Tag Archives: Smokescreen

Sir David Murray Condemns SPL “Witch Hunt” But Ignores All Criticism of His Board’s Conduct

Sir David Murray reacted to the decision of Lord Nimmo Smith’s Independent Commission in a way which was the lead story in Friday’s Herald.

I have re-produced the statement before, with my comments added in bold.


“Murray International Holdings Limited (MIH) has noted the decision of the commission chaired by Lord Nimmo Smith appointed by the Scottish Premier League (SPL) to investigate alleged undisclosed payments by Rangers Football Club (Rangers).

“The decision not to strip Rangers of titles is satisfying and follows last year’s ruling of the First Tier Tax Tribunal in the long running and much publicised dispute with HMRC.

“The Commission recognised that the purpose of the relevant SPL rules was to promote sporting integrity and that Rangers gained no competitive advantage.

As I have mentioned before, the decision of the Commission was NOT that there had been no “unfair competitive advantage” to Rangers FC through the use of the EBT scheme. That was not considered by the Commission.

Nor did the Commission decide that there had been no attempt to gain an “unfair competitive advantage”.

The Commission did not determine that the players signed and played under the EBT scheme did not provide an “unfair competitive advantage”.

Instead the Commission decided that the “deliberate non-disclosure” of the details of the EBT scheme to the football authorities was in breach of the rules. For the technical reasons about registrations and ineligibility, the non-disclosure was the offence, not any consequent ineligibility.

There was no evidence before the Commission to show them how non-disclosure, on its own, might have provided an unfair advantage. There was no evidence about what other teams might have done, how what Rangers did differed from what other teams did and what effect that would have had.

So, in the absence of evidence the Commission could not find there was an “unfair advantage”.

I appreciate that I already seem to be a lone voice making this point. But it still needs to be made (even though I am sure some commenters here will repeat the line from the conclusion of the Commission saying there was no unfair advantage, without explaining the background).


“However, the Commission decided to ignore well established legal authority on the meaning of ”payment” as set down by the House of Lords in Heaton vs. Bell (Ref: (1969) TC 211) in reaching its decision. The EBT Scheme did not provide for payments from the Club to the players. Instead, the players received loans from independent trustees and the decisions to make those loans were made by those trustees alone. The decision of the First Tier Tax Tribunal supported this.

The FTT and the Nimmo Smith Commission dealt with entirely different matters.

Here the “charges” were of failing to disclose “EBT Payments and Arrangements”. The definition of EBY Payments and Arrangements was as follows:-

Payments made by or for Rangers PLC into an employee benefit trust or trusts for the benefit of Players, including the Specified Players, employed by Rangers PLC as Professional Players, Registered and/or to be Registered as Professional Players with the Scottish Premier League and Playing and/or to Play for Rangers FC in the Scottish Premier League and payments made by or for Rangers PLC into a sub-trust or sub-trusts of such trust or trusts of which such Players were beneficiaries, payments by such trust or trusts and/or sub-trust or sub-trusts to such Players and/or for the benefit of such Players and any and all arrangements, agreements and/or undertakings and the like or similar relating to or concerning any of such Players and payments.

As the above definition shows, the SPL considered that payments by Rangers into the trusts for the benefit of the players and payments into the trusts and sub-trusts of which the players were beneficiaries were covered. The issue for the Commission was NOT about “payments” directly to the players by the club.


“It is entirely erroneous and without foundation to state that a contribution to a trust and subsequent loan from independent trustees of that trust to a player is the same as Rangers making a payment to a player.

And that was not what the “charge” was. If oldco or newco considered that the definition was inappropriate, then this could have been challenged. The Commission decision gives no indication that it was. Therefore the assumption must be that oldco accepted the competency of the charges.  


The problems arising at Rangers brought no credit to Scottish football and have been a tragedy for the Club and its fans. They cannot be condoned. Similarly, however, and as stated previously, efforts to bayonet the wounded are equally unjustified and of no benefit to the Club or Scottish football.

And might Sir David care to comment on what those problems were, or who caused them…

I thought not.

And again we have the emotive “bayoneting of the wounded” argument.

Maybe I am not understanding matters clearly.

The SPL and SFA believed that there was a prima facie case that Rangers had broken the rules. The investigation and hearing led to a decision that Rangers had broken the rules, by way of “deliberate non-disclosure”. It hardly seems to be “bayoneting the wounded” by having a procedure which finds the accused guilty and only imposes a fine which will never be paid!


“Despite knowledge of the existence of EBT arrangements for 10 years, the SPL has never explained why this was only raised as an issue last year.

The attempts to re-write history continue. Many defenders of Rangers delight in pointing out that the EBT payments were in the accounts and therefore the SPL knew about them, or if they did not know enough about them, they only needed to ask. Why should Rangers be penalised for the SPL not asking them about it?

This ignores a couple of factors.

Firstly the accounts disclosed each year a lump sum for payments into the trusts for the benefit of employees. It did not break the figures down into payments for players and non-players. It did not disclose how much each player benefited by.

These were the precise details which the management and Board of Rangers decided deliberately not to disclose. In addition the Commission pointed out that the Board failed to take advice about whether or not they should be disclosed. As I said before, ignorance is no defence and wilful ignorance definitely is not!

Secondly the evidence was before the FTT that there were efforts to obstruct HMRC by way of non-disclosure, it being the City of London Police raid which brought the matter to light, and not full disclosure, or indeed any disclosure, by Rangers.

The Nimmo Smith Commission found that there was non-cooperation with the SPL by the administrators. Prior to that there was clearly no active assistance on this issue either.


The imposition of an irrecoverable fine on an entity which is now in liquidation is futile and only prejudices the ability of existing creditors to recover any money.

What else could the Commission do? Would Sir David Murray have preferred that a non-financial penalty, such as removal of titles be imposed? What about a suspension?

Would he have liked the fine to be imposed on the club and thus on newco?

And the concern for creditors is touching. Maybe Sir David could persuade some of his former players and employees to repay some of these never to be repaid (effectively) loans to the trusts with a request that the Trustees return the money to oldco’s liquidators? That might enhance the ability of creditors to recover money?

In any event the £250k fine won’t make much difference to the pennies in the pound paid to creditors simply because, even after the FTT, the debts run into many millions, and the funds available are only the change left over after the asset purchase at £5.5 million.


“It is saddening that so much time, effort and money has been expended in pursuing a retrospective witch hunt against an entity in crisis, as opposed to seeking to promote and further Scottish football for the benefit of the game and country as a whole.

Maybe the view of the SPL was that, as there was a prima facie case, now proved, that one of the two leading clubs in the country engaged in a policy, which was against the rules, of deliberate non-disclosure for ten years, it was appropriate to take action, rather than just letting it go?

Is it a “witch hunt” when a guilty verdict is imposed and which, at least according to oldco and newco, the verdict is not being challenged?

Sir David’s statement seems to suggest that he disagrees with the verdict too. Maybe he could fund the liquidators in an appeal against the verdict to the SFA?


To conclude, I note that Sir David Murray makes no comment at all in response to the views of the Board over which he presided for much of the time in question. Instead one might say he is seeking to deflect criticism by his talk of a witch hunt and of bayoneting the wounded.

The simplest thing is to leave with the words of the Commission, none of which seem to be disputed, at least according to the statement. (All emphases are added).

We nevertheless take a serious view of a breach of rules intended to promote sporting integrity.

Greater financial transparency serves to prevent financial irregularities. There is insufficient evidence before us to enable us to draw any conclusion as to exactly how the senior management of Oldco came to the conclusion that the EBT arrangements did not require to be disclosed to the SPL or the SFA.

In our view, the apparent assumption both that the side-letter arrangements were entirely discretionary, and that they did not form part of any player’s contractual entitlement, was seriously misconceived.

Over the years, the EBT payments disclosed in Oldco’s accounts were very substantial; at their height, during the year to 30 June 2006, they amounted to more than £9 million, against £16.7 million being that year’s figure for wages and salaries.

There is no evidence that the Board of Directors of Oldco took any steps to obtain proper external legal or accountancy advice to the Board as to the risks inherent in agreeing to pay players through the EBT arrangements without disclosure to the football authorities.

The directors of Oldco must bear a heavy responsibility for this.

While there is no question of dishonesty, individual or corporate, we nevertheless take the view that the nondisclosure must be regarded as deliberate, in the sense that a decision was taken that the sideletters need not be or should not be disclosed.

No steps were taken to check, even on a hypothetical basis, the validity of that assumption with the SPL or the SFA.

The evidence of Mr Odam (cited at paragraph [43] above) clearly indicates a view amongst the management of Oldco that it might have been detrimental to the desired tax treatment of the payments being made by Oldco to have disclosed the existence of the side-letters to the football authorities.

[108] Given the seriousness, extent and duration of the non-disclosure, we have concluded that nothing less than a substantial financial penalty on Oldco will suffice.

Although we are well aware that, as Oldco is in liquidation with an apparently massive deficiency for creditors (even leaving aside a possible reversal of the Tax Tribunal decision on appeal), in practice any fine is likely to be substantially irrecoverable and to the extent that it is recovered the cost will be borne by the creditors of Oldco, we nevertheless think it essential to mark the seriousness of the contraventions with a large financial penalty. Since Issues 1 to 3 relate to a single course of conduct, a single overall fine is appropriate. Taking into account these considerations, we have decided to impose a fine of £250,000 on Oldco.

[109] It is the board of directors of Oldco as a company, as distinct from the football management or players of Rangers FC as a club, which appears to us to bear the responsibility for the breaches of the relevant rules. All the breaches which we have found were therefore clearly committed by Oldco.

Sir David provides no answers to any of these serious allegations. Instead he has, apparently successfully, thrown up the “witch hunt” smokescreen.

Maybe one day he will answer the criticism, but I am not holding my breath.

Is this deliberate misrepresentation of the verdict? Or maybe Sir David did not take advice about the verdict and thus has again fallen into error? Who knows…

Posted by Paul McConville


Filed under Football Governance, Rangers, SPL