rangers ? Guaranteed you would be asked to whistle blow to the top person.... who was the very person you would be whistle blowing about. You couldn't go to the Police as it wouldn't have been a criminal matter. So where else do you go ?

 

As for LBG - they have no obligation, nor right, to inform anyone of a client's business dealings unless criminal, which they wouldn't have been at the time. And I doubt they paid that much attention to our accounts - so long as we had cash in the bank or within our overdraft I suspect they wouldn't care.

 

HMRC - should they have come forward sooner ? Probably. But, again, it is also plausible that they just didn't look into our account too heavily. I don't know how they operate but I would like to think that they do a tax variance analysis on their accounts - and if they see a wild variance, and/or non-payment, that they would highlight it to the organization. Do we know for sure HMRC didn't do this ? Do we know that they didn't speak to Whyte and he gave them assurances it would be cleared before the end of the tax year ? I genuinely don't know.

[der Berliner 3,245]

Did Whyte not have a fall-out with HMRC before he dealt with us? It is probably true that they could have looked closer at him, but I would assume that no-one could or can prove that they did not go according to their own guidelines. All the more sweeter ... for any Yahoo in their ranks, if any.

[craig 5,195]

The question on HMRC and Whyte's liabilities before taking us over seems like a red herring to me.

 

Nobody would have, nor would they have an obligation to, get HMRC's approval on Whyte owning us.

 

However, it could be and probably was, a very simple process for SDM and his advisors to obtain confirmation from Companies House that Whyte was banned from being a director (although they may have needed Whyte to obtain that confirmation himself). Whilst that in itself wouldn't ban him from owning the Club it could and should have opened up more questions and proper due diligence from SDM.

 

For someone who was so astute as a businessman it is tough to accept that SDM didn't carry out proper due diligence on the proposed sale of probably his highest profile business. Or..... he just wanted shot of us....

[der Berliner 3,245]

It would be good to know who did this whole sale process, i.e. whether it was SDM himself, one of his associates et al, or someone at the behest of LGB. Not that it would remove any blame from either party.

[RANGERRAB 3,258]

Regarding the EBT case you really just refuse to listen or accept reason Rab - it is tiresome. HMRC may have lost the case but that doesn't mean they weren't entitled to chase for it - in fact, they got a very small win on a documentation point. That alone tells you they were well within their right to chase it. They followed proper procedure and their own protocols in the chasing of the tax case. They had, successfully, reached agreement with other clubs such as Arsenal and Chelsea on the exact same thing. The only question that really should be asked is why they didn't accept SDM's offer to settle.

 

But their process being flawed ? Nope, definitely not. Just because you don't win doesn't mean the process isn't flawed.

 

Where is the evidence that LBG forced the sale to Whyte ? Genuine question because I see all of this "they were going to pull funding to MIH if he didn't sell us" etc - but do we have quotes surrounding that ? Not disputing it but genuinely cant recall seeing anyone involved make those remarks.

 

Craig - what reason is it I refuse to accept about HMRC's case? Let me explain

EBT's were perfectly legal tax avoidance if run properly and the one(or ones) used by Rangers have been proven to be just that. do you accept that? Thousands of UK companies had them until they ended in 2010.

Do you think HMRC were entitled to chase eye-watering figures quoted like £75m based on a 'documentation point' as you say? A figure which would put many companies out of business. As you say they've only won a 'small win' based on a 'documentation point' which gave them no justification in pursuing the sums quoted IMO.

Then there's the question why Arsenal and others were allowed to settle and Rangers weren't. I believe someone, somewhere was influencing these decisions who had an interest in damaging Rangers.I believe many of us have views on who that individual was and how his party have slumped in the polls in Scotland may not be entirely unconnected.

As for LBG I cannot accept they are blameless either. We need an answer as to whether they forced the sale to Whyte or not. And did they threaten to withdraw all bank credit to MIH if the sale didn't go ahead? If so why? What was their reasoning behind that? And did Whyte get all overdraft facilities withdrawn when he took over?

Not exactly the actions of a bank supporting a business is it? Especially Rangers whose bank debt had almost halved in the two years prior to the sale to Whyte.

If you don't accept my viewpoint then start reading some of things AJ was quoted as saying around the time of the sale to Whyte. PM too. You'll find I think they very much had suspicions regards a number of individuals at the time.And they were both proved absolutely correct IMO.

[Zappa 0]

Regarding employees... it is difficult to be a whistle blower, depending on the proper governance you have in place. eg, my company have a whistle-blowers hotline, you can also call our external legal counsel and our audit committee chairman - so plenty of options. Rangers ? Guaranteed you would be asked to whistle blow to the top person.... who was the very person you would be whistle blowing about. You couldn't go to the Police as it wouldn't have been a criminal matter. So where else do you go ?

 

As for LBG - they have no obligation, nor right, to inform anyone of a client's business dealings unless criminal, which they wouldn't have been at the time. And I doubt they paid that much attention to our accounts - so long as we had cash in the bank or within our overdraft I suspect they wouldn't care.

 

HMRC - should they have come forward sooner ? Probably. But, again, it is also plausible that they just didn't look into our account too heavily. I don't know how they operate but I would like to think that they do a tax variance analysis on their accounts - and if they see a wild variance, and/or non-payment, that they would highlight it to the organization. Do we know for sure HMRC didn't do this ? Do we know that they didn't speak to Whyte and he gave them assurances it would be cleared before the end of the tax year ? I genuinely don't know.

 

There's some very good points and interesting questions there and as I said previously, there's lots of questions, but very few definitive answers.

 

Regarding your final question in bold: I find it virtually impossible to believe that Whyte or any employee who knew about the non-payment of taxes at Rangers (of whom there were possibly many!) believed that a massive tax bill could be run up and then somehow cleared before the end of the tax year.

 

Since we went into administration in February 2012 I've seen it mentioned many times that Whyte was probably depending on us reaching the CL group stages and getting the lucrative cash pot that comes with doing so. The fact of the matter though is that even if we had done so, the vast majority of the CL cash wouldn't have been paid to the Club until after the end of the season, so into the summer of 2012.

 

So without a CL cash windfall, how else could Whyte have paid off a massive tax bill? Selling players? Whyte had just allowed some of our best players to be given bumper new deals, so their transfer market values were technically at a premium. Several of our players could possibly have fetched some pretty serious fees, but there's a big problem with that train of thought too. Not only had we been struggling to sell players for good fees for several years, but the buying Clubs in the transfer market were normally only looking to pay a fraction of the total fee up front, with the rest of the deal being paid in installments over several years.

 

None of that is to say that Whyte wasn't contacted by HMRC and simply fobbed them off with a pack of lies, but any senior Rangers staff who knew that taxes weren't being paid and that a massive tax bill was rapidly growing should have known that Whyte was almost certainly driving the Club straight towards insolvency.

 

So what should any staff at the Club who knew what was happening have done about it? Well, someone alerted senior Scottish football reporters at the Record about it. Who was that? If it was someone within Ibrox, then it raises further questions about how many Club staff knew what was going on. Do we really believe that all of the senior Club staff other than the Financial controller knew nothing about any of it because Whyte had told him to keep his mouth shut? Where's my banana boat? My guess is that a fairly large number of people within the Club will have known despite saying that they didn't.

[lenzEK 0]

The question on HMRC and Whyte's liabilities before taking us over seems like a red herring to me.

 

Nobody would have, nor would they have an obligation to, get HMRC's approval on Whyte owning us.

 

However, it could be and probably was, a very simple process for SDM and his advisors to obtain confirmation from Companies House that Whyte was banned from being a director (although they may have needed Whyte to obtain that confirmation himself). Whilst that in itself wouldn't ban him from owning the Club it could and should have opened up more questions and proper due diligence from SDM.

 

For someone who was so astute as a businessman it is tough to accept that SDM didn't carry out proper due diligence on the proposed sale of probably his highest profile business. Or..... he just wanted shot of us....

 

I agree there may not be any requirement for HMRC approval but surely if they were already well aware of Whyte's track record and were actively pursuing him then it seems incredible that they would allow him to go so long without paying tax once he took control of us? You would have thought they would have been all over him like a rash?