Mark Daly of BBC Scotland has produced another chapter in his revelations regarding the events surrounding the administration of Rangers Football Club PLC. Following his two previous programmes, and his Scottish BAFTA nomination, he was on Reporting Scotland tonight.
The details can be read on the BBC website here.
The story tonight was based upon recordings made by Craig Whyte in a meeting with David Grier of Duff & Phelps. If Mr Whyte has been regularly taping meetings and calls in this process, one wonders if there might be people, in addition to Mr Grier, who are rather worried tonight.
Mr Daly’s previous programme in May prompted the issue of a statement by Duff & Phelps. The article, which was on the official Rangers website here – http://www.rangers.co.uk/news/football-news/article/2786614 – is no longer there.
However, I have a copy of it and the relevant extracts are below. You can read the full statement, and my comments on it here – https://scotslawthoughts.wordpress.com/2012/05/26/some-questions-for-david-grier-and-the-administrators-of-rangers/
David Grier, who was the engagement partner at MCR, said: “I categorically deny that at the time of the Craig Whyte takeover of Rangers, I had any knowledge that funds from Ticketus were being used to acquire the Club. This accusation is wrong, highly defamatory and betrays a lack of understanding of the facts.
“Financial due diligence and other work was provided by Saffery Champness, a firm of chartered accountants who specialise in this area, and our primary role was to provide assistance to Liberty Capital in negotiating a settlement and assignment of the debt due to Lloyds Bank.
“The reality is that when my concerns about the use of Ticketus funding crystallised over the summer of 2011, I took immediate steps to raise these concerns with controlling directors of Rangers and HMRC.
“I had no direct contact with Ticketus prior to the takeover by Wavetower, however we were aware and were party to discussions regarding Ticketus as a recognised source of short term working capital that was used by the Club and that could be a source of such continued funding. These discussions are well-minuted.
“As we were not aware of the nature and extent of any arrangements for season ticket sales we were unable to provide specific advice without full detail and our letter of 7 April 2011 is clear on this point.
“Indeed we state in this letter that we had not had access to documents or knowledge of contractual terms either of any proposed ticketing agreement or proposed purchase from the Murray Group and as a consequence we could not provide further advice without this detail. We did not receive further information and therefore we could not provide further advice on this matter.
“We were provided with a copy of a draft email to Ticketus dated 19 April 2011 that mentions the possibility of raising funds, but does not provide any information of quantum or terms of such a proposal. To suggest this email establishes an awareness of Ticketus providing acquisition funding is absurd and ridiculous.
“It is clear now, with the benefit of hindsight, that material information was withheld from us, and others, prior to the acquisition of the Club and, once we discovered the full extent of the funding relationship between Ticketus, Liberty Capital and the Club, we took immediate steps to raise our concern with controlling directors of Rangers and HMRC.
“Throughout this process we have acted professionally and provided opinion and recommendations to avoid an insolvency of the Club by outlining alternative courses of action to the directors. We did provide the controlling directors and company secretary of the Club with our written concern that failure to meet their statutory duties could lead to a claim of wrongful trading, however the controlling directors and company secretary always maintained that insolvency could be avoided through the introduction of new capital and/or fundraising with supporters of the Club.”
Last week, in a BBC interview, Mr Whyte said that “everybody who was involved in the deal team at the time knew about” the Ticketus deal.
He added: “They (Duff and Phelps) knew everything, they attended meetings, they were copied into all the emails, they were there on the day of completion. They knew from the start.”
That claim prompted Rangers’ joint administrator Paul Clark, of Duff and Phelps, to respond: “The allegations against the administrators, who are officers of the court, are false, malicious and without foundation.
“In addition, as administrators, we instigated legal proceedings against Mr Whyte’s solicitors (Collyer Bristow) in the High Court in London and those proceedings are centred round the very serious allegation that Mr Whyte was involved in a conspiracy which deprived Rangers of many millions of pounds.
“Our conduct of the Rangers administration has been the subject of intense public scrutiny and we are wholly satisfied it was carried out to the highest professional standards.”
The recording by Mr Whyte took place, the BBC understands, on 31st May, after the detailed statement referred to above was issued. The transcript on the BBC website reads as follows:-
During the exchange, Mr Grier said: “I’ll tell you what we’re doing with that just so you…
Mr Whyte: “Yeah.
Mr Grier: “We, we went to see counsel yesterday and had a full sort of debrief of all the email correspondence.
Mr Whyte: “Yep.
Mr Grier: “Now, the fact is that we probably did know what was going on with Ticketus. There’s no email traffic whatsoever.
Mr Whyte: “That says that you did?”
Mr Grier: “That says that we did.
Mr White: “But we all know that you did and f****** hell.
Mr Grier: “Yeah, yeah. There’s no…we were not involved in dealing with Ticketus directly.
Mr Whyte: “Yeah. So you knew the structures of the deal. You were dealing with Lloyds.
Mr Grier: “Absolutely.
Mr Whyte: “And the Ticketus part was Saffreys.
Mr Grier “Yeah. So we’ve maintained that line quite rigorously.”
Where does this leave matters?
It suggests that Mr Grier’s position was that, in the absence of an email trail, D&P was happy to deny any knowledge of the Ticketus deal, despite being fully aware of it.
Having spent the last few months denying any wrongdoing, and insisting that D&P carried out its work to the “highest professional standards” this comes as, at the very best, a huge embarrassment to the Insolvency Practitioners.
D&P are due in court any day now regarding the liquidation of RFC 2012 PLC. As we know Lord Hodge called for, and is understood to have received, a report following the last Mark Daly programme, which report by D&P was to address the possible questions of conflict of interest.
The suspicion is that the report produced to the court has not led to any indication that the issue has been concluded. If it had been, then undoubtedly D&P or their media reps, Media House, would have been trumpeting this from the roof tops.
Indeed, as D&P threatened legal action against the BBC following their programme in May, if they had been given the all-clear by the court one would have expected litigation to have ensued already.
This is not to suggest that the court has found anything wrong in D&P’s antics, but that they have not been exonerated yet either. One does not imagine that Lord Hodge will be delighted to hear the latest allegations.
In the event that the report lodged with the court is in conflict with what is now seen to be the position, then we may see the relevant partners in D&P being summoned to appear in the Court of Session to explain the apparent discrepancies.
Might this lead to a delay in the liquidation process, or to an unravelling of the sale to Sevco?
No. In fact it might accelerate the process as the administrators’ position is ever more untenable. With BDO revving up to take the liquidator role, it makes sense for the administration to end and the liquidation to start as soon as possible.
This is especially so where the assets administered by D&P were all sold off in June. Since then the administrators have been sitting looking at the ever dwindling bank balance from the asset sale to Mr Green’s company.
The asset sale too is only likely to be affected by BDO alleging that the sale was at an undervalue and that, in terms of the Act, there has been a “gratuitous alienation”. If they make that allegation, then it is for the purchaser to establish that “adequate consideration” was paid, and not for the liquidators to prove there was an under-valued sale.
Questions about the bona fides of the administrators can only help any argument by the liquidator that there was a “gratuitous alienation”.
It is possible that the court could refer the matter to D&P’s regulatory body.
For all the money received in fees, one wonders if any partners in D&P wish they had never come across Mr Whyte and Rangers?
In May 2012, in the piece linked to above, I posed a number of questions for Mr Grier and Duff and Phelps. As far as I am aware, none of them have been answered yet. Mind you, only five months have passed…
As one expects D&P to come out with some statement, maybe a gentlemen or lady of the press could ask D&P for answers to the questions?
What were D&P told by Craig Whyte about sources of funding in the period from January 2011 to April 2011 when D&P was negotiating with the Bank re clearing Rangers debt?
If it was D&P’s primary role to provide assistance to Liberty Capital in negotiating a settlement and assignment of the debt due to Lloyds Bank, what was its secondary role?
When did Mr Grier’s concerns re Ticketus crystallise?
Why did he speak to HMRC about these concerns?
Why did he speak to the “controlling directors”, who one assumes were the people involved in what concerned him? After speaking to them and HMRC, why did D&P continue to act? Presumably his concerns were allayed?
Did Mr Grier have indirect contact with Ticketus, or did anyone at D&P have direct contact pre-takeover? What about post-takeover? Did discussions to which D&P were party regarding Ticketus involve Ticketus?
Did D&P provide written advice re HMRC pre-takeover?
Why does the Report to Creditors make no mention of D&P being engaged pre-takeover to give advice re HMRC and regarding the effect on insolvency of a funder of season tickets?
Was the alleged Collyer Bristow letter the only information seen by D&P showing that Mr Whyte had access to £33 million?
Did D&P give any advice to Mr Whyte regarding the wisdom of his purchase, bearing in mind he was asking about insolvency prior to spending £33 million on the purchase?
Did Mr Grier read the 19th April email referred to by the BBC? If he did, was his curiosity not piqued by reference to “Ticketus agreements” (plural)?
How could financial projections show that money was coming from Wavetower, which had no money?
What did HMRC do about Mr Grier’s concerns?
Mr Grier refers to discovering the FULL extent of the funding relationship with Ticketus. Did D&P know part of the funding relationship previously, or the nature but not the full extent?
Did the cash flow projections prepared by D&P post takeover include reference to Ticketus, either in terms of short-term funding, or the £20.3 million “understood” to have been paid? If not, and as the forecasts were, inter alia, for the purposes of negotiating with HMRC, was false or incorrect information provided to HMRC?
Is the invoice referred to in Mr Grier’s email dated 24th June the same as those referred to in Rangers Financial Controller’s evidence to the SFA Judicial Panel, namely the multi-million pond invoices to Ticketus which were completely unknown to the Financial Controller, and were prepared using clip-art?
If Mr Grier was preparing invoices for Rangers to Ticketus, how is this covered in the statement in the Report to Creditors of what D&P did prior to appointment as administrators?
If Mr Grier was preparing invoices for Rangers to Ticketus in June dated May, how did it take him “over the summer” for concerns to crystallise?
Why do Mr Grier and D&P consider there is no conflict of interest?
Whilst D&P were assisting Rangers with short-term cash flow projections, £3 million was paid to Ticketus. Did Mr Grier make enquiries as to what this related to?
Could he or his colleagues prepare forecasts and projections without knowing the nature of the payment to Ticketus, and further liabilities to them?
By August 2011, D&P was monitoring cash flow and discussing capital raising. Had Mr Grier’s concerns crystallised by then?
Posted by Paul McConville