Read the whole piece, which comments on what FIFA and UEFA have said, but I hope he excuses me repeating below the response he got from the SFA.
“Looming large, how can “Rangers” gain league/SFA membership when they cannot produce requisite three years of accounts?
The SFA answer:
” the…policy relates to applications for a new membership. In this case, Rangers Newco will be applying for the transfer of an existing membership held with the Oldco.
Rangers Oldco submitted the necessary financial information for 2009 and 2010. It did not submit for the year 2011, which resulted in the Judicial Panel sanctioning the club a total of £160,000 for various breaches of its Articles of Association, and also imposing a transfer embargo which has been subsequently set aside after the Court of Session ruling by Lord Glennie.”
That is – transferring old to new is not the same as a new club pitching up and wanting in.”
The licence requirements are contained in the SFA requirements on Club Licensing. Part 8 includes the Legal, Admin and Financial Criteria.
Clubs are required to produce:- a summary of financial information covering the reporting year for 2011 and the previous two years i.e. 2010 and 2009 as detailed below. The required information, taken from the annual audited accounts for the years referred to is as follows:-
Wages (Total Payroll Costs)
Wages to Turnover Ratio
Profit or Loss for Period
Net Assets at Period End
Net Debt at Period End
The SFA justification seems to be that there is no need for three years’ accounts because “Rangers FC” have been punished for not producing the accounts for 2011.
There are two relevant aspects of a licensing system. The system is designed to enforce standards. There are therefore certain regulatory requirements that must be fulfilled for the member to retain or obtain a membership.
Separately there are penalties for failure to fulfil the necessary licensing conditions.
The effectiveness of the licensing system is undermined if a participant can avoid meeting requirements simply by paying a penalty. This is why, for example, the penalty for failing to provide a specimen of breath is the same as for failing a breath test!
The failure to provide accounts is merely one part of the “Disrepute” charge. The fine imposed for bringing the game into disrepute totalled £160,000, being the maximum permissible. This covered the following, as detailed in the Statement of Reasons by SFA Tribunal :-
“The Disciplinary Charge 4 is bringing the game into disrepute. The charge then sets out the particular conduct which supports that charge. There were six elements set out.
It should be noted that the Judicial Panel Protocol Paragraph 18.104.22.168 permits multiple disciplinary charges being brought in respect of a single act or omission.
The six elements alleged were
1 failing to procure the disclosure of his disqualification to the Scottish FA by Mr Craig Whyte.
2 failing to comply with the rules of the PLUS Stock Exchange rules by failing to disclose the disqualification of Mr Craig Whyte.
3 failing to lodge annual accounts by 31 December 2011 in terms of s447 of the Companies Act 2006.
4 failing to hold an annual general meeting by 1January 2012 in terms of s336 of the Companies Act 2012.
5 non-payment of PAYE income tax, National Insurance Contributions and Value Added Tax to HMRC.
6 failing to pay due sums to Dunfermline Athletic Football Club by 21 February 2012 in respect of a Scottish Premier League match played on 11 February 2012 pursuant to Rule C.14.5 of the Rules of the Scottish Premier League.”
As regards the penalty the Judicial Panel stated:-
“In respect that the maximum fines which could be imposed by the Tribunal were limited to £160,000, which appears but a small fraction of an ordinary month’s expenditure for Rangers FC, it appeared to the Tribunal that the circumstances of Rangers FC were not going to be significantly affected by any fine which the Tribunal could impose.”
If Rangers Football Club PLC had not entered administration, and had all its assets and business sold off, would it have been granted a new SFA Licence, even though the 2011 accounts had not been produced?
Other conditions include having appropriate Public Liability, Employers Liability, Product Liability and Personal Accident Insurance. The SFA position would appear to suggest that, as long as the club pays a fine for not having these elements, they could get a licence without having them!
In any event, the accounts have been prepared. Reading the Duff and Phelps Proposal 5 April 2012 issued by the administrators we see the following:-
“The UEFA Club Licensing and Financial Fair Play Regulations 2010 require certain confirmations from licence applicants in relation to financial management matters. Amongst the key requirements are that the Club needs to:
Have completed, audited accounts signed off on a going concern basis. Given the uncertainty of the Club’s financial position the accounts to 30 June 2011 have not be signed off on a going concern basis.”
So there are accounts buried somewhere inside Ibrox, but they are not unqualified – which as the company shortly afterwards entered administration is not a surprise!
Has the fine been paid? Is the fine left in the wreckage of RFC PLC, or will Sevco Scotland Ltd pay it?
There was a leak of what was alleged to be the document sent to Sevco Scotland Ltd detailing what information and documents were needed to allow the transfer of the SFA membership to be effected.
This can be seen here RFC Sevco Membership Doc.
The most interesting requirements are as follows:-
Details of the Shareholding of Sevco Scotland Ltd, including all shareholders and financial backers;
The Business Plan of Sevco for the next five years;
Details of all Working Capital Arrangements;
Confirmation of there being no involvement by Craig Whyte, and an irrevocable commitment that he have no involvement;
Confirmation of TUPE Arrangements;
Proposals to pay football debts to Rapid Vienna, Hears, Dundee United and others; and
Confirmation that Sevco Scotland will accept SFA sanctions re the Disrepute case, SPL sanctions re EBT’s and any other sanctions for matters not yet come to light.
On the basis that the SFA requested all of these details, and as it appears that they were produced by the 29th June deadline, one wonders why they have not also been given to the SFL members? Clyde FC have produced a statement tonight which complains, inter alia, about the lack of information provided to the SFL members in advance of Friday’s vote. Maybe this package of stuff would have helped the SFL clubs?
The frantic efforts of the SFA and SPL to keep “Rangers FC” in the second tier of Scottish football continue. It appears that this is all a plan of Messrs Doncaster and Regan, rather than one hatched with Sevco Rangers.
Clearly it is better financially for Mr Green if his team gets into SFL1. But he has kept quiet as he promised he would do.
The issues that face the SFA are numerous.
First of all, the application to transfer the membership will be determined by the SFA Board, which has complete discretion to approve or reject the application on whatever conditions it thinks fit. (SFA Article 14)
Second, the SFA needs to decide whether to approve Sevco Scotland Ltd for grant of a licence, where the conditions regarding the accounts have not been fulfilled.
Thirdly, the SFA Appellate Tribunal will presumably need to be reconvened to determine if the penalty to be accepted by Sevco Scotland Ltd will be expulsion, suspension or termination.
And this all needs to be done, or at worst the first two elements, in time for the season to start!
Posted by Paul McConville