On of the problems of a detailed post-blogpost argument in the comments is that some of the issues can get lost amongst the various threads. For that reason, I hope my reader does not mind me putting a fresh sheet into the typewriter and continuing the discussion on a blank page?
I am very grateful to all of the commenters, especially iain, Duplesis, The Black Knight, Kevinjohn and cavansam, amongst others, who kept the discussion going whilst I was otherwise engaged today.
Anyone who feels that we are flogging a dead horse is free to pass on by – I am sure the administrators will say something soon for comment!
Or indeed I might get to finish my post re the book about Mr Al-Megrahi.
However, for now, this is a follow up to yesterday’s post regarding the proposed match between Rangers Legends and AC Milan Glorie on 30th March.
The Story So Far
The excellent Rangers Charity Foundation (RCF) organised a match at Ibrox to raise money for RCF and the AC Milan Foundation.
It has now been stated by RCF that, in light of Rangers’ present predicament, the charity is going to waive the majority of its share of the proceeds for the game, allowing these to be retained by Rangers.
I pondered whether or not such a decision (a) was properly made by the Trustees who are legally responsible for the actions of the Charity and (b) whether such a decision by RCF could fall foul of charity law, as it appeared to be contrary to the object and purposes of RCF.
My purpose in doing so was not, as some suggested, because I have an axe to grind, or because I am a bigot, or “Rangers hater”, nor because I wish to “twist the knife”. It struck me, as I mentioned in my comment on the piece that, with all the upheaval at Ibrox it was possible that a well intentioned decision had been taken without anyone considering whether in fact it was one the charity could make.
Nor was this a case of my “mask slipping” and my “bitterness oozing out” as was suggested.
For the avoidance of doubt I was not calling for a write in campaign to the Office of the Scottish Charity Regulator. Indeed, as the match has not yet taken place, and is a month away, there is plenty of time for RCF to check the position, if it feels it needs to, and satisfy itself that its actions are proper. If this results in extra money for the charitable causes supported by RCF, and avoids any additional legal difficulties for the Chairman of the Trustees, Craig Whyte, then who could have a problem with that?
The defence advanced vigorously by, amongst others, iain and Duplesis was as stated below (and if I misrepresent their views I am sure they will correct me).
- If the match was organised by Rangers, and Rangers was giving a donation from the proceeds to the charity, then there was not a problem, as it was legitimate for a charity to decline a donation, or part thereof. This would allow Rangers to keep a larger share of the proceeds, and to do so legally.
- Rangers is entirely justified in keeping as much of the gate as it wants, whilst still doing good by giving some money to charity.
- Because of the intervention of administration, the administrators were entitled to change the basis on which the match was to take place.
- The administrators were also entitled to charge the charity extra for use of the ground and facilities to maximise income.
- No one had yet bought a ticket for the game, and therefore no one could be misled as to the nature of what they were paying for.
- The match remained a “charity match” but now more of the proceeds were going to Rangers, rather than RCF.
- In addition, if the support of RCF towards Rangers helped keep the Club afloat, then this would enable RCF to continue with Rangers’ support, thus securing the long term future of the charity.
Who Organised the Match?
The Rangers website has on it a piece dated 20th January 2012. This is titled “Clash of Giants”.
It starts off as follows:-
“A HOST of Rangers greats will entertain AC Milan Glorie in a glamour charity match at Ibrox on Friday 30 March.
The Rangers Charity Foundation and AC Milan Foundation are set to benefit from the match and a Legends Dinner at the Radisson Blu in Glasgow the previous night.
Rangers Charity Foundation has arranged two unique events that are sure to capture the imagination of the Light Blue legions as some of the finest players ever to feature for Rangers and Serie A giants AC Milan will pull on their boots once again for charity.” (Emphases added.)
And at the bottom of the same piece we see:-
“The Rangers Charity Foundation has organised this match in conjunction with Carl Dunn Sports Management Limited, who represent AC Milan Glorie within the UK.”
Therefore, RCF, at least according to Rangers, has organised the match.
EDIT – as referred to in the comments, RAngers FC has NOW taken over the running of the game.
If RCF Organised it, Maybe Rangers or the Administrators Have Taken It Over?
The latest mention of the game on the Rangers website states that Rangers Football Club has confirmed that the game will go ahead.
However I am unaware of any suggestion that the match had been cancelled, nor is it stated anywhere, as far as I have been able to see, that the administrators have decided to take over the organisation of the match.
Therefore, in the absence of evidence to the contrary, it would appear that the match is still organised by RCF.
Maybe The Administrators Have Increased The Costs to the Charity for Using Ibrox?
Very possibly, as shown by the fact that the tickets which were originally priced as follows:–
“Adult tickets cost £10 each, with concession / children’s tickets costing £5 each”
are now priced as below:-
“Tickets are priced £12 for adults, £8 for concessions and £6 for children”.
There is nothing wrong with that happening. In fact it would be wrong for the administrators to run a game at a loss for Rangers, as this would be a breach of duty towards its creditors. It would be legitimate to run an event which did not increase Rangers debt, even if it did not bring it down. A cost-neutral match would, I think, be entirely appropriate.
The administrators could not hike charges to an unrealistic level to bring more of the proceeds into their coffers, but that is not what is happening.
Ticket prices have gone up, and RCF is “foregoing” the larger part of its share.
A Quick Aside Re Web Pages
It is interesting that the RCF page which went up in January at the same time as the “Clash of Giants” piece referred to has been amended since last night when I wrote about it.
Yesterday it said:-
“But Gazza’s decision to pull on his boots again is a massive coup for the Rangers Charity Foundation and the AC Milan Foundation as both will benefit from the funds raised from the Legends game and dinner.”
Today it reads:-
“But Gazza’s decision to pull on his boots again is a massive coup for the Rangers Charity Foundation and the AC Milan Foundation along side Rangera(sic) Football Club as all will benefit from the funds raised from the Legends game and dinner.”
Someone did not properly proof read the change but spelling the name of the club wrong is just silly. (I apologise for any mistakes, of which I am sure there are many, on my blog, but I am only me, and I assume the RCF and Rangers have a larger team to deal with the website.)
NB click on the image to enlarge.
In addition that web page has been amended to reflect the new prices, rather than the original charges. However the “Clash of Giants” still lists the old prices.
So Where is RCF Going Wrong?
As Kevinjohn pointed out in answer to a comment by youngsy:-
“Your quote, that this is a “charitable act by the RCF” is both accurate and the issue. It is illegal for a charity that has a tax-relief status to give directly or indirectly to a limited company, which Rangers FC (in administration) is.
And please, before anyone suggests that Rangers FC (in administration) are running the event in question, and donating the money to the RCF (though donating a smaller percentage than previously planned) – they cannot do that. You see, Rangers FC (in administration) are prohibited from releasing funds to 3rd party companies that are not “secured creditors”, or “essential to the continued existence of the limited company” (see: Administration Act 1992 for reference).
1. If Rangers FC (in administration) run the event and donate raised money to the RCF, it is in breach of the administration laws.
2. If RCF run the event and donate money to Rangers FC (in administration), then it is in breach of the Charity regulations.”
Kevinjohn was rubbished for his reference to the “Administration Act 1992” by iain and Duplesis, who saw this as blowing Kevinjohn’s argument out of the water. As they pointed out, there is no “Administration Act 1992”. This seemed to detract from his reference to Rangers (in administration) being precluded from releasing funds to third parties where the third party was neither a secured creditor nor “essential to the continued existence of the limited company”.
I think though that Kevinjohn can be forgiven his lapse.
What he was in fact referring to was the Enterprise Act 2002, which amended the Insolvency Act 1986 by inserting Schedule B1, which deals with administration.
Paragraph 65 (3) of Schedule B1 states:-
“A payment may not be made by way of distribution under this paragraph to a creditor of the company who is neither secured nor preferential unless the court gives permission.”
That is what Kevinjohn was saying, despite the wrong statutory reference.
What Are The Alternatives?
There seem to be two, as outlined above and discussed below.
A – RCF Is Organising The Game
If RCF is organising this game, then the proceeds belong to it, subject to paying the costs of the facilities. It would be a breach of charity law for it to decide, effectively, to make a donation to a commercial enterprise, and as Mr Whyte is Chairman of both (though without power in Rangers just now) this would be a huge conflict of interest, against which Trustees if charities are warned regularly.
Neither can the administrators say that in fact the costs of staging the game are far higher than originally estimated and therefore RCF has to pay more to Rangers to cover costs.
RCF is quite clear that it is forgoing the majority of the proceeds due to it.
B – Rangers Is Running the Match
In this case, as the company is in administration, it cannot make charitable donations in the circumstances outlined as this would be contrary to paragraph 65 (3).
EDIT – it is subject to debate whether paragraph 66 would permit this as being “in the interests of the administration”. I still have serious doubts, but I am sure in the remaining time Rangers and RCF will ensure all is done properly.
Such a donation, whilst a “good thing” as far as the charity goes, would be prejudicial to the creditors, and as such the administrators could not do it – their first duty is to the generality of the creditors.
What Should RCF and Rangers Do?
Before anyone thinks I am big-headed enough to imagine that Rangers pay any attention to what I write (and I can’t imagine they do) I think it only fair to those who were good enough to comment that I suggest how the matter should be resolved.
I think all the contributors agree that it would be better that the game go ahead than not, for the sake of the charities.
Accordingly RCF should receive the proportion of the proceeds already pledged to it.
Rangers ought not to be left a penny out of pocket for staging the game, and indeed could ask to be paid a commercial rate for the match being held there.
However, it might now be seen that any effort to announce that was the position would be scuppered by the statements referred to yesterday and above.
I suspect that, if matters proceed as suggested by RCF and Rangers now, that the OSCR or alternatively the Insolvency Service would be all over RCF and/or Rangers and its administrators respectively.
Let’s see what happens, and also let’s see if, for the sake of avoiding confusion, the “Clash of Giants” page gets a makeover to record the changed plans.