After last night’s piece in The Times suggesting that Zeus Partners, a business run by Richard Hughes of Zeus Capital, was under investigation with a view to possible prosecution of unnamed parties, there has been extensive debate, not least here on this blog, about what, if anything, this means for Rangers.
The sub-editor who prepared the headline to the article may have over-egged the pudding slightly. To be fair, the article did not suggest any wrong-doing on the part of Rangers but, with a share issue on the way, and with the highly publicised troubles the previous company had with tax issues, it was undoubtedly an embarrassment which Mr Green and his cohorts would rather have done without.
As one would expect, there was a response from within Ibrox. It is only fair to re-produce it here. My comments are in bold.
The Board of The Rangers Football Club has issued the following statement today:
It reads: “The Board wishes to express its dismay over articles in The Times newspaper today which implies the Club is “in fresh trouble” with HM Revenue and Customs in relation to an investor in the Club. This is categorically not the case and the Chairman of the Club has written to The Times on this matter.
“The Rangers Football Club has no outstanding issues with HMRC and indeed the current management have an open and transparent dialogue with HMRC and, in particular, through our auditors and reporting accountants, Deloitte.
One would hope that, as a brand new company with less than six months’ existence, it would not have had time to run into difficulties with the tax man yet (or indeed at all)! Open and transparent dialogue with HMRC is a good thing. Long may that continue.
“The historic tax issues affecting Rangers (RFC 2012 Ltd which is now in liquidation) are well documented.
Well documented, although one will not find too much about them on the archive pages of the Rangers website!
Maybe, once the FTT reports, I can frame a book round it, thus documenting the Rangers EBT issue in no more than 2,000 pages. 🙂
“These issues, notably surrounding the EBT scheme, will continue to receive much media coverage, but have no bearing upon the ongoing operation of the football club and its intention to list as a public company.
The tax issues will have no direct bearing on the football club and the intention of floating. However, indirectly, they will, on the basis that they form part of the debt being pursued by the liquidators, BDO. Their inquiries, investigations, and right to challenge any alleged gratuitous alienation, could impact on the newco. It might not affect the fans who buy shares, but could discourage institutional investors.
However, as Mr Green has predicted a 400% profit for investors at this stage, I am sure such concerns would be dismissed by the money managers with millions at their control. After all, a little embarrassment is worthwhile if it can be traded for a four-fold profit!
“We wish to reiterate that Mr Richard Hughes has no involvement in the management of the club, nor is he a director.
The Times did not suggest he had such a role. Instead, he was described as an important shareholder.
And although he may have no role in the management of the company, two of his colleagues, or former colleagues, Imran Ahmad and Brian Stockbridge, are directors of Rangers. They remain listed on the Zeus Capital website as of today.
“Richard Hughes or his company Zeus Capital, both FSA regulated, are a minority investor.
One would have thought that Rangers would know who the shareholder was – after all, the shares cannot be transferred in a private limited company without the Board’s agreement.
It is true to say that Mr Hughes/Zeus is a minority shareholder. However that is in the sense of not being the majority owner, rather than someone with a handful of shares for sentimental reasons.
“The Club does not have an existing relationship with Zeus Partners, which is also named in The Times as being part of an HMRC inquiry.
No one, including The Times, suggested that there was a current relationship with Zeus Partners. The specifics of the response lead to a simple question. If no existing relationship with Zeus Partners, has there been one which ios now concluded?
“It would be inappropriate for The Rangers Football Club to comment further on either the private and professional affairs of Mr Hughes, or the commercial activities of Zeus Partners or Zeus Capital.”
So the statement does not deny, as would have been very difficult, that there are dealings with Zeus Capital.
One must admire the speed of the Board’s rebuttal, not letting the grass grow on the story. However, the issues with Rangers over recent years, and the proximity of a share issue not unreasonably raise concerns when allegations are made, however tenuous, of financial “chicanery”.
There was no comment in the statement on the allegation in the Times piece that Mr Hughes stood to make millions from the floatation. Perhaps that was because that would be seen as the private or professional affairs of Mr Hughes!
I wonder how pleasant the next partners’ meeting of Zeus Capital will be, if Mr Ahmad and Mr Stockbridge have to raise with the boss of Zeus the effect, if any, this news might have on the share flotation.
And talking of tenuous connections, and indeed one which is undoubtedly a coincidence, as well as this Richard Hughes, there are a number of others of that name listed on the FSA Register. One of Mr Hughes’ namesakes is a financial adviser with Merchant House Financial Services – Merchant House being closely connected with the erstwhile owner, Mr Whyte!
Posted by Paul McConville