Back in the ancient past (2010) when first stories started to appear about the tax issues faced by the Murray International –owned Rangers, and on into 2011 when the Rangers Tax Case blog first saw the light of day, stories about the financial, legal and regulatory aspects of Rangers Football Club appeared every couple of weeks.
RTC could post a blog explaining about the ongoing tax sage, and know that there might only be a need, and even material, for another two or three posts that month.
As time went on the pace of news and developments quickened.
Now we are at the stage where hardly an hour goes past without some new legal issue arising, or some further stage in the fight for control of the assets and business of the Rangers Football Club. All of that means that even professional news organisations sometimes either miss stories completely, or do not have the time for detailed analysis, as something new happens and the original report is overtaken by events. And if it is hard for a professional new operation, how much more difficult for a lone individual who does this as a hobby!
Last weekend gave a perfect example.
In quick succession the following happened:-
Mr Mather led a meeting with representatives of Rangers-supporting organisations. He reported on his discussions earlier in the week with Dave King.
- On last Saturday Rangers official website announced that Mr King was returning as Chairman and statements from both Mr Mather and Mr King confirmed this.
- The reaction seemed very positive from Rangers fans and most of the press coverage too was in favour.
- However, following that news, various people wondered publicly how Mr King could take a place on the PLC Board in light of the SFA “fit and proper person” test.
- This, in turn, prompted even more glee from Rangers fans, on the basis that anyone looking to find reasons why Mr King should be barred from coming back to Ibrox was clearly, by definition, worried about it. The news therefore had been encouraging to Rangers fans for its own sake but also for how much upset it caused to the “Rangers haters”.
Of course this all was overtaken by what then happened.
- On Monday Rangers, at the insistence of its Nominated Adviser, “clarified” the statements about Mr King. He was not coming back to Ibrox as PLC Chairman. He maybe could join the “football board” but nothing had been decided. And the comments about there being no “immediate” need for a financial injection but that he would lead a fund-raising exercise now was also “clarified”.
- Later on Monday Lord Tyre deflated the Rangers CEO by ruling that the AGM set for 24th October could not go ahead as a result of the unlawful failure by the Board to allow resolutions on to the agenda about appointment of new directors.
- On Tuesday Mr Mather resigned along with Mr Smart.
This meant that some thoughts I had jotted down on the bus at the start of the week about Mr King have failed so far to see the light of day. So here goes.
Why should supporters of other teams, or “Rangers haters” as they are called by some of the Ibrox persuasion, fear Mr King’s return?
The logic expressed by Rangers fans online seemed to be as follows:-
- Mr King is a true blue Rangers fan.
- Mr King has previously invested £20 million of his own money into the Murray-owned Rangers.
- Mr King lost every penny of that investment when Rangers Football Club PLC went under.
- Mr King has reached a deal with the South African tax authorities which clears his name (more about this in a post to come).
- Mr King can now devote lots of his money to making Rangers great again.
- Mr King is not aligned with the Rebels or the Board but would be joining to make the lion lay down with the lamb and to encourage dogs and cats to play together in harmony, united against the common enemy (and the “common enemy” is any one or more from the following list: Celtic, Aberdeen, the SFA, the SPFL, the BBC, the Daily Record, FARE, the SNP, Dundee United, anyone who refers to Sevco, Craig Whyte, Charles Green, Imran Ahmad …. The list continues on and on and on …)
But that analysis, seen very much through blue-tinted spectacles, fails to see actually what Mr King (a) has done for the previous PLC and (b) what he is position to do for the present PLC.
First of all, Mr King was a director of the old PLC from 30th March 2000 until 1st June 2012. This covers the period when, under Sir David Murray, the tax schemes which led to the Big Tax Case and the Wee Tax Case were entered into. It covers the period when Rangers ran up huge debt. It covered the time when the bank insisted on having its own representative on the board, leading to the then manager, Walter Smith, saying that the bank ran Rangers. It included the time when Mr Whyte’s company bought the Murray-owned shares. It included the time when Mr Whyte stopped paying tax bills and put the company into administration. It even takes in the point of liquidators being appointed.
That, with all due respect to the undoubted business skills of Mr King, is not a great track record!
His proponents would say that it was only his need to deal with the long-running tax dispute with the South African Revenue Service which took his attention away from Ibrox. But Mr King is not simply a wealthy ex-pat, living a life of luxury on the Cape and wondering how to spend his millions. Instead he is a high-profile businessman in South Africa with successful businesses there in which he plays an active role.
There seemed to be no suggestion in the now amended statements from him and From Mr Mather that he was giving up these interests to come to Scotland and once here to devote his attention to Rangers.
Ah, the Rangers fans would say, he is loaded, so he can put lots of money into Rangers now.
Maybe he would, and indeed his statement indicated a willingness to invest now. But here comes one of the fundamental issues, at least in Scottish football, which makes it difficult for the fans ever to love their club’s owners.
Rangers fans would love Mr King to come back to Ibrox and to invest £20 million again in the company. (Not to buy out an existing shareholder, as none of that cash goes to the company, but rather to buy newly issued shares.)
Businessmen, and especially successful businessman, do not achieve great wealth by wasting their money. If they invest it, unless in a total vanity project (which Mr King’s involvement previously might well have been), they want to make a profit.
Football fans do not want their teams to make profits, or if they do, they do not want the shareholders taking out the profits in dividends. Instead they want any profits “re-invested” in the football team, either to buy new players or retain existing ones by offering better terms.
If Mr King is prepared to make such a substantial investment again, purely as a vanity project, then good luck to him, but that seems highly unlikely to me.
And if he wants a return, then he needs Rangers to make money (which it never, or rarely, did in his previous time there, despite league success and European football.)
So, apart from dropping £20 million into the Ibrox black hole, what else did he do for the oldco? Not much, it seems, due to his South African distractions.
So, going forward, how can he help newco?
His business interests are in South Africa. Whilst he clearly knows business people in Scotland, if he was to be leading a fund-raising exercise his personal connections are likely to be based closer to Johannesburg than to Johnstone!
He would not be coming to take an executive role, and even if he was, he has no relevant experience in the running of a football team. And his connections in Scottish football will, whilst being a lot better than most, will in fact be pretty poor in comparison with most people in and around the boardrooms and corridors of power of Scottish football.
The final expectation, that his return would signal peace, has also gone by the wayside. There has been little or no sign of harmony between Rebels and the ever-dwindling Board.
Mr King declared himself not to be taking sides – that now makes it hard to go into one camp or the other.
And after all of that, there remain the regulatory hurdles for him to scramble over. Would he be classed by the SFA as “fit and proper”?
(The answer to that last question is, I believe, “Yes”. But not because of the careful forensic analysis which the SFA would undertake but because only Craig Whyte has the distinction of being denied that status. Mr King, for example, had the tax issue hanging over him for almost all of his Ibrox tenure and yet the SFA never considered him not to be “fit and proper” even when he was being criticised by a South African judge in the strongest terms.)
So, if Mr King comes back, should this cause fear in the hearts of the “Rangers-haters”?
Posted by Paul McConville