Regarding the SFA “investigation” into Craig Whyte, revealed by the BBC, I have a few thoughts.
First of all, and as an aside, it is interesting that the SFA list of reasons not to be a “fit and proper” person is longer than the SPL list, although if the SFA declares someone to be unfit, this binds the SPL too.
As has been stated, the SFA list of factors to be considered is “illustrative and not exhaustive”. Thus factors other than those mentioned in the last can be taken into account, at the discretion of the SFA, as long as they do so fairly and reasonably. Therefore persistent non-payment of HMRC, for example, could be taken into account.
On the basis of “comparative justice” however, I am not aware of any other directors of football clubs in Scotland being disqualified for anything other than the specific reasons and therefore barring CW for tax issues, for example, would run into the problem that no one else has been.
In any event, the decision is at the “discretion” of the SFA. This was and remains the ace up CW’s sleeve as regards being in control of a newco. Despite the statement that having been a director of a club which fails within the last five years (I paraphrase) is on the list, I am sure that, if insolvency took place after the FTT decision, CW would have argued that he had bravely, but in vain, attempted to plug the holes in the sinking ship, but the damage caused by Captain Murray and his crew had been too great. And as a man who had thus lost some of his hard earned cash, surely the SFA would not punish him further by preventing him being at the helm of RFC 2012. (I have clearly inhaled too much sea air, as the nautical metaphors are coming at a rate of knots.)
As far as the “disqualified in the last 5 years” issue goes, as Adam had said, it is in these circumstances date of “conviction” which counts. I accept that there is a way to read it which indicates that not having had the ban end till a date within the last five years would fall foul, but I see no way that any court, for example, would uphold that interpretation should the SFA take action against him on the ground. If the SFA did, then CW and his lawyers would have a “stonewall” case against them.
It was asked earlier if that did not mean that a person serving a ban of over 5 years could run a football team whilst still banned. The answer is no, because such an individual would still be banned from being a director or shadow director. For example, with CW having been banned in 2000, he could not under SFA rules (and subject to the SFA’s discretion) been a “fit and proper person” until the relevant date in 2005. However, even if at that stage he was seen as a “fit and proper person” by the football authorities, he was still not permitted to be a director or shadow director till the ban expired in 2007. The day after the ban expired, the disqualification per se would not have been a bar to him being a fit and proper person although the SFA could consider the reasons for the ban and, if they were felt to be particularly reprehensible, decline to award “fit and proper” status. However, as we know CW was banned for 7 years over a mere technicality, this cannot apply to him.
It would technically be possible for a football team to be bought by an individual or a partnership, and not through a limited company. In those circumstances, an individual disqualified as a company director could still, during any such ban, run the club as sole owner or as a partner. The SFA might decide that the person was in those circumstances not a fit and proper person. However, as buying football clubs through anything other than a limited company is as out of fashion as the 2-3-5 formation, this is merely an academic point.
Is it possible that the SFA will decide to take action against Mr Whyte? Yes, it is possible. Will they? No. The embarrassment factor for the SFA caused by only now “seeing the light” bearing in mind how much has been publicised already would be huge. They cannot, unless some other bombshell is revealed, base any action on what is now known and as mentioned above, if no other directors have been declared not to be fit and proper for falling foul of Stock Exchange rules, then it won’t start with Mr Whyte.
Turning to company laws, there is speculation about Rangers AGM and the effect of the unaudited accounts. The rules are summarised here. A PLC must hold an AGM within 6 months of the business’ year end. A private limited company does not need to have an AGM at all. Unless Mr Whyte acts remarkably quickly, Rangers FC PLC will remain a public company till 31st December, being the last date for an AGM.
Section 336 (3) of the Companies Act 2006 states that failure to hold an AGM in time is an offence and the offence is committed by every officer of the company who is in default. The penalty on conviction is by way of a fine. Section 307A requires 21 days notice to be given of the meeting.
The Companies Act is also very interesting on duties of directors. It is failure to fulfil those which really get up the Insolvency Service’s nose!
172 Duty to promote the success of the company
(1) A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—
(a) the likely consequences of any decision in the long term,
(b) the interests of the company’s employees,
(c) the need to foster the company’s business relationships with suppliers, customers and others,
(d) the impact of the company’s operations on the community and the environment,
(e) the desirability of the company maintaining a reputation for high standards of business conduct, and
(f) the need to act fairly as between members of the company.
(2)Where or to the extent that the purposes of the company consist of or include purposes other than the benefit of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes.
(3)The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company.
Has Mr Whyte, in his stewardship of the club, fulfilled his duties to it, as opposed to his duty to himself or the Group? Has his tenure fostered “the company’s business relationships with suppliers, customers and others”? Has the company the company maintained “a reputation for high standards of business conduct”?
I think I can guess the answers to those questions!
Quick thoughts too re the SPL TV contract – there has been a lot of fuss about the so-called guarantee of four Old Firm games a year, with some suggesting this proves a deal is already in place. This is though a prosaic issue.
Old Firm games are most lucrative for Sky. If there are less than four, through relegation, the teams not being in the same half of the league at the split, or insolvency of one, the TV contract will not be void. There will be penalty clauses however reducing the price payable in such an event. Many have a low opinion of the SFA/SPL but they would not openly gerrymander the league in the feared way, or at least not do so in such a blatant way. The TV contract is not evidence of that.