A blog post in which I detail what Rangers were “convicted” of; what this means for them as regards liquidation and history; what the appeal process is, and why I think both Mr Whyte and Rangers would succeed, at least partially, on appeal.
Rangers faced the following charges, with outcomes noted below. All charges covered the period from 6th May 2011 to 6th March 2012.
Rule 1 – All members shall: (b) be subject to and comply with the Articles and any statutes, regulations, directives, codes, decisions and International Match Calendar promulgated by the Board, the Professional Game Board, the Non Professional Game Board, the Judicial Panel, a Committee or sub-committee, FIFA, UEFA or the Court of Arbitration for Sport;
The Tribunal returned a verdict of Not Proven in respect of Rule 1.
Rule 2 – Each member shall procure that its officials, its Team Staff and its players act in accordance with Rule 1.
The Tribunal found Rangers FC guilty in respect of Rule 2 and imposed the maximum fine of £10,000 payable within 12 months.
Rule 14 – Full membership or associate membership may be suspended or terminated, or a fine may be issued, in any of the following circumstances:- (g) where a full member or an associate member suffers or is subject to an insolvency event.
The Tribunal found Rangers FC guilty in respect of Rule 14 and imposed the maximum fine of £50,000 payable within 12 months
Rule 66 – No recognised football body, club, official, Team Official or other member of Team Staff, player, referee, or other person under the jurisdiction of the Scottish FA shall bring the game into disrepute.
The Tribunal found Rangers FC guilty in respect of Rule 66 and imposed the maximum fine of £100,000 payable within 12 months. In addition, the Tribunal imposed a prohibition in terms of Article 94.1 and 95 of the Articles of Association, prohibiting Rangers FC for a period of 12 months from the date of determination from seeking registration with the Scottish FA of any player not currently with the club, excluding any player under the age of 18 years.
Rule 71 – A recognised football body, club, official, Team Official, other member of Team Staff, player or other person under the jurisdiction of the Scottish FA shall, at all times, act in the best interests of Association Football and shall not act in any manner which is improper.
The Tribunal found Rangers FC guilty in respect of Rule 71 and imposed a censure.
Rule 325 – Failing to pay to [Dundee United FC] on the day of the match monies due under Rule 46 c (3) and e of the Scottish FA Cup Competition Rules; being [Dundee United’s] share of receipts for the match; and by failing to pay to the Scottish FA within three days monies due under Rule 46 c (1) of the Scottish FA’s Cup Competition Rules; being the Scottish FA’s levy on admission charges for the above match.
The Tribunal found Rangers FC guilty of two breaches in respect of Rule 325 and imposed further censure.
What Does That All Mean?
The charge, effectively, of failing to comply with the rules was found not proven.
However, Rangers were found guilty of failing, under Rule 2, to have its officials (Mr Whyte one assumes) follow the rules.
This does seem to be a partial recognition that Mr Whyte did not equal Rangers, at least in all matters. After all, if the Chairman breaks the rules in his capacity as chairman, then presumably that is the member club doing so, unless the Chairman was off on a “frolic of his own”. However, in that case, it would not be the club’s fault.
The Top End penalty for a breach of Rule 2 is a £5,000 fine. The maximum is a £10,000 fine and a suspension of the member club for up to one year.
The Judicial Panel have therefore assessed this as more serious than “Top End” but less than the maximum. That suggests they viewed Mr Whyte as speaking and acting for the club, in which case how is the charge under Rule 1 not proven.
Subject to the full reasoning, this seems inconsistent.
As far as the Rule 14 Insolvency charge goes, the maximum penalty is a £50,000 fine and termination of membership. The fact that the penalty applied, in financial terms, is the maximum, and that indeed there are variations in punishment levels, suggests that the Panel viewed this insolvency as a most culpable one. Bearing in mind the stated reason was non-payment of PAYE and VAT, that does not seem unreasonable.
The Rule 66 disrepute charge is most contentious. As I mentioned in the piece about Mr Whyte, the tide has turned against such “catch all” offences as “bringing the game into disrepute” or “breach of the peace”. The principles of the European Convention on Human Rights require fairness, openness and transparency. People need to know if what they are about to do is wrong. That does not apply here.
In what way have Rangers brought the game into disrepute in this case? Non payment of tax – insolvency – non payment of other teams – failure to control its Chairman?
If the finding is that Rangers have brought the game into disrepute, then it will be interesting to see how the analysis of that ties in with the not proven finding under Rule 1, and the guilty verdict under Rule 2.
The penalty could have been a £100,000 fine and termination of membership. The Top End penalty is a £10,000 fine. There is a huge gap from “Top End” to maximum.
A transfer embargo seems to suggest that non payment of other clubs might be at the root of that issue.
Under Rule 71, improper behaviour, a censure was imposed. The maximum penalty is the same as for disrepute, namely a £100,000 fine and termination. The improper behaviour was presumably that of Rangers and therefore, again, the way in which the Panel attributed his conduct to the club will be interesting.
Under Rule 325 (non payment of Dundee Utd for the Cup tie) the maximum penalty is a fine equivalent to loss of payment for the round plus £20,000, ejection from the Cup and expulsion from it for the following season. Even the Low End penalty envisages a fine. How then, for two breaches, does a censure suffice?
Perhaps we are seeing what sometimes happen in criminal courts – when a person is convicted of murder, they won’t receive a significant sentence for the associated theft, for example. The penalty comes for the major offence.
What Effect Will the Penalties Have?
The fines are almost irrelevant. They are not at a crippling level. If Rangers does not pay, the SFA can deduct the fine from any money due from the SFA to the club.
The transfer embargo is much more serious – “prohibition in terms of Article 94.1 and 95 of the Articles of Association, prohibiting Rangers FC for a period of 12 months from the date of determination from seeking registration with the Scottish FA of any player not currently with the club, excluding any player under the age of 18 years.”
The only players who can be signed will be under 18s. Bearing in mind the expectation that, if oldco remains in existence, top players will leave, this could leave Rangers hamstrung. It would be ironic if Murray Park was forced to prove its worth in such stark circumstances.
More importantly, subject to ay appeals, the penalties render saving of the oldco even less sensible than it was before. Why buy a club under these restrictions, when one could buy the assets and move them to a newco?
Despite speculation last night, a newco could not simply have the punishment carried over to it.
Instead, the SFA and SPL could make acceptance of the penalties by the newco a condition for admission.
If they tried that, I suspect newco’s lawyers would be all over that.
However, this resolves the history question, I think.
If newco Rangers refuses to accept the penalty applied to oldco, then how can it claim entitlement to the history? To have a chance of retaining the history, a newco would have to accept the oldco penalty. As this would be a considerable problem for them, and indeed might compromise newco’s existence, I suspect that then punishment would not be accepted.
Can Rangers or Mr Whyte Succeed in an Appeal?
Yes. Next question please.
As far as Mr Whyte goes, he might have an argument about the question of guilt. If he has been found guilty of not telling the SFA about his directorial disqualification, then the ambiguity of the term means, as far as I am concerned, that he should be acquitted. At the very least, even if the Panel accepted the SFA interpretation, it was quite reasonable for Mr Whyte not to declare it to them as the date of his disqualification was more than five years prior to become involved in Rangers although his ban was not concluded till inside the five year period.
What else has been found against him? Is he being blamed for his solicitors dragging out the process? Is he being held responsible for a delay in the case (yes – that’s what the Directions penalties are for)?
It takes a lot to achieve a life ban from football. Even Willie Woodburn, the most famous example of a sine die suspension, was in fact re-instated three years later, although by that time he had retired from playing.
Life bans in British football have been issued, I think, only in respect of gambling on football (such as in the Sheffield Wednesday case in the 1960’s).
Abroad it requires active corruption to be banned for life, as in the Juventus scandal a few years ago.
Even if Mr Whyte is guilty, and the vagueness of the disrepute charge gives him an excellent argument that he has not had a fair trial, the penalties on him are so drastic that, unless Lord Nimmo Smith uncovered evidence of actual corruption and there is no suggestion he has, I cannot see how a life ban can stand.
Of course, standing Mr Whyte’s reported comments, he might not bother appealing.
Rangers have appealed, even before receiving the statement of reasons.
“All of us working on behalf of the Club are utterly shocked and dismayed by the draconian sanctions imposed on Rangers in respect of these charges.
“It appears that on one hand the disciplinary panel accepted our central argument that responsibility for bringing the Club into disrepute lay with the actions of one individual – Craig Whyte – as is evident from the unprecedented punishment meted out to him.
“During this hearing the Club produced compelling evidence from a number of sources that following his takeover, Craig Whyte ran the Club in a thoroughly unaccountable manner, rather than adhering to a long-established and proper form of corporate governance.
“The thrust of the charges against the Club focused on non-payment of payroll taxes and evidence was produced that all such decisions in this area were taken by Craig Whyte during his tenure.
“Given this evidence, it is difficult to comprehend that the disciplinary panel has seen fit to effectively punish the Club even more heavily than Mr Whyte. As everyone knows, it has already been decided he is not a fit and proper person to run a football club and any further punishment on him will have little or no impact.
“However, for Rangers, a ban on signing players will seriously undermine the Club’s efforts to rebuild after being rendered insolvent.
“Furthermore, we do not know how bidders for the Club will react to these sanctions and what affect they will have on their proposals.
“The Club has asked for full written reasons for these decisions and intend to appeal against the findings.”
The appeal is an interesting one. I think, as I pointed out above, the apparent inconsistencies in the allocation of blame as between Mr Whyte and Rangers. Either he is solely responsible for all the ills of the last year, in which case why should Rangers be punished (as the defenders of Rangers would argue) or else he and the club are responsible.
In law, the actions of a director render the company liable too. It is difficult to argue that the blame lies on one rogue, especially where there is not criminality.
Mr Whyte ran the club, as he made clear, but he had other directors. It seems odd that, at this stage there is the abundance of evidence of his personal, as opposed to his club’s wrongdoing. Does this come from former directors?
Did Mr King, Mr Betts or the Secretary, Mr Withey, comment upon this?
Did the partners of Duff & Phelps, or its predecessor, MCR, who were acting for Mr Whyte, Liberty Capital and Rangers at different times over the last year, know that “Craig Whyte ran the Club in a thoroughly unaccountable manner, rather than adhering to a long-established and proper form of corporate governance”?
Despite that, I think that Rangers too would have a good argument to overturn some of the verdicts against them.
As regards the sentences, the year’s embargo seems heavy, but as I pointed out there is a huge range on offer and the Panel did not impose the maximum.
These are laid down in Article 15 of the Judicial Panel Protocol.
The appeal must be lodged within five days of the decision, or within three of receiving the full written reasons for the decision.
Along with a deposit of £1,000 there needs to be a note of appeal and grounds of appeal.
The rules direct that, if possible, the appeal commence within five days of the appeal being lodged.
Article 126.96.36.199 states that the Appellate Tribunal’s verdict is final and binding on the parties and not subject to any further appeal.
Under the Rules, there are only four grounds of appeal open to the parties.
1 That the Appellant did not receive a fair hearing from the tribunal;
2 That the tribunal acted ultra vires;
3 That the tribunal issued a decision it could not properly have issued; and
4 That the sanctions imposed were excessive and/or inappropriate.
I won’t, at this point, address in full the issues re finality of decisions, and clauses which seek to bar rights of appeal. The delights of Anisminic v the Foreign Compensation Commission can wait for another blog. However, the law does not like finality clauses in connection with appeals, especially if the body which is stated to be the final arbiter might make a decision it is not empowered to make, or if it makes one so unreasonable that no reasonable body could have made it (told you I’d mention Wednesbury, Jim!)
I think, despite the tight rules, that both Rangers and Mr Whyte could have reasonable prospects of an appeal succeeding, if by success we mean having part of the “conviction” quashed or penalty reduced. Equally, I do not see it as likely that either party would escape scot-free.
There is more to discuss re this issue, and I will come back to it soon.
Posted by Paul McConville