Why Rangers Can Vote on 4th July, and How the SPL and Rangers are in Error

In which I try to explain some details about the July 4 meeting; suggest why Rangers PLC can vote on Sevco Rangers; clarify precisely what the SPL members are considering; and what this has to do with the ongoing EBT investigation.

As matters stand, it looks as if the SPL is treating Rangers FC as an ongoing entity, which is bad news for Mr Green as it seems there are still lots of things to be done which have not been carried out yet, and the season looms ever closer.

It also leaves the possibility of chaos if Dunfermline, Dundee or both, challenge the actions of the SPL as ultra vires!

As things stand, do the SPL know what they are doing?

The SPL Board considered various issues today, including two related to Rangers.

The section of the press release relevant to the admission of “The Rangers Football Club” to the SPL is shown immediately below.

—————————————————-

At its meeting earlier today, the SPL Board considered a number of issues relating to Rangers FC.

General Meeting

An application for registration of transfer of Rangers’ SPL share has been received. Consideration of the application will depend on receipt by the SPL Board of all required documentation and verification.

A general meeting of all 12 member clubs has been convened for 10am on Wednesday 4 July 2012 for members to decide whether to approve the transfer.

—————————————————-

So what will happen on 4th July, who can vote, and what does Sevco 5088 Ltd need to achieve for Club 12 to be ”Rangers”?

The SPL Articles and Rules are where the answers are contained, and the relevant sections are shown at the foot of this piece.

I will refer in this piece to Rangers Football Club PLC (In Administration) as “Rangers PLC”; to Rangers Football Club, as distinct from the corporate entities, as “Rangers FC”; and to “The Rangers Football Club” and Sevco 5088 Ltd as “Sevco”. I will refer to the General Meeting as “GM”.

 

Can “Rangers” Vote on 4th July?

Under Article 28, every Member of the SPL has a duty to attend the General Meeting fixed for 4th July. Under Article 46, every Member shall have one vote.

A Member can cast a vote and is defined in the Articles as follows – “Member means a person who or which is the holder of a Share”.

At present Rangers PLC owns the SPL share. Rangers FC has no corporate identity allowing it to own the Share, and Sevco cannot be the owner of the Share until the transfer is approved. Even although the SPL Share has been sold by Rangers PLC to Sevco, it only is completed when the transfer of the share is approved. This is what the SPL Members are being asked to decide at the GM.

Therefore it seems that Rangers PLC, in the form of Duff & Phelps, have a vote. They can appoint Mr Green as their proxy. In addition, the sale agreement between Rangers PLC and Sevco will undoubtedly have required D&P to use its best endeavours to ensure that the share transfer was successful. Therefore Rangers PLC will vote for Sevco.

Article 6 states that a share may only be held by a person who “is the owner and operator of a Club and if a Member shall cease to be the owner and operator of a Club then such Member shall cease to be entitled to hold a Share”. The whole assets and business of Rangers have, we are told, been sold unconditionally to Sevco. Therefore this must include the “Club”. If Rangers PLC is no longer an owner and operator of a football club, then surely it loses its vote?

No, it doesn’t.

Whilst Rangers PLC is no longer entitled to hold a share, it still does hold it until it is removed or transferred away. A member is not defined as someone entitled to a share, but as someone who has a share. Therefore, even if no longer entitled to a share, until the share is no longer in the person’s ownership, they are still a shareholder and have voting rights.

Under Article 14, where a Member is no longer entitled to hold a share, the share can be removed from it and transferred to another party, effectively by force. This involves a GM of the Members passing a Qualified Resolution instructing the Board to write to the Member instructing the transfer of the share to a named transferee. That transfer causes the transferor’s club no longer to be a member of the league. If the no longer entitled Member fails to effect the transfer, then the SPL can enforce the transfer by filling out the papers itself.

That procedure will not take place prior to the vote on 4th July and therefore Rangers PLC will have the right to vote.


What Is the Vote to Decide?

Article 11 states “…the approval of the Members in General Meeting shall be required before the transfer of any Share shall be registered …”

It is the registration of the transfer which completes it. Until the transfer is registered, the original owner remains the “owner” of the share. As a Private Limited Company, the Company must consent to the transfer before it is completed. If the Company does not consent, then the transfer is ineffective.

Therefore the vote on 4th July is to approve the transfer.

As less than 21 days notice of the meeting has been given, the SPL must consider that this is simply an Ordinary Resolution, which is dealt with under Article 36. This requires “not less than 66% of the Members of the Company who are entitled to attend and vote at a General Meeting” to consent. Put in simple numbers, there need to be 8 votes in favour of the transfer. That is the case whether or not there are abstentions. An abstention is therefore a “no” vote. Failure to turn up would be a “no” vote.

Can Sevco muster an additional seven votes to have the transfer approved?

 

Might The Meeting Be Considering the Wrong Motion?

This relates to the question of whether there is an existing Rangers FC, or a newly created one.

If it is seen as an existing and continuing Rangers FC, then the vote on the share transfer seems to sort the matter out. Eight votes for Sevco, and Rangers are in as Club 12 for the coming season.

However, there are a couple of issues here. The SPL itself does not seem to have worked out the precise status of Rangers FC.

As its press release today said:- The SPL Board heard a report from its solicitors following the investigation into payments to, or for the benefit of, players allegedly made by Rangers FC outside of contract. The delay in concluding the investigation was caused by an initial lack of co-operation from Rangers FC. The investigation has now been completed and, in the view of the SPL, there is a prima facie case to answer in respect of its Rules. Disciplinary charges will be brought when the future status of Rangers FC is clarified and prior to the start of season 2012/13.”

If Rangers FC is a continuing entity, then it still possesses, subject to the SPL Disciplinary Processes, its “history”. However, if it is a continuing entity, then it also needs, under Rule A2.2, to satisfy the “Membership Criteria”. These are detailed in Article A2.5 and I wrote about them here.

It is quite clear that Rangers FC has not fulfilled the Membership Criteria, in connection with audited accounts, audited financial statements and non payment of taxes.

Under Article A2.4 where the requirements of Rule A2.7 are not met, a member club “shall be subject to such sanction or sanctions and such action may be taken as the Company in General Meeting shall, in its absolute discretion, determine”.

If Rangers FC is a continuing club, then there ought to be a hearing at a GM to establish what sanctions there should be for its failure to meet those requirements.

Under Rule A2.6 a club can apply for a waiver by 31st March, but Rule A2.7 permits the Board “in its absolute discretion to waive, relax or grant a period of grace in respect of any Club’s or Candidate Club’s requirement to comply with any part of the Membership Criteria…”

If Rangers FC is a continuing entity, then did D&P apply to the SPL for a waiver of the requirements, or for a further extension of time? Bearing in mind that the SPL commented on the lack of co-operation of Rangers FC in the EBT investigation, how helpful would the SPL be to Rangers in looking for their failings to be forgiven?

As matters stand therefore, the July 4 GM is considering the share transfer. If approved, there will still need to be a decision made about what “sanction or sanctions” should be imposed on Rangers FC for its failure to meet Membership Requirements.

The way round this is for the SPL Board to be asked by Rangers FC for a waiver. Would the Board permit a team to ignore and indeed wilfully flout the Financial Fair Play rules, bearing in mind the importance of these matters to UEFA?

 

What if it is not “Continuing Rangers”?

If the SPL treats Rangers FC as a new entity, this would probably negate the effects of the EBT investigation going forward. Is it simply a case of transferring the share, and automatically Sevco has a team in the SPL?

Rule A2.1 states “The association football clubs eligible to participate in the League in any Season shall … be those Clubs which participated in the League in the immediately preceding Season…“

Therefore “new Rangers” has no right to participate in the SPL, without being “admitted”. Indeed, if Rangers PLC’s team no longer exists, then there are only eleven clubs left in the SPL.

On that basis, Article 38 becomes relevant. This states, inter alia, that “A Special Qualified Resolution, (83%) shall be required for the passing of a resolution in respect of the following Reserved Matters:-

(i) any expansion of the League by the addition or admission of new Members (other than as a result of the operation of the Rules governing promotion/relegation between the League and the SFL).”

Logically the “addition or admission” of a new Member, which is what Rangers would be if not a continuing Member, would expand the SPL from its present eleven members to twelve.

That would require an 83% vote in favour. That equates to 10 votes out of 12 to allow “new Rangers” into the league. Bizarrely Rangers PLC would still have its vote, as the holder of a share!

If that is the case, has Sevco fulfilled the Membership Requirements? It does not have historical accounts. It does not have financial statements. It might have financial projections, but of what value?

 

Conclusion

It is by now axiomatic that nothing involving Rangers is simple, and I don’t think that this is simply because I complicate matters.

If the SPL has decided to proceed down the road of “only” requiring a share transfer, that is an acknowledgement that Rangers FC continues. However, all the Membership Requirements are still to be addressed, either by applying for a waiver or further time extension. Can that be carried out in time for the season starting? Bearing in mind that the SPL has said that disciplinary procedures will start prior to next season, once the position of Rangers is clarified, it would be possible that, having been admitted by the SPL, Rangers FC would be eliminated as part of the disciplinary process.

If Sevco Rangers is treated as a new entity, then I think that either Dunfermline or Dundee, or indeed both, would have grounds for action against the SPL. This would be on the basis that the SPL was not following its rules. There might then be an argument about which team was to replace Rangers, but the SPL could be putting itself in difficulties. Either of the clubs mentioned would, I submit, not fall foul of rules against football litigation, on the basis that they have no other forum for arguing that a decision to admit a Sevco Rangers would be ultra vires.

The dangers is that vested interests will argue that only “Rangers” whatever that entity might be, is set up to play in the SPL next season. That would be a lame excuse though.

Roll on the 4th July!

 

Posted by Paul McConville

 

 

RELEVANT SPL RULES AND ARTICLES

Article 6 -“A Share may only be issued, allotted, transferred to or held by a person who is the owner and operator of a Club and if a Member shall cease to be the owner and operator of a Club then such Member shall cease to be entitled to hold a Share.”

Article 11 -“Except where the transfer of a Share is occasioned by the promotion of an association football club from and relegation of a Club to the SFL, the approval of the Members in General Meeting shall be required before the transfer of any Share shall be registered and the Members may, in their absolute discretion, refuse to approve the registration of the transfer of any such Share.”

Article 13(1) -“The Members shall refuse to approve the registration of the transfer of a Share:- (i) to a person who the Board is not satisfied is or, at the time that the transferee will be entered in the Company’s Register of Members as the holder of the Share, will be the owner and operator of a Club;”

Article 14 -“If:-

(i) a Member shall cease to be entitled to hold a Share; or

(ii) a trustee in sequestration, manager, receiver or administrative receiver shall be appointed in respect of a Member or any property of a Member, or an administration order shall be made in respect of a Member or any property of a Member or an order shall be made or an effective resolution passed for the winding up of a Member otherwise than for the purpose of reconstruction or amalgamation;

then that Member or its manager, receiver, administrative receiver, administrator or liquidator or any other person entitled to the Share shall, on receiving notice in writing from the Board following the Company in General Meeting passing a Qualified Resolution that such notice should be issued by the Board and confirming the identity of the proposed transferee, transfer its Share to such other person as the Board shall direct at the price of £1 and the Club owned and operated by such Member shall forthwith cease to be a member of the League and the Club owned and operated by the transferee shall become a member of the League in its place.”

Article 17 -“Whenever a requirement to transfer a Share shall arise, if the relevant Member shall fail to transfer its Share within seven (7) days of notice having been given of the requirement to transfer, the Board may authorise any Director of the Company to execute a transfer thereof and a transfer so executed shall be valid and effective as if the same had been executed by the Member concerned and the transferee shall on payment of the sum of £1 to the Secretary to be held in trust for the transferor be entered in the register of Members as the holder of such Share.”

Article 19 -“If the Members refuse to approve the registration of the transfer of a Share, the Board shall after such refusal send to the transferor and transferee notice of the refusal.”

Article 25 – “A General Meeting called for the passing of a special resolution, Qualified Resolution or Special Qualified Resolution shall be called by at least twenty-one (21) clear days’ notice. All other General Meetings (including any General Meeting at which a resolution in respect of a Reserved Matter for which a Qualified Resolution or Special Qualified Resolution is not required) shall be called by at least fourteen (14) clear days’ notice…”

Article 28 – “Without prejudice to the provisions of Article 30, every Member shall attend (whether in person, by proxy or by duly authorised representative in accordance with these Articles) at every General Meeting.”

Article 36 – “Except … as otherwise provided in these Articles, not less than 66% of the Members of the Company who are entitled to attend and vote at a General Meeting of which notice has been duly given (whether all the Members of the Company actually attend and vote or not) shall be required for the passing of all Ordinary Resolutions of the Company and for the giving of all consents, approvals or the like considered at a General Meeting.”

Article 38 – “A Special Qualified Resolution, (83%) shall be required for the passing of a resolution in respect of the following Reserved Matters:-

(i) any expansion of the League by the addition or admission of new Members (other than as a result of the operation of the Rules governing promotion/relegation between the League and the SFL);

(ii) any reduction in the number of Members of the Scottish Premier League (other than as a result of a Member ceasing to be a Member of the Scottish Premier League in accordance with the Rules and/or these Articles or as a consequence of the expulsion of a Member); and,

(iii) the allotment and the issue of a Share.”

Article 46 – “Subject to any rights or restrictions attached to any Shares, every Member present by a representative or proxy shall have one vote whether on a show of hands or on a poll. The Chairman shall not have a second or casting vote.”

Rule A2.1 – “The League shall consist of 12 leading association football clubs in Scotland. The association football clubs eligible to participate in the League in any Season shall, subject to the Articles of Association and Rules, be those Clubs which participated in the League in the immediately preceding Season, except that, subject to Rules A2.2, A2.3 and A2.4, the Club finishing in last place in the League in the immediately preceding Season shall not be eligible to participate in the League and shall be relegated to the SFL and the Candidate Club shall be promoted from the SFL and admitted entry to the League.”

Rule A2.2 – “Subject to Rule A2.7, the Candidate Club for any Season, if it is to be promoted from the SFL and admitted entry to the League, and the Clubs participating in the League, must satisfy the Membership Criteria.”

Rule A2.4 – “In the event that any Club, in the opinion of the Board in its absolute discretion, shall or if it were to participate in the League in any Season would, fail to fully comply with the Membership Criteria and no waiver, relaxation or period of grace is or has been granted to that Club in terms of Rule A2.7, such Club shall be subject to such sanction or sanctions and such action may be taken as the Company in General Meeting shall, in its absolute discretion, determine.”

Rule A2.5 – “The Membership Criteria are:-

A2.5.1 A Club participating in the League must be a member of the SFA.

A2.5.2 A Club participating in the League must have registered or be deemed to have registered its ground in accordance with Rule H6.1.

A2.5.3 A Club participating in the League must:-

A2.5.3.1 itself, or through a subsidiary or holding company of such Club, own its Registered Ground; or

A2.5.3.2 have such other rights of occupation or tenure in its Registered Ground as may be approved by the Board.

A2.5.4 Any ground which a Club or the Candidate Club registers or is deemed to have registered as its Registered Ground, must, by not later than 31st March preceding any Season and for the whole of that Season:-

A2.5.4.1 subject to Rule H6.8, have satisfied and satisfy the Stadia Handbook requirements for a Club taking part in the League;

A2.5.4.2 have provided and provide individually numbered seats in areas under cover of a roof for not less than 6,000 spectators; and,

A2.5.4.3 have had and have adequate winter pitch protection, as provided in Rule H6.7,

A2.5.5 Clubs shall take all steps determined necessary by the Board to implement the development of youth football in Scotland in line with the requirements, philosophy and recommendations of the Company.

A2.5.6 Where a Club or the Candidate Club registers or is deemed to have registered as its Registered Ground for any Season a ground at which it is intended to play League Matches on a pitch utilising a synthetic or artificial playing surface then such Club or Candidate Club must have made an application to the Board in accordance with Rule B23.1.3 by not later than 31st March and must have been granted an approval by the Board in terms of that Rule by not later than 1st June, both preceding such Season.

A2.5.7 Clubs and the Candidate Club shall from and including 1 January 2010 comply with the Financial Disclosure Requirements.”

Rule A2.6 – “Any application for approval for the purposes of Rule A2.5.3.2 or application for a waiver, relaxation or period of grace for the purposes of Rule A2.7, must be made in writing to the Secretary not later than 31st March preceding any Season or, as the case may be, first Season, in relation to which the ground for which such approval, waiver, relaxation or, as the case may be, period of grace is sought, is to be registered or deemed to be registered in accordance with Rule H6.1, as the Registered Ground of the Club or Candidate Club concerned.”

Rule A2.7 – “The Board may in its absolute discretion waive, relax or grant a period of grace in respect of any Club’s or Candidate Club’s requirement to comply with any part of the Membership Criteria and/or Rules A2.6 and H6.1.”

Rule A4 – “The owner and operator of a Club participating in the League shall become a member of the Company by acquiring one Ordinary Share therein at par for cash, such Ordinary Share to be acquired, through the Secretary, in accordance with the provisions of the Articles of Association. The owner and operator of a Club ceasing to be entitled to play in the League shall cease to be a member of the Company and shall relinquish its Ordinary Share at the end of the relevant Season in accordance with the Articles of Association.”

 

 

 

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39 Comments

Filed under Companies Act 2006, Football Governance, Rangers, SPL

39 responses to “Why Rangers Can Vote on 4th July, and How the SPL and Rangers are in Error

  1. Enlightening as ever Paul. Many thanks.

    • Paul

      I note what you say that as a member Rangers PLC gets a vote.

      However in most association/club/corporate body there is always something in the articles of association about conflict of interest. Is there no such article in the ‘rules’ of the SPL? and if so why is it not applicable?.

  2. RichW

    Is it reasonable to believe that there is an equivalent to Paul in the boardrooms of the SPL, SFA and SPL member clubs, pointing out the issues as Paul so helpfully does for us? Or do you think they are all just winging it?

    • Tom Doherty

      It seems patently obvious that they have been winging it from the day they got the job. It appears that most of them have been promoted to their own level of incompetence.

  3. Brian Jeffrey

    Paul, I am reluctant to take issue with you as generally speaking I tend to agree with most of what you say, most of the time.
    I have to say that I do think however that you are complicating this more than is intended by the drafters of the rules or than is required by the everyday interpretation of the words used. What’s more, if the SPL thought that there were, still at present, 12 member clubs in the league they would not have resorted to “Club 12″ in the fixtures list.
    It seems to me that the only logical reason for having done so is that they take the view there are currently only 11 members and that being the case only 11 members can vote on 4th July.
    I feel supported in that view by reference to the everyday meaning of the language used in Article 6.
    “A Share may only be issued, allotted, transferred to or held by a person who is the owner and operator of a Club”
    Rangers PLC cannot hold their share because they are no longer owners or operators of a club. That is plain and simple and unequivicol. It is an absolute statement without qualification.
    Article 6 continues, not by way of qualification of the absolute statement but rather, I would contend, as a means of emphasising the immediate loss of all rights associated with the share…” and if a Member shall cease to be the owner and operator of a Club then such Member shall cease to be entitled to hold a Share.” On any proper interpretation of that language it is again simple and unequivicol… A member who no longer owns or operates a club loses the the entitlement to a share (i.e to membership) which they previously had because they were the owner or operator of a club. I cannot conceive of any civil court construing that language in any way other than to the effect that the member losing entitlement to the share loses everything which that share entitles them to, including in this instance a vote on July 4th.
    So my point is to the effect that whilst you suggest that even although they are not entitled to the share the fact that they already have it is sufficient to allow them to use it to vote must be viewed as contrary to natural justice and the result of an unecessarily complicated interpretation of what is relative simple language.

    • Pensionerbhoy

      Paul, Brian, dombhoy,
      I sincerely fear you are overlooking the key element in all of this, and I do not say this facetiously, and that is that ‘they are ra peepul’ and all that comes to pass will continue to be as they dictate. I have rules and regulations coming out of my ears right now, but doubt that any one will be of worth when decisions are made. It will not be a question of the punishment fitting the crime, it will be the criminal fitting-up the punishment. Sadly, in spite of the longing in my heart to the contrary, this is how my gut has been reacting all the way through and I have no faith in EUEFA or FIFA providing me with an alcaseltzor remedy.

      H h

    • weegie

      Good points Brian. Keeping it simple. Can Rangers remain members of SPL; No. They do not own or operate a club therefore they lose right and entitlement to a share. The SPL then says to whom it is to be transferred. Penalties for wrong doing etc are dealt with separately. Simplez

  4. Bill Bertram

    Very interesting and much more clarity given to this point which I raised with my own club’s chairman last week. (No response to my email).

    Taking a completely different perspective do you a have view on the potential for a joint action against SPL and a member club? As a customer I expect to enjoy my paid for right to watch a game played within the rules. There has clearly been a breach of corporate governance given that information was in the public domain some time (4years?) that all was not right at Ibrox. I guess the likelihood of a presentable case being created will be “no” but it would be good to have another potential pressure point to push.

  5. I am in agreement with you Brian. I find it astonishing that this liquidated company, who by all accounts are dead and do not exist in the SPL, can still have a vote. This situation, whether they get a vote or not, should be the first matter on the agenda to be discussed and voted on by the remaining eleven clubs…before a vote on letting any new organisation into the SPL on July 4th. It smacks of corruption in order to load the dice in their favour. Any other league in Europe would have ensured that they (Cheats F.C) never got anywhere near the voting chamber after what they have been found guilty of.

  6. There's Only One Willie Miller

    One thing that has become obvious from this whole debacle is that the SPL & SFA need new rules. The current rules are far too vague and contradictory and allow the governing bodies too much discretion in applying them.

  7. Auldheid

    I’m with Brian Jeffrey on this on two counts.

    1) Natural justice suggests that if the cause of a share being lost is wrongdoing (on a grand scale) the wrong doer cannot benefit from an interpretation that goes against natural justice.

    2) That Dodo FC would get a vote is the legend put out by MSM and the likely source, if they checked it, would be Neil Doncaster. He has already misled the media with his early assertions that the 6 man SPL Board would make the call, a line Mr Keevins swallowed and promulgated. Thus any interpretation of SPL rules that comes from the SPL has to be treated with extreme scepticism.

    • redetin

      I’m with you on this Auldheid. When there is so much that is open to interpretation, my test is “what would a reasonable person expect from the rules?”. Certainly not allowing member to benefit from bringing the game into serious disrepute, reconstituting itself and emerging in a slightly different guise.

    • Marching on Together

      “if the cause of a share being lost is wrongdoing (on a grand scale)”

      So what exactly is this as at 4 July? Not paying their tax and NI during the Whyte regime? Being dealt with by the SFA panel. Seeking judicial review at the Court of Session? Up to the SFA to deal with. Dual contracts? Only allegations as yet, no charges laid, although they will be, but not until after 4 July.

      So what are we left with? An insolvency event which at some point will come with a liquidation of oldco. And a request to transfer its share in the SPL.

      The SPL lawyers will be advising the SPL very clearly that even if you know that they are a shower of cheating b*stards, the SPL cannot take any of the other stuff into account, and only those areas where the oldco has broken SPL rules, and a case has been made which Rangers have had a chance to answer in accordance with the SPL’s disciplinary procedures, can be taken into account. All the rest is irrelevant on 4 July.

      My prediction is that on 4 July the SPL will vote in favour of Sevco being granted the transfer of the SPL share, but subject to them contractually agreeing to accept all sanctions imposed on the “club” during its ownership by oldco. This will include whatever the SFA does about its current disciplinary proceedings, and most importantly the dual contracts case. My belief is that it will be the dual contracts problem that eventually sees the SFA suspend Sevoco’s membership of the SFA, thus chucking them out of the SPL. Armageddon for Rangers, but not on 4 July.

      • deekbhoy

        I think the legal argument is academic. This is not a court of law where the finer point of the ‘rules’ are going to be examined but 12 members (hopefully 11 as I disagree with Paul’s view) voting yes or no.

        • Marching on Together

          Perhaps it is not a court of law, but I bet you the SPL will have their lawyers in attendance, and most club chairmen will bring their lawyers with them as well. It is important that whatever is done, is done in a watertight manner, in accordance with the SPL’s own rules, so as to minimise the chances of someone trotting off to court after the event.

  8. Auldheid

    ” That procedure will not take place prior to the vote on 4th July and therefore Rangers PLC will have the right to vote.”

    Some questions on this.

    Why did the procedure not? take place

    Is there an argument the SPL and Neil Doncaster should have been fpreparing for the course of action not followed on the contingency basis that Mr Doncaster’s belief a CVA was possible (hah) was in fact mistaken?.

    In not following this course did the consequences favour a vote in favour of Sevco?

    Is Doncaster trying to “engineer” the result he believes best for the SPL but not Scottish football.

  9. John Burns

    I am at a loss to understand why it is perceived that any entity associated with the “Rangers” brand will have a vote at the General Meeting on 4 July 2012.

    Rangers PLC, erstwhile shareholder and member, will be formally in the process of Liquidation at the above date and therefore share No 12 will be given to club No 12 sometime after the vote of the ELEVEN remaining shareholders.

    It would be a preposterous state of affairs, almost akin to a court trial where a member of the jury, unable to complete his/her duties, was replaced by the defendant. Rangers have been omitted from the fixture listing with Club No 12 taking their place, so why on earth would they be sitting in judgement of themselves with the eleven bona fide shareholders?

    Why can’t the media presenters and reporters get this into their heads?

    A similar situation existed with regard to the Appeals Panel and their consideration of a ‘suitable’ new sanction after Lord Glennie’s decision on the Transfer Embargo(I am aware that this has been overtaken by very recent events). Time after time we heard people, who should know better, ‘rabbit on’ about banning Rangers from The Scottish Cup – if they read SFA Rule 66, 94.1, they would immediately see that there can only be ejection from that competition for a relevant associated offence during the competition itself; there is no provision for any advance or retrospective ban.

    Natural justice must take precedence in this astonishing affair and it must be seen to be done, by all fans, and all clubs, in the land. All double-speak and subtle legalistic jargon must be swept away along with the ‘scare stories’ of the demise of Scottish Football without A Rangers, written by usual suspects with vested interests within the mainstream media in this country.

    Sporting integrity must win the day.

    Who knows,the recent positive news from SKY may have a stiffening effect on the backbone of a few club chairmen, notably, but not exclusively, one from Ayrshire.

    • jim larkin

      I think you paul…should take over from paul mcbride qc, when it comes to sfa matters.
      Good on you.

      To dunfermline or dundee. . . Carpe diem

  10. Waterygrave

    I appreciate your work on this matter Paul, however Sevco or Rangers PLC voting does not matter as the %age required will still be 66% as per SPL rules, this means that if it were an 11 team set up, 7 out of 11 still need to vote for Rangers. Assuming that Rangers would vote for themselves in a 12 team set up, they would still require the other 7 so their own vote is irrelevant.

    • Thanks Watery!
      If I had checked percentages before I started, I could have saved myself a lot of writing!
      🙂

    • Brian Jeffrey

      I must respectfully disagree. Whist I hate getting into technical detail the rule says NOT LESS than 66% of the members entitled to vote must agree. 66% of 12 is 7.92 so not less than that necessarily means 8 votes or put another way 5 votes against are required to defeat it. 66% of 11 is 7.26. Not less than 7.26 necessarily requires 8 votes and so Rangers would require 8 of the 11 members to vote for them. So only 4 votes against puts them out rather than 5.
      That aside however I am much less exercised by the maths than I am by the fairness and integrity issues that are at stake. I must disagree with your assertion that, “it doesn’t matter”. It matters a great deal and reflects in a very profound manner on the integrity of the SPL’s processes if the applicant for a share is entitled to vote upon the allocation of that share. It matters that Rangers will have a seat at the table and be able to directly contribute to the debate. It matters that such arrogance is accepted rather than challenged. It matters that the custodians of the game are more interested in finance than in sporting integrity and it matters that the SPL’s rules are seen to be applied rather than bent or ignored or loosely interpreted to suit vested interests and the particular interests of a powerful interested party.

      • Brian Jeffrey

        One other technical point if I may… The 8 votes required in either scenario is a threshold for the passing of a motion to accept Rangers newco into the SPL. if any member club should chose to abstain then that will have the same effect as a vote against as it is one less vote towards the required threshold

    • Robert D Bruce

      Surely 8 from 11 need to vote for them to carry it. 7 from 11 leaves them short of 66%. More reason to keep them out of the vote …… No?

  11. Much has been written, in the above posts, about fairness and natural justice.
    One of the key functions of sport is to reflect this to Society ie sport is a yardstick whereby society can determine how fair/unfair the country/group/body is being run.

    An example – the Romanian Revolution in 1989 where a football match was reported to have been the catalyst for the people’s revolt against Ceausescu.
    What happened – Ceausescu owned a football team that just kept on winning. At a cup final they won, again, through bent refereeing. This was the ‘straw etc etc’.

    Result – Ceausescu overthrown and a new order established.

    Society can only take so-much unfairness before it becomes so blatant that the only solution is revolution. What we see happening in Scottish Football is manipulation and distortion of rules to suit an individual group. The fans (the Wisdom of Crowds?) see this.

    Whatever happens Scottish Football will never be the same again. Whether for better of worse depends on some just men meeting on 4 July.

  12. Stevie C

    I just don’t understand why the SFA don’t follow their own rules, and expel the ‘oldclub’ from membership of the SFA – due to all the illegalities of dual contracts / taking them to court / bringing the game into disrepute, etc, etc…

    This would then take away the issue of the SPL clubs voting, as there would now be no ‘SPL share’ to transfer, due to the ‘oldclub’ being kicked out of the competitions…. Surely?

    Then they really would need to apply for entry to SFL 3 as a proper ‘newclub’! Surely this would be the simplest process, and it makes sure that the integrity (if there I’d any left) of the sport is upheld….

  13. Catherine

    Hi Paul, this is a billiant piece of work and along the same lines as what I have been thinking about in the last couple of days (although you go beyond my simple thoughts and really delve into all the rules and proceedures). I wrote this and although only touching the surface of the points you make, the things I would like you to take note of in this if possible, is the fact that even if they are not deemed as a new entity by the SFA, there is still grounds for other teams to contest the fact that they are because FIFA have already deemed it the case when they handed them the three year exclusion from Europe.

    “The information I will provide at the very end is a segment from the Scottish Premier League membership Criteria for 2012-2013. Now whether ‘Club 12’ is treated as a New-co by the SPL (no official sanctions passing across), or it isn’t (sanctions remain), this document seems to highlight that either way, it could legally be argued that ‘club 12’ is already in Breach of EVERYTHING listed below, especially regarding financial records for the new season. Now the SFA have potentially given Rangers a period of grace with financial records whilst they are in administration (they technically still are for the next four weeks). However the New-co that will be playing next year is legally not the same Rangers. It’s registering all over again. Charles Green said himself that the New-co could not have a vote on matters because it currently wasn’t a football team or a member of the SPL. The vote he will get is the one from old Rangers because technically while the process of admin winds down, they are still operating minimally as a football entity (going by the SFA’s own judgement on the matter). Therefore this ‘period of Grace’ potentially agreed previously with the SFA and Rangers for various matters including finance, WILL become null and void when Rangers as one company ends and Rangers the fresh new company headed by Charles Green begins in around four weeks time.Here’s where it is interesting.Imagine there was no vote in two weeks time. The SFA would then need to enter into a ‘period of Grace’ with that new ‘Club 12’.That would need to be when it officially and fully comes into being around four weeks from now when Liquidation is officially achieved and administration officially ends for Rangers. Now, that is almost four months past the March 31st deadline expected of EVERY other self respecting SFL member to have complied with the membership criteria of the SPL. The original date of March 31st for most of these compliances is the same one that Rangers the existing company failed to comply with for FIFA, therefore ending next season’s hopes of European Football. No period of grace was given in this instance by FIFA, as they wouldn’t bend so easily with granting such leeway to a member, especially one not even technically in being yet, as the SFA would do if pushed to with club 12, if no vote was occuring. What all of this means is that really, right now, going officially by the rules of criteria for membership (as Doncaster loves to do) and the official deadlines as indicated in that document, ‘Club 12’ , by the time it comes into existence in around four weeks time, will have missed EVERY deadline to get their Stuff in order, and they will have missed it by an extraordinary length of time.
    I would be willing to go as far as saying, forget the vote two weeks from now. If you take it out of the equation and pretend it isn’t going to happen, the rest of the facts here are all screaming out at us. Any club in the lower league division one who seeks to gain from these fact presented, could legally (through the court of arbitration for sport) contest this vote being allowed at all. If the SFA say that all sporting sanctions incurred and yet to be incurred, end with the old Rangers, then they are declaring that this is a completely new football team. Even if they don’t declare that officially by ending the link of the old team to these sanctions, there is still case and point for it to be contested in a court of arbitration for sport or to FIFA directly that they are a New football team. This is because ‘Club 12’ the Newco have been recognised as such through their requesting of a new membership to the SPL and their three year European Ban handed out by FIFA.
    Putting voting aside, Club 12 would have clearly been out for a year anyway going by the ‘fit and proper’ criteria and the arguments presented here.Without the vote occuring, they would have actually needed to come back next year and ask for the vote again by the 12 members clubs of the 2013/14 league, as they missed this years SPL 2012-2013 deadlines. The vote of 2013/2014 would then be for admittance into the Scottish game starting at the lowest division or through being parachuted into the top flight with sanctions. After reading all of these criteria, I’m now convinced they will be out for a year but I’m also convinced that what is occurring here could be THE MOTHER OF ALL SMOKESCREENS. The vote drama isn’t as important as the rules in this SPL handbook for membership criteria, for what constitutes a football club to be fit and proper to be a part of the SPL. If I was a select couple of teams (especially one not long relegated from the SPL), who are currently resigned to fate in the SFL, I would be looking at this argument very closely. The new football team simply cannot now meet these criteria. It would be laughable to ‘grant a period of grace, a waiver or a relaxation’, of the rules to a completley new entity to allow it to get all of these criteria in order, almost four weeks from now,when the season is nearly upon us, when current SFL members must comply with such a thorough and strict timeframe in normal circumstances and had to have done so four months ago. It would scream ridiculous preference by the SFA it this argument was placed to them and that was their justification against it. There is perhaps some document, small print or general statement like ‘period of grace, waivers and relaxations’, which Neil Doncaster can draw upon to negate what I have said but by looking at all the facts, I think any such small print/loopholes would be laughable considering what is outlined in the criteria document itself. The new football team SHOULD NOT BE ALLOWED to put itself forward as a viable candidate for admittance to the season 2012-2013. As things currently stand they now cannot be considered as a fit and proper member of the Scottish premier League, parachuted in or not. No vote should be occurring here. It should be a simple case of ‘come back next year please when you have all your affairs in order and by the agreed deadline date’.

    Here is the section in particular that I refer to

    Key Dates
    31 March 2012 – the date by which the Financial Disclosure Requirements must be complied with. NB for SFL clubs this is one month earlier than the date for compliance with relevant SFA National Club Licensing Requirements by SFL clubs.
    31 March 2012 – the date by which the ground which a Club or Candidate Club intends to Register as its Home Ground for Season 2012/2013 is required to meet the Membership Criteria relating to stadia in Rule A2.5.4.
    31 March 2012 – the last date for the making of applications for approval of a basis of tenure or occupation, other than ownership, in relation to a Club’s or Candidate Club’s prospective Registered Ground for Season 2012/2013.
    31 March 2012 – the last date for making an application for a waiver, relaxation or period of grace in relation to all or any part of the Membership Criteria for Season 2012/2013.
    1 June 2012– the last date for Registration of a Club’s or Candidate Club’s Home Ground for Season 2012/2013.
    Any of the above applications and Registration must be made/notified to me in writing not later than the relevant specified date.
    SFL first division clubs are reminded that the above key dates apply whether or not the Candidate Club for Season 2012/2013 has or has not been identified by the relevant date.
    Any SFL first division club which considers that there is the slightest possibility of it becoming the Candidate Club for Season 2012/2013 is advised to make any and all of the above applications which it might require to make in order for it to become a Member of and to play in the Scottish Premier League for and during Season 2012/2013 by the relevant date(s).

  14. Wisdom of Clowns

    Brilliant, insightful analysis as always Paul. Like Catherine I’m thinking that this simply cannot be sorted out by the start of next season and, by bending over backwards to suit the entity formerly known as Rangers FC, they leave themselves open to action by the clubs that stand to lose out, namely Dundee and Dunfermline. Presumably the SFA, UEFA and ultimately FIFA might have something to say about it too…

    I was about to write a convoluted diatribe on why the actions of the SPL are ultra vires, but this may well be totally academic as the SFA appeal panel are surely still to decide whether suspension or expulsion from the game should be the revised punishment for bringing the game into disrepute (if expulsion from the Scottish Cup is not appropriate, bearing in mind what was said above about SFA Rule 66, 94.1). Does anyone know when the new SFA appeal panel is sitting, given the supposed streamlined process brought in at the start of the season was meant to speed up the process? If they judged suspension or expulsion (which now seems pretty likely) then this will certainly have a considerable bearing on the meeting of the SPL in 2 weeks time!

    Someone said earlier that events have been overtaken since Lord Glennie’s ruling, and that is correct to a certain extent, but there is strong evidence to suggest that the ‘club’ still exists in the minds of the SFA and SPL: you need TWO parties to transfer something – both ‘to’ and ‘from’ and the transfer of share is what the clubs are being asked to vote on in a fortnight’s time. Moreover at this moment in time Rangers plc (IA) still clings to existence, albeit without any assets, except – of course – for their share in the SPL.

    Furthermore the Big Tax Case still needs to rule: the company in question is still in existence after all, and the sale of assets to the Green Consortium for such a risible amount may well constitute gratuitous alienation, as a court may well decide. HMRC’s statutory responsibilities to maximise recovery for taxpayers will surely mean that they will seriously consider a gratuitous alienation action.

    As Catherine also said, It would indeed be laughable to ‘grant a period of grace, a waiver or a relaxation’, of the rules to a completely new entity to allow it to get all of the criteria in order, particularly since the new entity – or indeed the old – haven’t exactly bent over backwards to get anything submitted in good time, have they?

  15. krakowdon

    I am surprised that you meekly accept that because there have been fourteen days notice given the SPL must correctly be proceeding to a[n ordinary] resolution requiring 66% to approve the transfer to Mr Greene’s company.

    Article 14 is explicitly clear. Transfer is effected on the basis of a Qualified Resolution requiring 90% approval. I know that on cross referencing the definition of QR and Art37 things get a little bit unclear, but I cannot read the Articles as a whole and conclude that transfer doesn’t need 90%. Therefore they are applying the wrong type of resolution and the meeting on 4th July has not been called on sufficient notice to allow a QR to be determined on that date.

    I also agree with the replies above that losing the entitlement to hold a share must bring with it a loss of entitlement to vote. The Arts are not explicit, but I don’t see how natural justice could allow otherwise.

    These are further points, in addition to yours on which a Judicial Review might be sought.

    • Marching on Together

      That may very well be the case. However, who would actually have standing to bring a judicial review? Certainly not the fans, only another SPL club, or possibly Dundee or Dunfermline.

    • Brian Jeffrey

      I am not so sure that Article 14 is engaged here. I may be wrong but my reading of that is that Article 14 makes provision for the compulsory transfer of a share where e.g. the holder of the share goes bust but refuses to relinquish it. It essentially gives the SPL the power to identify an individual to receive the share in such circumstances, subject to a Qualified Resolution in support of the nominee in question. I don’t think it applies to the transfer of a share in the current circumstances. As I say though, I may be wrong. I do remember being wrong once before!… that was an occasion when I thought I had made a mistake when in fact I hadn’t. (;-).

  16. k

    Hi Paul.
    Just curious. Do paying punters have any lawful or legal rights against clubs and governing bodies.
    Not getting what you paid for,example level playing field, breach of contract? not providing a level playing field
    Struggling to quantify these thoughts.
    Paul?
    Anybody?
    “An example – the Romanian Revolution in 1989 where a football match was reported to have been the catalyst for the people’s revolt against Ceausescu.” Nice HMJ.

    • Marching on Together

      Not really. Remember some Scottish fans taking court action over the Scotland match where the other team did not turn up? Seem, to remember that getting booted into touch by the courts in double quick time.

      The conditions of admittance to football matches basically say that the governing bodies can sh*t on fans from a great height while laughing about it heartily.

      Having said all that, if a club was not doing enough to protect a paying punter from racial abuse say, or if you paid for a seat, found it was occupied by someone else and the stewards refused to do anything about it and you had to stand for the whole game when you have a medical condition meaning you should not stand like that, or in other similar cases, you could sue the club.

      But suing governing bodies? Not even sure if individual fans would have standing to do so.

  17. Why is there always some fine print in the articles to throw it all off into chaos.

  18. ian lewis

    If the SFA panel suspends Rangers from football-say for a season-presumably no vote will be required.

  19. Noaxetogrind

    Fans might consider contacting their own club directors to point out that the SPL seem to be flaunting their own rules as well as the laws of natural justice by allowing the old Rangers a vote on 4th July; and that the new Rangers cannot by any stretch of the imagination satisfy the criteria for membership of the SFA or SPL. Furthermore, fans should highlight the point made by krakowdon above that any SPL vote on transfer of an SPL share ought to be the subject of a Qualified Resolution requiring 90% approval. It might be worthwhile also dropping a line to FIFA making sure they are aware of all the latest developments in this debacle.

  20. Pingback: The 4th July – D-Day or Independence Day – The SPL Vote Re Rangers Share | Random Thoughts Re Scots Law by Paul McConville

  21. Pingback: SPL Meeting – Charles Green Attends on Behalf of Rangers PLC, not Sevco – How? | Random Thoughts Re Scots Law by Paul McConville

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