Rangers’ Board In No-Win Situation With the Green/Whyte Investigation

When Rangers announced its own investigation into issues about Messrs Whyte, Green and Ahmad, it was suggested that it would be carried out as quickly as possible.

A few days after the announcement, Pinsent Masons were appointed to do the legal part of the investigation and Deloittes to look into the financial aspects.

There was talk of a verbal report being issued to the directors by last week with a full report for them to follow imminently.

Yesterday Rangers announced the appointment of Roy Martin QC to “oversee” the investigation. That suggests that the report might take longer to appear than would first have been thought. Presumably Pinsent Masons have advised that a QC should be brought in?

Mr Martin is one of the top lawyers in Scotland, whose ability, expertise and probity are beyond question. It was wrong of people to speculate that Pinsent Masons and Deloittes were brought in to do a whitewash, or should that be a Whytewash.

Having Mr Martin oversee the process is an additional guarantee for the sceptics that the investigation will be full and fair.

Of course, as with Lord Nimmo Smith, some who praise his independence prior to the outcome might change their mind after he reports, but that won’t be a stance I would take.

As an aside the Hutton and Leveson inquiries have both shown how the judges appointed to oversee important investigations are praised to the heights by the media, and then, when a verdict they don’t like is forthcoming, are lambasted as “establishment lick-spittles”.

The biggest problem for RIFC and its non-executive directors comes frankly from its status as a PLC.

There are duties to shareholders and to the market to make full disclosures. This does not apply to anywhere near the same extent in a private limited company. In that case it woiuld be far easier to keep any unpalatable findings quiet.

So when the report is delivered, that will be “job done” by Mr Martin, Pinsent Masons and Deloittes. None of them would have any authority to publish the report of their own volition. They owe no wider duty than to the directors. It is the directors who have to make the call.

If the report clears everyone of wrongdoing, then some will call it a whitewash.

If the report does so, then one would wonder why Messrs Green and Ahmad had to go! If they have gone, or are going, then why continue with the inquiry?

Officially they remain directors of certain Rangers companies – might their formal departures be delayed till the report clears them, if it does, so they can come back? Stranger things have happened!

If the report does find wrongdoing (and I am not suggesting it will) then the Board have a very serious problem. Releasing the full report would undoubtedly be a foolish step, on the basis that there are threats of litigation from Mr Whyte or his associates. There may well be issues of privacy, confidentiality and defamation arising from the report. After all, the report is not privileged, and someone who considered themselves to be defamed by it could sue for damages.

(If the report was prepared in contemplation of court proceedings then there is an argument that there would be some protection under the law of privilege, but that is not what the public announcements have said it is for).

Imagine the report damns former and present Rangers personnel.

Imagine too that, in a worst case scenario, it decided that in fact true ownership of all of the assets ought to be with Sevco 5088 (I am not saying that that is the position, or that is what they will find – I am simply hypothesising).

The Board would know that releasing the report, or even its conclusions, could effectively be declaring the company worthless, or at least setting it up for a long, expensive and possibly fatal court case or series of them.

In addition it might reveal that there were irregularities with the process by which Rangers re-emerged into Scottish football.

But if the report reaches those, or even less damaging conclusions, there has to be some publication of the result. If not, then it will become as much of a Holy Grail as the 5-way agreement!

And the failure to produce the report or at least its conclusions will lead people to believe it says the worst.

Now, as court lawyers would tell you, one should never ask a question unless you already know the answer, and as Sir Humphrey Appleby would have said in “Yes Minister” only set up an inquiry when you know what the conclusions are going to be before it starts.

So it is unlikely that any “smoking gun” will be found which would sink the company but if it did, then the Board would find themselves in a terribly difficult position.

Of course, in that event, their duties to the shareholders would prevail over their love for the football club which is owned by the company which is owned by the PLC on whose Board they sit.

I wonder if Rangers will issue a statement saying when they expect to receive the report – after all, it might help cut down on some of the speculation. (No, it won’t!)

We must, as we have said so often in this saga, await the next exciting/dramatic developments!

Posted by Paul McConville