In which I look at Mr David Leggat’s explanation of how a conviction of Craig Whyte (should there ever be a prosecution) means that the last two years did not happen, and I respectfully disagree with him.
I also remind readers that, in October 2011, I identified who could stop Craig Whyte, and indeed how they should do so, but also why it was never going to happen.
And possibly I explain or debunk some of the numerous myths which have accumulated around this saga.
There is a natural human tendency to look on the bright side; to think that, no matter how bad the situation is, it will improve. This is one of the factors which explains the domination of the planet by the human race, and many amazing feats of endurance and survival, facing the greatest odds.
So when someone or something close to one’s heart is threatened, there is almost a default reaction of “it will be all right”. Sometimes it requires the construction of elaborate means by which the happy outcome will be achieved – this being part of the process of keeping one’s spirits up.
Yesterday saw such an effort from that mater of the “inky trades” Mr Leggat. He is a man with many decades of experience at the sharp end of the newspaper industry and someone whose qualifications in that field are clear.
However, when it comes to legalities, I would like to think that my understanding is slightly better than his and therefore, a public service, I thought I would correct some of the misapprehensions in yesterday’s story. After all, if one is looking for a scenario to keep hope alive, better to have one that is realistic, rather than one which collapses at the first puff of analysis.
So what was Mr Leggat’s thesis? I have not re-printed the full piece, but instead have given some extracts and have summarised the thrust of his argument. Part of this is because some comments he makes could have the potential for incurring legal liability, and I do not want to repeat them. As the whole piece, and the “with one bound, Rangers are free” scenario is based on Mr Whyte ending up in gaol, then one might surmise at whom the possibly offending comments are directed.
According to Mr Leggat, “the net is closing in” on Mr Whyte. He states that one police investigation into Mr Whyte is nearing its end, with only Mr Withey, former Company Secretary at Rangers, and Mr Whyte himself to be interviewed.
Mr Leggat refers, melodramatically and, as far as I am aware wholly wrongly, to Mr Withey “going on the run”. That might be a surprise to the firm in London with whom he has been acting as a consultant since leaving Collyer Bristow!
We then have a suggestion, forming part of lessons taught to young reporters many years ago in spicing up a story with juicy metaphors (can you spice something up with juice?), that “the metaphorical noose tightening on Craig Whyte’s guilty neck”.
Now I am sure that, even in the last century when Mr Leggat learned his trade, his “inky” trade, he might have been told about the presumption of innocence. This is especially so when Mr Leggat does not tell us what alleged crime is actually the subject of this alleged investigation!
Mr Leggat then dismisses the recent Sevco 5088/Sevco Scotland/ Switcheroo allegations as an attempt by Mr Whyte to “muddy the waters” by “launching a raft of allegations”.
I think that rafts, normally floating on top of the water, would only muddy the water is something was going wrong – perhaps that is what Mr Leggat means?
Quite how the circumstances of Mr Green’s acquisition of Rangers exculpates Mr Whyte from any alleged wrongdoing in his purchase of the company is sadly not explained by Mr Leggat.
And now Mr Leggat jumps into Dr Emmett Brown’s De Lorean!
But what if Taggart does snap the handcuffs on Craig Whyte? What if the Crown Office proceeds with a prosecution? What if Whyte is found guilty of perpetrating a fraud in order to buy Rangers?
And thus a whole scenario, akin to Rangers finding a TARDIS, or to Rangers Football Club stepping out of the shower in a Bobby Ewing manner, is created.
Mr Leggat quickly looks at the outcome of the Ticketus v Whyte case, commenting that the decision there would make it easier for Crown Office to secure a conviction. As I intend to write about fully, the decision means nothing of the sort. The outcome of that case has no relevance or bearing on any criminal proceedings which might be instituted against Mr Whyte.
And so let’s enter the time machine with Mr Leggat:-
So, let’s fast forward to later this year. Craig Whyte is lifted. Now let’s fast forward again, this time to the early part of next year. A High Court Judge tells Craig Whyte he has been found guilty of perpetrating a massive fraud on one of Scotland’s most venerable institutions, adding that legally Craig Whyte never owned Rangers and that the Rangers shareholding should revert to the position it was in, in April 2011.
Or, to put it succinctly, and in a manner an old inky trade practitioner would recognise, BALDERDASH!
For one thing, if, and it still remains a very big if, there are ever any criminal proceedings arising from the various Rangers takeovers, the chances of them coming to a conclusion “early next year” are non-existent.
It is notorious that, in the UK, criminal proceedings relating to alleged corporate wrongdoing take many years to come to court, if indeed they ever do. It was seen in the UK as remarkable that the criminal proceedings regarding Enron in the USA came to a conclusion with convictions so quickly.
Should anyone be prosecuted in connection with the Rangers debacle, then it is perfectly possible that a trial might not commence until 2015! And even then, with procedural challenges, with the additional issues involved in choosing an impartial jury, with the prospects of appeals, any proceedings could run for years.
Mr Sykes, a colleague of Mr Whyte’s in Vital Security, which went into liquidation in 1995, was convicted and imprisoned in 2000. The sums involved in that company were around £500,000. The sums involved at Rangers run into tens of millions.
Even if, in Mr Leggat’s dream world, Mr Whyte was convicted of something, then the judge would be highly unlikely to make any comment regarding (a) Mr Whyte’s ownership of Rangers and (b) what should happen to the Rangers shareholding. Those are not matters of concern to a criminal court and such comments, if made, would have no legal value at all.
In fact, of course, Mr Whyte never owned Rangers. His company, Wavetower Ltd bought 85% of the shares in Rangers Football club PLC from Murray International Holdings Ltd (not from Sir David Murray).
Wavetower Ltd was owned 100% by Liberty Capital Ltd. Liberty Capital Ltd was said to be a company owned 100% by Mr Whyte.
And, as we have seen in the tortuous explanation of what Mr Green’s consortium actually bought, Wavetower only purchased 85% of the shares in the company which owned the assets and business of Rangers Football Club!
So Mr Whyte never “owned Rangers”. But Wavetower Ltd did, to the extent of being the majority shareholder.
Could a court order that Rangers shareholding revert to where it was in April 2011?
No. It could have, as I will mention below, but not now.
Mr Leggat kindly says he would leave it to the lawyers to work out how, in such a scenario, to come “to an accommodation with those who are the current shareholders.”
That would involve, even on Mr Leggat’s fantasy island solution, substantial, lengthy and lucrative expensive litigation.
Mr Leggat then goes on to wonder how such a decision would affect the football world.
At a stroke it would nullify any crime committed against the law of the land or the rules of the football authorities during the period when Craig Whyte laid … claim to owning Rangers.
So, no problem for Rangers with withheld PAYE and VAT, meaning no Administration. So, no ten point deduction by the SPL in February 2012. An action which gifted Celtic the title last season.
One can only admire Mr Leggat’s “glass half full” approach.
However Rangers Football Club PLC went into administration as it could not pay its debts, which, even ignoring the Big Tax Case, included the Wee Tax Case and the unpaid VAT and PAYE accrued under Mr Whyte. And this is the key point which has been missed or deliberately ignored. No one has suggested that the with-held taxes were pocketed by Mr Whyte or by anyone else and spirited secretly out of Ibrox in Swag bags.
I will say it clearly – THE PAYE AND VAT WHICH RFC PLC FAILED TO PAY UNDER MR WHYTE KEPT THE COMPANY GOING UNTIL ADMINISTRATION AND UP TO THE SALE TO SEVCO (Insert correct Sevco title here).
So, there was an administration, and it was not caused by the company being left bereft of funds due to theft from it. When Duff & Phelps took over in February 2012, there was around £3 million still in the company bank. Where did that come from in a business losing well over a million pounds per month?
Sadly for Mr Leggat the administration does not disappear. But even if it did, what does he suggest should happen? Even if the 10 point reduction was cancelled, they still finished 10 points behind Celtic.
Or maybe Mr Leggat suggests that the season 2011-2012 should be replayed from February onwards?
And no Liquidation. Leading to no need for Rangers to apply for the transfer of their SPL share from Oldco to Newco and the SPL’s subsequent refusal. Meaning Rangers should have been competing in the SPL this season. Something which would also cast doubt on Celtic’s second successive title.
Sorry Mr Leggat. Liquidation became inevitable once the true Rangers men about whom you take so often failed to step up and pay to save the club they so dearly loved, leaving a man whom you dubbed a “snake oil salesman” before changing your tune, to swoop in and buy £100 million of assets for £5.5 million!
Does Mr Leggat suggest that we re-run season 2012-2013 as well, but with Rangers in the SPL? The extra games might help the bank balances of the various teams affected!
And then there is the matter of the Five-Way Agreement which saw Rangers have to go against a Court of Session judgement and accept an SFA transfer ban which had been declared unlawful and to give up their £2M SPL prize money as a condition of being granted a licence to play by the Scottish Football Association, a licence they would never have lost had they not gone into Liquidation, something which would never have happened had Craig Whyte not been laying an illegal claim to owning Rangers.
As I have explained, at some length, the transfer embargo was ruled ultra vires of the disciplinary body, however, before granting a licence, the SFA could impose any conditions it though fit. And is Mr Leggat seriously suggesting that it would have been fair to allow a company which had paid £5.5 million for £100 million of assets to pocket immediately over £2 million prize money, thus meaning that the purchase cost Sevco only £2.5-£3 million?
Sadly I think he is.
Mr Leggat concludes:-
Therefore, should Craig Whyte be nicked and found guilty of perpetrating the fraud on Rangers, which former director Paul Murray has again recently stated he believes is what happened, the Scottish Football Association and the Scottish Premier League would be in a pickle. In fact they would be up to their necks in a pickle.
What should the football authorities do? Order replays? Get the Pools Panel to decide who would have won games which were never players? Rewrite the present season pretending that Rangers were in the SPL?
It has been mentioned before that, in some way, the SFA and SPL would be financially liable to “Rangers” if there had been wrongdoing by Mr Whyte? Why?
Even if Mr Whyte did perpetrate a fraud, which he vigorously denies, he did not defraud “Rangers”. The purchase extinguished RFC PLC’s bank debt and apparent errors by Ticketus’ lawyers meant that they did not have a secure asset, merely an unsecured debt.
If there was any “fraud” the one person who could complain was Sir David Murray (or more correctly his company) as the seller.
And here is the sting in the tail under which at least some of Mr Leggat’s fantasy could have come true – under the sale agreement between MIH and Wavetower, the seller, MIH, had the option of reversing the sale in Wavetower did not fulfil certain conditions.
Wavetower did not fulfil the necessary conditions.
In hindsight Sir David could have averted all of the administration issue if he had intervened when he had the chance.
Bizarrely I suspect that Rangers fans would have risen in revolt at his return then, although now I am sure that, post Green and Whyte, they would welcome him, or some would, with open arms!
So, I am sorry for bursting the Leggat bubble, but his fantasy yesterday will sadly remain something in his dreams only.
Posted by Paul McConville