Statements from Rangers Regarding the Failed Appeal re Transfer Embargo

In which I suggest that Duff & Phelps seem to be missing the point of “punishment” and that the silence of the SPL regarding the “unfair advantage” gained by Rangers is inexplicable.

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Following last night’s brief thoughts, I have had a chance to review what the official Rangers website and through that, the administrators have been saying.

My comments are in bold below the relevant sections.

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RANGERS fans are in shock today after the SFA’s Appellate Tribunal refused to rescind a transfer embargo imposed on the club last month by a Disciplinary Panel.

Once again the club – represented by leading QC Richard Keen – put forward a compelling case that the main charge of non-payment of PAYE, NIC and VAT was down to the actions of Craig Whyte and not the club.

There seems to have been a conscious decision to refer to the case put forward by Rangers as “compelling”. There have been a number of uses of the word in the context of the case and the evidence on the Rangers website.

Can Rangers produce publicly this “compelling” case? Sadly for Rangers it was not compelling enough either for Gary Allan QC’s Panel or for Lord Carloway’s Tribunal. The Judicial Panel which assessed the original verdict and penalty heard Rangers’ evidence and this was not seriously disputed. However, as a matter of law, there was no argument presented, as following Tesco v Nattrass there is not one, that Mr Whyte and Rangers were distinct. The argument was one based on “equity”. It failed.

The argument referred to in the Judicial Panel decision did not seem compelling either. Various witnesses confirmed either that they knew that Mr Whyte had stopped paying tax, and did nothing about it, or knew that there were matters of concern, and failed to fulfill their duties to shareholders, Stock Market and indeed the company.

Rangers fans might well be in shock, but a proper analysis of Mr Allan’s decision and the summary of that of Lord Carloway’s appeal panel would remove any legitimate reason for that shock.

They also explained the severe impact a transfer ban would have but the Appellate Tribunal upheld the decision.

The Appeal Tribunal considered Rangers’ plea in mitigation and rejected it. I am sure the eminent Mr Keen QC who appeared for Rangers would have deployed every argument open to him, but, as regards the sentence, a plea in mitigation normally involves some recognition of guilt and steps being taken towards rehabilitation. That does not seem to be the case here. Rangers appear to be in the position of an accused who vigorously maintains innocence all through the trial. Once convicted counsel for the accused cannot offer a serious apology, having denied matters all the way through.

In fact, explaining the effect that the penalty will have in the graphic detail given by Rangers actually justifies the severity of the penalty!

I may have missed it, but I have seen little if any apology for the non-payment of £13 million in tax, nor for the fact that HMRC will not see much, if any of that, whilst at the same time there is no chance of anything from the Big Tax Case being paid. Nobody has yet explained to me how Rangers did not benefit from the £13 million. There was over £3 million in Rangers bank when Duff & Phelps moved in. Presumably that was the balance of the money left, after the rest had gone paying the bills, including wages of players that Rangers would not otherwise have been able to afford to keep!

This is such a clear-cut case of taking an unfair advantage, as described by Neil Doncaster, that I cannot see why the SPL has not acted to withhold prize money. After all, the SPL proceeded against Hearts under the utmost good faith rule for being, allegedly, one day late. Here, by use of money which was due to HMRC, Rangers maintained their place in the league, to the point where the 10-point penalty has proved meaningless. Almost every team in the SPL below Rangers should be one step up the prize money ladder. Why is no one mentioning this?

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Now we move to the statement issued late last night by the Rangers administrator.

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AN SFA independent appeals panel has this evening upheld a decision to impose a 12-month transfer embargo on the club.

Duff and Phelps, administrators of Rangers Football Club, issued the following statement tonight.

Paul Clark, joint administrator, said: “The decision by the appellate tribunal to uphold the sanction, namely the suspension of registration of players for one year, is not competent in the view of the club and its legal advisers.

“Such a sanction was not available to the tribunal and should not have been imposed and it is the intention of the club to challenge the determination. The club will consider seeking review of this most disappointing decision and it is a matter of regret that the certainty and finality Rangers sought on this matter has not been achieved.

It is legitimate to argue about the competency of the suspension. Mr Keen, Rangers QC, would have deployed that argument with customary skill, eloquence and precision. However it failed to convince the Appeal Tribunal.

The best explanation of the competency of the original Tribunal to impose such a penalty comes from Grant Russell of STV. He described the position here.

A brief extract makes the point:-

Rule 94.1 refers to the powers of the judicial panel, stating it “shall be the sole judge” when a club “in any way brings the game into disrepute or any other grounds it considers sufficient”.

… the Scottish FA essentially has the power to call a club before the judicial panel for any reason it wishes, even if a specific rule hasn’t been breached.

Rule 95 then provides a mechanism for an independent tribunal to impose any sanction it wishes outwith the guidelines set down by the Judicial Panel Protocol, leading to the decision to hit Rangers with a registration embargo.

It states: “The Judicial Panel shall have the jurisdiction, subject to the terms of the Judicial Panel Protocol, to deal with any alleged infringement of any provision of these articles.

“A… club… if found to have infringed the articles shall be liable to censure or to a fine or to a suspension or to an expulsion from the Challenge Cup [Scottish Cup] Competition, to any combination of these penalties or such other penalty, condition or sanction as the Judicial Panel considers appropriate, including such other sanctions as are contained within the Judicial Panel Protocol, in order to deal justly with the case in question.” (Emphases added)

The Judicial Panel therefore had the power to impose any punishment as it saw fit. The statement that the sanctions included the ones contained in the Protocol does not mean that they were restricted to them.

To be frank, that is an elementary matter of interpretation.

The use of the word “review” suggests to me the way that Rangers will seek to challenge this. It looks like a Judicial Review. That however is such an exciting topic, I will deal with it in a separate post.

“Everyone at Rangers is bitterly disappointed and dismayed at this outcome.”

Disappointed? That is to be expected. Dismayed? Not if they had read the decision being appealed against.

 

Charles Green, who leads a consortium purchasing Rangers, said: “Our group went into the purchase of the club with this sanction in place but we hoped the decision would at least be commuted. We fully support the club as it considers an appeal against this latest decision.”

I can understand why Mr Green hoped the decision would be “commuted”. However, what was the ground for doing so? Did Mr Green expect the Appeal Panel to change the penalty to suit the fact he hopes to buy the club?

As he is in line to be the buyer, at least of the assets, then maybe he will be funding a challenge to the verdict, After all, it would primarily be for his benefit!

 

Sandy Jardine, spokesman for the Rangers Fans Fighting Fund, added: “Rangers supporters will be shocked and bitterly disappointed by this decision and will find it hard to take that the club has been so heavily punished for the actions of individuals.”

Ah. Now this is an interesting comment. Sandy Jardine says that fans will find it hard to take it that the club is being punished for the actions of “individuals”. This is the official Rangers website, so I suspect an argument that he had been misquoted or take out of context would not work.

Is this the only acknowledgement so far by Rangers that there were more people to blame than Mr Whyte? Maybe someone will ask Mr Jardine to whom he is referring.

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Posted by Paul McConville

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37 Comments

Filed under Administration, Football Governance, Rangers, SFA

37 responses to “Statements from Rangers Regarding the Failed Appeal re Transfer Embargo

  1. Greg72

    As an old-fashioned retired insolvency practitioner, I’m finding it somewhat difficult to see how in what fashion the Joint Administrators are ‘looking after’ the interests of the Rangers’ creditors!!

    • Hugh Jarse

      Totally agree with you Greg.

      Playing Devils Advocate for a minute and disregarding the media spin coming from RFC (IA) and D&P one could argue that the administrators have been acting in the interests of the creditors by getting the club, by whatever means necessary, to the end of the season to 1) allow the club to collect SPL prize money and 2) stop the players walking for nothing and instead being able to sell them once the transfer window reopens.

      This alone could have added £10-20 million to the creditors pot.

      • Except the prize money will be withheld by the SPL to pay Dundee United, the Pars and Hearts. Not sure what it is in total, but I imagine there won’t be anything left to “win”…

      • Hugh Jarse

        I thought they weren’t allowed to prioritise “Football Creditors”?

        Anyhow, even if they do the total debt is reduced with money they wouldn’t have otherwise received which benefits the rest of the creditors in the inevitable winding-up.

        As does the ability to sell the players that can be sold when the window reopens rather than having them walk mid-season for nothing if Rangers had not fulfilled their fixtures.

      • If the SPL withhold prizemoney to pay clubs in Scotland then that money is not passed to RFC (IA) and thus is not the administrators giving priority to one set of creditors. I also suspect that Celtic are owed 340,000 (40,000 already plus 300,000 from recent ticket sales)

  2. Thanks Paul for your usual first class summary, analysis and comment. As a child I was always warned that liars are always found out. On the subject of Mr Jardine; is he still on the payroll of RFC*IA? If so, why? What justifies his position? Surely continued payment of his salary harms the interests of creditors?! In the same vein, how can D & P justify paying wages to 40 players for the past 13 weeks?

    • Charlie Malloy

      Agree about Willie Pullar still being on the payroll. Apparently he’s paid approx £70k a year – the savings from this could have paid a lot of the smaller creditors. Hopefully any further appeal will ask him about that wee slip concerning “individuals”.

    • Carntyne

      Jardine is not the sharpest tool in the box. His comments are not worthy of consideration.

  3. Another good post Paul. Interesting point regarding the Jardine comments about the actions of individuals. Isn’t this the case with any company? Any decisions or actions taken by a company must be taken by an individual or individuals acting for that company. Therefore does it not render Jardine’s argument irrelevant?

    • Ken

      I should let Paul reply, but believe the point of contention was individualS – rather than indivuaL. ergo acknowledgement there was complicity from more than just Whyte

      • Angus

        To tell the truth, I think that noting Jardine’s use of the plural is a bit of a red herring. I believe he probably intended that it would be understood he was referring to CW, and is simply a lazy speaker. He is certainly not a renowned orator. I think he probably just meant “an individual”, and too much is being read into it.

  4. Garry Noakes

    Excellent summary Paul.
    I actually believe the punishment to be fairly light given the fact that they have 40 players on the books a number of which will have contracts running after the next transfer window, the staggering amount of debt and the utter imcompetance of several members of the board.
    Dundee went into administration owing HMRC c£380k and received a six months ban and a twenty five point penalty. The ban had a major impact as they had lost most of the first team squad and had to augment their teams with trialists and what was left of the under 18’s. Relatively speaking Rangers have been dealt with leniently. If run properly in the next year they will not have to revert to the transfer market to field a competitive team and will finish in the top half of the SPL (not taking into account the issue of EBTs etc)
    That said Dundee did have the benefit of having Bryan Jackson as the administrator who was able to deliver a CVA and steer the club towards stability. Rangers…well!!!

  5. Bhoywonder

    Excellent post Paul. RFC (ia) are actually lucky not not to have been thrown out of the SPL as this was the extreme option open to the Judicial Panel. Mr Green has also failed to name his consortium so why is he even a player in this, and being accomodated by the SFA at meetings?

    I also suspect HMRC will not want to make any comment on RFC (ia) and D&P until the FTT findings are revealed, which is to be awaited with baited breath. There summary of events may be very damming to D&P’s standing in the finance world, if they have any left.

  6. There seems to be some misplaced anger on behalf of the Rangers fans. Rather than vent their anger in the form of ‘boycott’ or ‘protest at SFA events’ would it not suit them to perhaps protest at those actually responsible for such mis-management ? 10 Charlotte Square, Edinburgh EH2 4DR, that would be a fair starting point.

    • Angus

      Might I suggest they be allowed, nay – actively encouraged, to continue with their plans to boycott away games? Aberdeen would be a much nicer place to be on matchdays were Rangers (Div 3) to ever play here again, for a start. Stewarty Milne might miss their few quid, but nobody else would.

  7. Den

    If any of these people had read the findings of the first panel they shouldn’t be too surprised that the appeal was turned down, and should be relieved that the punishment was merely confirmed and not increased.

    The fine was pretty small in the scheme of things (a months wages for one of the squad a few years ago) and they wouldn’t be registering many players anyway.

    I feel that what really damaged Rangers were the facts. So damning that all thoughts of a newco waltzing back into the SPL and taking their old seat at the table, having shed all the debts for pennies and blaming everything else on Craig Whyte, seems inconceivable.

    The panel changed the landscape for good by setting out the facts in a clear and objective fashion. Any further investigations will have to live up to those high standards and the Appeal certainly has.

    We don’t hear as much about Scottish football needing Rangers, the tide has turned and a lot of people seem to be distancing themselves.

    • Richboy

      Not only are people distancing themselves some have positively gone underground. When was the last time we heard Paul Murray whining about D&P, or Martin Bain claiming he is owed 300K, or the South African tax dodger Dave King (is he still a Director of RFC?).

      Unfortunately we are still subjected to the disgraceful, threatening utterances from Sandy Jardine and the ill informed, infantile rants of Ally McCoist. Perhaps, though unlikely, the SFA/SPL will act against Ally in the same way they did with Neil Lennon.

  8. What Rangers football club (in administration) fail to understand is that they at the moment, are being punished for Craig Whyte’s failings. When UEFA get involved, Rangers will be very fortunate if there is still a football club to support. I understand that a number of European football clubs have spoken to UEFA about Rangers fielding ineligible players against them in European competitions since 2001.

  9. Richboy

    I know I have posed this question before and beg your indulgence for asking again but;

    Who is advising Rangers Football Club on legal matters?

    As a self confessed legal know nothing, I would never have appealed the decision of the tribunal. It was clear to me, having read the tribunal findings and Pauls excellent analysis, that the punishment was fair and legal. It was also pointed out in the “note of reason” that Rangers had no issue with getting a fair hearing and the tribunal using the Tesco vs Nattrass case as the basis for their findings.

    In every legal blog I read after the tribunals findings were published, the opinion was that the findings were sound and Rangers would fail on appeal.

    Surely Mr Keen would have advised Rangers of this. If that is the case then are D&P further guilty of not looking after creditors interests as I am sure Mr Keen commands a hefty fee.

    It seems to me that D&P are spending money on legal advice and court proceedings that should be going into the creditors pot. To date I do not believe they have had a single win in court or at the tribunals. Perhaps they should read this blog (and web3dlaw) prior to spending any more of other peoples money.

    I think it is time for an officer of the court to advise D&P that they must look after creditors first and not be so intent in looking after the new owners interests.

    • Richboy

      Apologies to D&P, apparently the Rangers fans Fighting Fund covered the costs of the appeal.

    • Greg72

      On the basis that the Administrators ‘are’ the Club, their law agents are Biggart Baillie LLP – a pretty large law firm.

      However – I’m doing my ‘mantra’ again – WHAT ABOUT THE CREDITORS? Do we yet know the results of the creditors’ ‘correspondence’ meeting? Is there any creditor out there – no matter the size of his debt – who’d like to give a mandate to Paul (or even to me!) – so that the Administrators might be ‘approached;?

      Mind you, I’ll be interested to see what hapens in the Court of Session in the morning!

  10. merciatic

    Ally McCoist is not so vociferous this time round. Where’s he at?

    • Paul Boyle

      Far East? I read he somewhere he is with a young Rangers squad that takes part in a “prestige” Sevens Tournament. I wonder who is paying for that if it’s true?

  11. duggie73

    Good piece.

    Needs quoting on Rangers fansites if it hasn’t been already.

  12. Steven

    Paul, I was wondering if you knew whether Neil Doncaster would be affected financially if the TV deal he brokered were to collapse? If he stands to lose “bonuses” then it would surely be hard for him to look objectively at the situation?

  13. Bill

    Debt is evil. Innocent people (not only creditors) suffer because of it.

    Because of what I have done in my personal life, I am guilty, and forever tainted, no matter how I may try to atone in future for past sins.

    Rangers Football Club (as a corporate entity) is guilty, and will be forever tainted, unless they (somehow manage to) pay every single penny they owe (although I feel sorry for their non-playing staff and supporters).

    But there appears to be a lot of people jumping on the “bash Rangers” bandwagon.

    There appears to be a lot of people taking the moral high ground on the Rangers saga who perhaps shouldn’t be, don’t you think, Mr McConville?

    You are obviously clued up on the law (you should be, you’ve been involved for 400-some years), but I couldn’t find you listed as a solicitor on lawscot, so I got curious and found this…

    http://www.linkedin.com/pub/paul-mcconville/27/676/522

    which, in turn, led me to this…

    http://www.lawscot.org.uk/news/press-releases/2010/september/news_20100902

    I wonder what that’s all about. It doesn’t prove anything. It would appear to involve debt in some way though. Pot? Kettle? Black?

    • Thanks Bill.

      I was bankrupted by HMRC. Their agent told me that my proposals for resolving the issue made commercial sense but did not accord with a new policy adopted by HMRC.

      As a result my practice closed and I have not worked as a solcitor since.

      I know all about issues of debt (and there is a long story re my dealings with HMRC that I don’t intend to bore people with) and the effects of it on people.

      I am sorry you feel forever guilty yourself Bill.

      You might think pot/kettle/black.

      I don’t.

  14. Bill

    Paul,

    First off, I admire you for publishing my post, and for making a polite response to it. (I see there are already thumbs down for my post. So be it).

    To be clear, I do not consider myself a Rangers’ supporter (I have attended very few games), although I do follow football, and do have a “leaning” towards Rangers. Or at least I did. I am coming to the conclusion that they (RFC, the company) should have the book thrown at them. Unfortunately, as is always the case in such events, innocent people would also suffer.

    As regards culpability…

    Whyte is an opportunist. I suspect his plan may have backfired. Time will tell.

    Murray is/was a dreamer. Assuming the EBT case goes against Rangers, IMO, Murray (and his advisers) are equally as culpable as Whyte.

    Lloyds Bank are not squeaky clean either.

    But I think the real villains are the players (in general, not specifically Rangers). The money they demand (and get) is obscene. No other “business” could (or would be allowed to) survive with such an income to wages ratio.

    I also think there must be a few “squeaky bums” in other football boardrooms right now.

  15. James Patrick

    Some rangers fans are claiming that Charles Green/consortium have already bought whytes shares in rangers, is this correct?

  16. @ceemcc May 18, 2012 at 11:52 am above

    “If the SPL withhold prizemoney to pay clubs in Scotland then that money is not passed to RFC (IA) and thus is not the administrators giving priority to one set of creditors. I also suspect that Celtic are owed 340,000 (40,000 already plus 300,000 from recent ticket sales)”

    But, if they (the SFA, and not the Administrators) withhold money in accordance with their rules, would it not be seen as a penalty for rule breaking? It never gets into the Administrator’s pot in the first place, because it is no longer theirs.

    My question would be hypothetically, can Everton pay, or be asked (by UEFA, for example) to pay Rapid Vienna, rather than to Rangers any outstanding money due to them in the Jelavic transfer?

  17. Another good post Paul. Interesting point regarding the Jardine comments about the actions of individuals. Isn’t this the case with any company? Any decisions or actions taken by a company must be taken by an individual or individuals acting for that company. Therefore does it not render Jardine’s argument irrelevant?

  18. Rangers have asked the Court of Session to overturn a year-long transfer ban imposed on the club by the Scottish Football Association. Lawyers for the club said the ban would cause them “utterly irretrievable” prejudice if it was upheld. They claim the embargo is unlawful and outside the powers of the SFA tribunal.

    http://www.bbc.co.uk/news/uk-scotland-glasgow-west-18211947

  19. Brian Jeffrey

    Surely by adopting this route of appeal D&P have exposed Rangers to further football sanctions. FIFA statutes (statutes 62-66 as ratified in August 2011) expressly prohibit clubs from resorting to “Ordinary courts of law” to resolve disputes. These same statutes require national associations to insert specific clauses in their own statutes and regulations to ensure the compliance of member clubs. FIFA recognises an exclusive right (subject to very limited exception where specific provision is made in their statutes) of The Court of Arbitration for Sport as the tribunal to resolve disputes. They appear to have adopted these rules to ensure a universal standard is applied globally to the resolution process. It appears that FIFA explicitly and specifically prohibit Rangers from challenging this ban in the national courts and that they have placed a positive obligation on the SFA to ensure compliance. If my understanding is correct D&P are not only using the very limited funds available to them to challenge a ruling by one of the most eminent legal minds in the country but the are doing so in such a manner as to invite further sanctions from the Football Authorities. How can this be seen to be operating in the interests of the creditors as a whole?

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