Mr Green, who seemed unusually quiet for a couple of days, but was no doubt involved meeting fund managers and investors for his share issue and compiling the Share Prospectus which he told Rangers fans would be out by the middle of November, has spoken out on the official Rangers website about the Big Tax Case outcome.
As the article is written on the official site by Lindsay Herron it is safe to assume, I suggest, that the commentary and narrative around Mr Green’s quotes can also be taken as the “Rangers position”.
My comments on parts of the piece are in bold below the relevant section. It is fair to say that I do not think Mr Green is correct in much of what he had to say (although I am sure that would not concern him one iota).
CHARLES GREEN has expressed his anger and dismay at the timing of the verdict of the First Tier Tax Tribunal as it has massively affected the current status of Rangers.
Despite a concerted campaign from certain quarters, which was often hateful, that decided that Rangers were guilty of “cheating” it has been proved that is not the case.
It is ironic that, after various statements, including one last week, where Mr Green pointed out, quite correctly, that the Big Tax Case related to “oldco” and therefore had no effect on “newco”, the position is that the verdict, no, the timing of the verdict, has had a massive effect on the current state of Rangers. Helpfully Mr Herron goes on to tell us what these effects are.
I wonder where the “hateful” campaigns Mr Herron refers to came from. Will he enlighten us? After all, I am sure many vocal Rangers fans would be delighted to see the club “take on” the culprits blamed for this “hateful” campaign. Mr Green has been very astute so far in cultivating the approval of his customer base. What positives he would gain by “going on the attack”!
We shall see if that possibility is followed through.
The most important aspect of it all, however, is that had this verdict been delivered in May or June then Rangers would:
- Still be a member of the SPL
- Have retained all of their players
- Have received their £2.5million prize money
- Not be hamstrung by a player registration embargo
It is always helpful when an argument is stated in clear terms. Mr Herron does not suggest that these outcomes were possible. Instead, if the case had been decided in May/June, then they “would” have happened.
I respectfully disagree, for reasons I will detail below.
It should be noted, in fairness to Mr Green, that the quotes from him in the piece only back up one of Mr Heron’s assertions. How likely is it though that a reporter, especially one as experienced and skilful as Mr Herron, employed by the club would misquote their own Chief Executive! Not much, I would suggest.
For Charles Green has revealed that a Company Voluntary Agreement to come out of administration would have been successful and the horrors of the summer would have been avoided.
Ironically one of the effects of the “horrors of the summer” was that Mr Green’s group was able to buy the “assets of the company, including its history and trophies” for £5.5 million, and a few months later can proudly boast that they are worth £80 million! The “horrors of the summer” and the spring before them were instrumental in Mr Green achieving his position as Chief Executive? It is an ill wind…and every cloud has a silver lining and other old sayings come to mind.
And after all the coverage, one would have hoped that at least within Rangers they would recall that CVA stands for Company Voluntary Arrangement, not Agreement!
Speaking exclusively to RangersTV he said: “The thing that turned many people against Rangers, quite wrongly in my opinion, was the spectre of EBTs and to have that case awarded in favour of Murray Group has been a substantial step.
How does he mean that people were “turned against” Rangers? Does Mr Green mean potential buyers? If so, he should be grateful to HMRC and to the Tribunal for its long deliberations. In the summer, if a Rangers entity was up for sale, with little or no Big Tax Case liability around it, then it is hard to imagine that a knockdown bid of £5.5 million would have been successful. Maybe the Green consortium would have had to pay closer to the £80 million he now says the assets are worth, and in that alternative scenario, it is possible that every creditor might have been paid in full!
“I think the question is when something was tried in January why did it take 11 months to get an opinion out there?
Mr Green has close contact, I am sure, with his expert legal advisers, both at Field Fisher Waterhouse in England and Biggart Baillie in Scotland. Maybe he could ask someone from the tax or court departments of those firms how a case which involved nineteen days of evidence and ten days of deliberations, and resulted in a 145 page decision, took 11 months to be determined.
Or is Mr Green suggesting some deeper reason for the delay? Is he hinting that, in some way, there were people who had an interest in delaying the decision to harm Rangers Football club? Surely not.
“When you look at the numbers now, Ticketus would have been the single biggest creditor and they were inclined to support the CVA so things could have been substantially different.
And here comes the re-writing of history.
In the Rangers CVA Proposal the unsecured creditors were made up as follows:-
|5.24 A summary of the non preferential creditors is set out below:
|Trade & Expense Creditors||5,544,508|
|Ticketus LLP & Ticketus 2 LLP (―Ticketus‖) (amount of claim to be confirmed)||26,711,857|
|HM Revenue & Customs – Excluding EBT Case and the Discounted Option Scheme Case||18,324,285.42|
|HM Revenue & Customs – Discounted Option Scheme Case||3,052,481.67|
|HM Revenue & Customs – the EBT Case||TBC|
|Supporter Debenture Holders||TBC|
|Football Related Creditors||1,063,082|
Those figures show that the total non-HMRC creditors added up to £33,319,447.
The total HMRC debt, excluding any liability from the Big Tax Case, totalled £21,376,767.09.
Therefore, if all of the creditors except HMRC approved the CVA, and only HMRC voted against, then the CVA would have been “approved”, but not by the 75% of creditors by value to have it succeed. I make it that 60.9% would have been in favour – the CVA would have failed.
In addition, Ticketus were later rejected as creditors by Duff & Phelps. What an exciting legal imbroglio would have occurred if the CVA had been approved thanks to the vote of a creditor who was then declared by the administrators not to be a creditor! That is a hypothetical too far, even for me, just now.
So, all in all, things “could” have been different, but in all likelihood, unless HMRC had changed its mind, it would not have been different.
“What we shouldn’t start getting carried away with is that this club would still have gone into administration. I don’t think there is any chance that this wouldn’t have happened.
I don’t want to go back over the old argument of whether or not the club “died”, or the company failed or what. However, Mr Green’s comment about the CLUB going into administration has been put in there, I am sure, just to entertain those who pay close attention to his words. After all, it was in fact the company which owned the assets of the club which went into administration, rather than the club – is that not the received wisdom now?
“However, when the verdict came out would have changed things dramatically but my job now is to take the club forward.
Mr Green puts things rather strongly when he says that an earlier decision “would” have changed things dramatically. A decision pre-administration in February would not have made a difference a, by that stage, Mr Whyte’s Rangers had accumulated what was stated in the CVA proposal as over £18 million of debt to HMRC, and this was not payable by Rangers, especially after Mr Jelavic was sold, and the money spent on keeping Rangers afloat.
Of course a decision in February who the case ending in January would have been impossible. A decision pre CVA proposal would not have made much difference either.
“If a CVA had gone through we would still be playing in the SPL and perhaps even be playing in Europe.
Well. As I have pointed out, the CVA would not have worked.
If it had, and if Rangers had remained in the SPL, then they would not have been eligible to play in Europe as they did not have the required audited accounts. Mr Whyte’s Rangers never issued such accounts and the administrators did not do so either. Therefore, unless UEFA broke its own rules, especially at a time when it was emphasising Financial Fair Play, Rangers would not have been playing in Europe this season.
I leave it to football experts to comment on whether Rangers would still have been in European competition as we reach the end of November.
“We said from day one that the CVA was our preferred route. It does get you really annoyed to think that all of this hate and all the problems that the fans have had to endure were for no real reason.
No Mr Green. The CVA would have failed anyway. Therefore speculating about all the “hate” the fans had to endure for the CVA’s failure seems a bit odd to be frank. And I suspect that it was the whole financial mess which might have caused people to express disapproval of Rangers. If the CVA had been accepted, does Mr Green think that we would have been able to abolish segregation of fans in Scottish football, as all would have been peace and harmony?
The CVA was clearly the preferred route too, because the deal was that for £8.5 million the Green consortium would take over the existing club. However, the £8.5 million was to be a loan, secured over the assets. Therefore, in a CVA, the Green consortium would be “buying” the whole organisation for a purchase price of zero, and would have received payment of interest on the money lent to the company! Brilliant!
As far as the other effects which Mr Green considers would not have happened if the CVA was accepted – that Rangers would have stayed in the SPL, that it would have retained its players, that it would have received £2.5 million prize money and that there would have been no player registration embargo…where does one begin?
In all likelihood the team would still have been playing in the SPL, so one up to Mr Green.
As regards the players, I am confused. Did Mr Green not proclaim that all the players registrations remained with the club and that under TUPE they were now employed by his company? Was it not the case that he was going to fight the cases of all the players who “walked away” through football’s ruling bodies and ultimately through the courts? Was it not the case that Mr Green proclaimed that all the legal opinion he had seen confirmed what a greater case newco Rangers had? I must have been mistaking him for a different Mr Green.
The SPL prize money was voluntarily surrendered by Mr Green as part of the negotiating process to get an SFA membership. It was clearly felt that, having spent £5.5 million to buy all of the assets of Rangers, but none of the debts, and the assets to include rights to receive over £3.3 million of money due to oldco, Mr Green had some leeway regarding the prize money, and he clearly agreed. To moan about not retaining something he gave up, having acquired it in such unbalanced terms, seems ungrateful. It is a bit like a person finding a winning lottery ticket, and complaining that the jackpot was down that week. Look at the big picture, man!
As for the player registration issue, this was a penalty imposed for:-
- failing to disclose that Mr Whyte was a former disqualified director,
- entering into administration,
- failing to comply with the rules of the PLUS Stock Exchange by failing to disclose to PLUS Stock Exchange the disqualification of Craig Whyte;
- failing to lodge Annual Accounts by 31st December 2011;
- failing to hold an Annual General Meeting by 1st January 2012;
- the non-payment to HMRC of PAYE tax payments and National Insurance Contributions for employees of Rangers FC and VAT; and
- failing to pay to Dunfermline AFC by 21st February 2012, monies due to them for the Scottish Premier League match played on 11th February 2012.
“For me as CEO of Rangers … I have to focus on the future and not on the past. We are where we are. We have said in our presentations and through the business plan that we will do what we said we would do – and what Ally said he would do – and that’s get the team out on the park week in week out and get promotion and work our way to the top division – whatever that top division is called.”
If Mr Green has got “presentations and a business plan” then perhaps the prospectus, originally, base on Mt Green’s own words, due by mid-November, might be winging its way to the prospective investors.
After all, it is easy to do the flowery prose but harder to make a convincing financial case on the figures. For all the undoubted excitement in the City, as Mr Green has told us, at the end of the day these fund managers invest in companies to make money. However I have no doubt that the figures he will produce to the City and to the individual shareholders will match Mr Green’s rhetoric, and indeed even surpass it.
Finally, one wonders if his anti-SPL stance is waning. He comments that the goal is to get to the top division, whatever it is called. Does that mean that if he and the SPL are still there which Rangers get promotion to the top league, he will accept that elevation, despite the vocal protests of the fans?
Posted by Paul McConville