The SFA’s “Fit and Proper” Test – A Farce? Part 2 – Dave King and Paul Murray – Bad News for the Blue Knights?

You can see Part 1 of this piece here.

What about Dave King?

According to the Scotsman article referred to by me in Part 1 (and I commend the full piece to readers) :-

“During a breakfast briefing with daily newspaper correspondents, it also emerged that Rangers director Dave King will not be permitted by the SFA to be an official at the Ibrox club post-administration as he was still serving on the board when they entered their current insolvency event under Whyte.“

This is an interesting one too. There is no note on the SFA website of this decision about Mr King. Mr King remains listed by Companies House as a director. Even though the publicity was that he had been dismissed by Mr Whyte on the Friday before administration.

But the Articles do not mention being a director at the time of an Insolvency Event as being a bar. Instead it is being a director within 5 years prior to a member club undergoing an insolvency event. Indeed, this means that a director of a team which had had an insolvency event in, for example 1980, and who had resigned as a director in 1976, would still fall foul of the Articles. There is no limit on how far back the restriction goes – as long as you were a director within the five years prior to an insolvency event at a club, then you are potentially persona non grata. I will come back to this point below.

Mr King might wonder why he has not been afforded the same due process given to Mr Whyte.

He might also wonder why Andrew Ellis is not mentioned either. After all, if the position of the SFA is that being a director at the time of an insolvency event triggers a ban, then why not mention Mr Ellis, or indeed Gary Withey?

As I say, in any event, the Article does not say what is being reported here.

Mr King has been a director of Rangers for over 10 years. He is accused, but denies, criminal tax fraud and evasion on a huge scale in South Africa. The linked article describes in detail the allegations against him, and the findings by a South African court.

Mr King was described as follows by the judge:-

The court had seen King testify for four days and “are unanimous in finding that he is a mendacious witness whose evidence should not be accepted on any issue unless it is supported by documents and other objective evidence”.

“It was remarkable that King showed no sign of embarrassment or any emotion when he conceded that he had lied to the (Sars) commissioner in a number of his income tax returns. In our assessment, he is a glib and shameless liar.”

To be fair to the SFA, this was only published in February 2011, and the tax issues were only known about since around 2001.

As the newspapers report continues:-

“In 2001, Sars levied a tax assessment against King for R912.8 million (£77 million), which has not yet been finalised. The High Court in Pretoria heard in 2002 that King’s income tax returns for the years 1990 to 2001 reflected a modest annual income of R60 000 (£5,000) and King had then asked to be deregistered as a taxpayer.

Sars launched an investigation into King’s affairs in May 2000 when it became aware that he had bought an Irma Stern painting for R1.76m (£148,000) and could not reconcile this purchase with his declared gross income of R60 000.”

The final determined tax assessment for Mr King and his companies totals R2.7 billion (£228 million)!

Yet for all this information, and the finding by a court that Mr King ADMITTED to lying in his tax returns (which one assumes is a crime in South Africa as it is here), and the finding that Mr King is a mendacious witness and a glib and shameless liar (which one assumes could constitute perjury), the first indication by the SFA that they are concerned about Mr King comes in a chat with journalists over breakfast, regarding him being on the Board of Rangers when the music stopped!

As Mr Regan says in the part of the Scotsman article in quoted in my previous piece – “The fit and proper person test is a myth. There is no test!”

Mr King’s continued role on the Rangers’ board for over ten years is proof of that.

However Mr Regan’s breakfast comments might help Mr King, because he can argue that he has not had due process, nor proper notification of a decision. If no formal decision has yet been made, then Mr Regan has jumped the gun, and could have caused his organisation as much trouble as Mr Whyte did for Rangers in unguarded and premature comments to journalists about Martin Bain!

Which Former Directors of Rangers plc might be Disqualified as not “Fit and Proper”?

Every director and office bearer of Rangers going back to the 15th February 2007 falls foul of the 5-year pre-insolvency rule.

That list is as follows:-

Craig Whyte

Dave King

Andrew Ellis

Gary Withey

Phil Betts

John Greig

John McClelland

Martin Bain

Donald McIntyre

Alastair Johnston

Paul Murray !!!!!!!!!

Donald Muir

Michael McGill

James Wilson

Sir David Murray

Quite how is Mr Murray, who is at the head of the “Blue Knights” going to get round this issue?

Mr Regan has made it clear – all he needs to do is to fill in the form and say that he is a fit and proper person! The problem is solved!

Conclusions

The SFA fit and proper person test is a farce. As I joked previously Hannibal Lecter gets in as long as he is prepared to lie on the form, or to indulge in “smoke and mirrors” tactics re interpretation of the rules.

Whilst the English FA is setting up a body to deal with this, the SFA refuses to do so, as it would involve a “cast of thousands”.

Maybe Mr Regan could ring his colleagues at the FA and ask them how they plan to do it, or even read the documents published by the FA?

If Mr Regan feels that the matter is one where the Articles are not fit for purpose, as was pointed out by the late Paul McBride QC last year in connection with the Neil Lennon suspension saga, then they should be changed.

As it stands the Articles regarding the fit and proper test (which does not exist!) do not reflect either what happens in reality, or what Mr Regan thinks should happen. Therefore they must be changed.

The Rangers mess is extending through all areas of Scottish football. It might allow the fundamental reforms needed to prevent a recurrence in the future, or, on a more modest level, to allow the SFA to do what it is required to do!

 

Posted by Paul McConville

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13 Comments

Filed under Football, SFA

13 responses to “The SFA’s “Fit and Proper” Test – A Farce? Part 2 – Dave King and Paul Murray – Bad News for the Blue Knights?

  1. Paul Murray and his earlier attempts at taking money out of Rangers.

    http://www.scribd.com/doc/84919997/Paul-Murray

    followed by the same old story repeated for at least the 3rd time since 2009. Familiar cry of war chests, front loading and appearing to be committed to less that a quid himself.

    Out of interest re the accounts listed for Rangers Youth Development, does anyone know why there’s a charge over a property which seems to be related to John Fleck. I can see no other properties, which I suppose could have been used as accommodation for the youth squad.

  2. Pingback: The SFA's “Fit and Proper” Test – A Farce? Part 2 – Dave King and …

  3. BillyBhoy68
    March 11, 2012 at 4:17 pm

    The whole Rangers Youth Development business was just another artificial way to boost Rangers accounts. The basis being that if a player is brought through the youth ranks in the traditional manner they have no value in the accounts as their true worth can never be known, a good example would be Ryan Giggs, in his whole career at Man Utd, he would never have added to the squad value for accountancy purposes.

    So by ‘buying’ their youth players that made it to the 1st team Rangers squad value (and therefore asset value) in the accounts increased.

    The RFC had a commitment to fully fund RYD, so if it didn’t sell any players in a season it’s costs were met. If it did profits could have been funnelled back to the parent company I suppose, but I’m not sure it ever did.

    While I have no evidence to suggest it ever happened it would also have allowed RYD to inflate prices for player sales to RFC (and thus boost their squad value, again perhaps unrealistically) eg John Fleck could have been valued at £500k when he was ‘sold’, whereas a move to any other club might have been for say £350k. And of course Rangers ‘pay’ £500k, and that means RYD request £500k less for their running costs the next season. No real cost to RFC at all.

    Clear as mud.

    • dirtymac

      Home-grown player values are booked at their remaining contract values (or amortised buyout clauses if they exist) are they not?

      Anyone?

  4. Jim

    Speaking of ‘fit and proper’ people I was watching the fim ‘Game Change’ last night. This is a depiction of the unsuccessful McCain/Palin presidential campaign and the failed vetting procedure that apparently took place.

    During one of the preparatory sessions for a Vice-Presidential debate Sarah Palin is seen wearing a blue sweatshirt with ‘Rangers’ emblazoned across it. Was I in some parallel universe?

    Whilst this is of course the New York version of the ‘blues’ it struck me as being hugely co-incidental bearing in mind Ms Palin’s less than stellar intellect/veracity……and thus suitability as a ‘fit and proper’ person to enter the White House.

    ‘Burds of a feather…’ as dear Frank McAvennie might put it! 🙂

  5. Jim Harkins

    In these postings you have done a service in highlighting the fact that Whyte didn’t buy the “persona giuridica” Rangers plc, he bought the Murray family and MIH shares in the company. This surely means that the board members of Rangers plc had no responsibility to check out the purchaser and the sellers’ “responsibilities” were limited to checking that the purchaser could pay £1. As someone has pointed out on another thread, it is difficult to identify , or enforce, the focus of “due diligence” carried out by the seller.
    Turning to the SFA, I think you are harsh on Regan; in my opinion he has made a good fist of defending an illogical position. Since this type of problem will tend to involve a toxic mix of money-earned-in-legal-grey-areas, ego and nympholitigants, the last thing he could do would be to ban someone on the basis of blogs or terracing gossip.
    I don’t know how the SFA is organised but I suspect that, after the technical and support staff are taken out, his is a lonely position, with only a co-opted Board as a source of moral and intellectual support for strategic decisions. And, as with the Rangers Board, these guys can be expected to believe that wearing the blazer and tie is the limit of their responsibilities.

  6. ifa007

    Just released…………
    Statement re legal action by pension fund trustees to recover funds from the Administrators of Glasgow Rangers Football Club.

    http://www.investegate.co.uk//Article.aspx?id=201203120700261133Z

  7. ML

    Under the Companies Directors Disqualification Act 1986, the administrators that take over a failing business must file a report to the Court on the actions of the previous directors of the failing business… the Court must look at all actions of previous directors and determine amongst other things, whether or not they did everything possible to protect creditors, and did they pay all tax to the Revenue Service. Wouldn’t it just be typical if SFA viewed Paul Murray as a “fit and proper person” but the Court DQ’ed him from acting as such?

  8. dirtymac

    ‘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’

    That is incredibly ambiguous. Is it meaning you cannot have been a director within the 5 year period? If so, then surely if Rangers are liquidated, the rule is so poorly formed, it could be easily argued that they are not a ‘club in membership of any National Association’ ergo the 5 year rule does not apply.

    Or does the 5 year rule apply on both the basis of the club being in membership at the time of the insolvency event and the directorship?

  9. Thekwizatshaderach

    Does anyone think it is inevitable that UEFA step in and get this mess sorted out? its farcical at the moment , you would almost think that the “institution” is backed by the SFA, the way its been going about its business for say the past 140 years!

  10. Pingback: South Africa’s Tax Authorities v Dave King – Now In the High Court in London | Random Thoughts Re Scots Law by Paul McConville

  11. Paul what is your view regarding Mr. King, the SFA, SFPL, Rangers and the ‘fit and proper person’ rule now.

    He has been to court and accepted a plea sentencing (fine) for an act that has a potential 24 month jail sentence.

    The SFA rules you quoted (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;

    The SFA stated previously during a breakfast briefing with daily newspaper correspondents; “that Rangers director Dave King will not be permitted by the SFA to be an official at the Ibrox club post-administration as he was still serving on the board when they entered their current insolvency event under Whyte.

    Why has the media not raised questions or asked the SPFL or SFA to comments on the anomalies given recent events?

  12. I should add that the court was in SA but I am sure you are aware of that,

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