Suspicion-The Great Divider
- 13 May 2013
Craig Whyte had control of Rangers Football Club Plc from May 2011. In February 2012 that company entered into Administration. The Joint Administrators from Duff & Phelps conducted an exhaustive search to identify a credible purchaser of the company's business as a going concern. In May 2012 that company entered into liquidation and Charles Green acquired the Club, its history, assets and intellectual property such as brand marks (badges to you and me). In turn, that new operating company of the Club was acquired by Rangers International Football Club plc under arrangements whereby £22million was raised in fresh share capital in December 2012. These shares are listed on the Alternative Investment Market of the London Stock Exchange.
Now let's pause for a moment. How many reading this article agree with what appears in these opening remarks?
What is so difficult about accepting this simple account of events of the darkest period of the Club's history?
Why is there still amongst Rangers fans a deep and irrational suspicion of the factual ownership of the Club?
Why are persons like Craig Whyte and his associates given space in the media to float spurious nonsense over their role in the rescue of a Club when their actions led it to the literal brink of extinction?
Why the continuing vitriol in the direction of Duff & Phelps?
Why the belief that ‘real Rangers men’ will sort this out and the day will be somehow saved, whatever that may mean? I suspect it means different things to different people.
Why are persons tainted by one’s criminal record touted by the press as potential purchasers of a stake short of mandatory takeover proportions with no public documentary substance to their musings?
I wish I had the universally-acceptable answers to these questions.
Let me highlight some weaknesses which are evident in the throes of the present Board fiasco:
- A chairman who has reportedly been asked to stand down twice clings to office. I do not judge whether he is right or wrong.
- Rumour upon rumour, alleged leak upon leak pour from the Scottish tabloid newspapers.
- The appointment of a seasoned newspaper journalist to the post of Director of Communications has brought no obvious improvement to the handling of the Club’s public relations from an outsider’s point of view, in admittedly difficult circumstances.
- An unproven individual strides the scene as interim CEO.
- The most revered figure of Rangers' recent past history, certainly one of the greatest managers the Club has had, threatens to resign from the Board but the messages are conflicting. What exactly is he unhappy about?
The key to all of this lies in one word - suspicion. Suspicion generated by the skeptical and occasionally sneering press is one thing. It is true that an unhelpful atmosphere has been created at times by certain journalists acting on unsubstantiated rumour and plain misleading content. Suspicion generated by persons or fans of other clubs pursuing an anti-Rangers agenda will always be there. However, suspicion generated by avowed Rangers fans whose minds seem apparently closed to fact and reason is not really acceptable any longer. Social network content in abundance constantly erodes confidence and the remarkable efforts of people like Chris Graham, Alasdair McKillop, John DC Gow and others or the balanced journalism of the likes of Richard Wilson is inadequate antidote to the scale of negative sensationalist sentiment.
What stimulates me on a Sunday evening to write this stuff? Well, I'm tired of drivel from outside and equally weary of drivel from certain sections of the Rangers support whose irrational standpoint is totally unhelpful to the Club and its future. Here are some reasons:
- The Club has itself to blame for not effectively nailing the Craig Whyte rumours or John ‘Bomber’ Brown’s insinuations about ownership of the Club's operating company or of its assets.
- Duff & Phelps were advised by leading Scots and English Law specialists throughout. Some may say the extent of advice was costly and over-zealous, but there we are.
- Charles Green's consortium was advised by leading English lawyers initially, and then by leading Scots and English lawyers at the point of acquisition. The company listing on the AIM was also well advised by leading specialist lawyers.
- Charles Green's consortium acquired the Club and its assets, set out above, in fair and open competition. Why do I say that? The Joint Administrators acted in that capacity as officers of the Court, in this case the Court of Session. The basis of their appointment, their reports to creditors, the handling of the Ticketus matter were all subject to report to the Court. It is inconceivable that Duff & Phelps would run the legal risk of contempt of court, the professional risk of disciplinary proceedings or the reputational risk of behaving to less than highest professional standards.
- The AIM document as circulated to potential investors was subject to a process known as ‘verification’ whereby each line in the document is verified by reliable documentary evidence. This is a requirement of the Market - no ‘wing and a prayer’ proposal need apply!
Consider my conclusions:
- Every attempt so far to show that the past operating company or the Club has been in default of statutory legal or other obligations has foundered.
- The Big Tax Case found in Rangers favour. One dissenting opinion from the non-lawyer member of the tribunal team of three created a 2-1 verdict on which appeal could not be denied. Having lost a number of cases with similarity to the Murray / Rangers case, the wisdom of HMRC's decision to appeal is questionable to the layman.
- Lord Nimmo Smith, having been asked to head an SFA Commission on the matter of disclosure of payments, chose to seek evidence separately from the First Tier Tribunal Proceedings. The conclusion of his Commission was that although certain administrative errors had occurred in an extremely small percentage of cases, no sporting advantage had been obtained.
- Neither John Brown, Craig Whyte nor Craig Whyte's questionable associates have produced any documentation whatsoever to underpin their assertions of alternative ownership of the Club or its assets outside of the legitimate ownership by Rangers International Football Club Plc.
- Rangers International Football Club Plc is a listed company. It matters not if Charles Green no longer holds executive office - he is entitled to own shares in what is a company whose shares are publicly listed and publicly traded. The very same goes for Imran Ahmad.
- I very much doubt if a holding measured as £1m in any way entitles an individual to have a seat on the Board, far less act as Chief Executive. A strong, competent industry-proven chief executive is required here, preferably without a shareholding so that independence from self-interest cannot be questioned.
Now we can move to the crux of what is an extremely serious matter:
- The business plan promoted by Charles Green is in danger of being compromised or abandoned by those utterly lacking vision.
- That very business plan attracted professional investors, unaware of how toxic the attitudes to Rangers, and how toxic the attitude of certain sections of the Rangers support, could become.
- Future funding requirements are inevitable as the Club grows back to its rightful competitive place in Scotland and Europe. The vicious, fractious reactions of certain elements of the Rangers support only alienate existing investors and deter other fresh investors.
- The likelihood of the so-called Blue Knights or wealthy individuals like Jim McColl putting up the serious numbers of £millions required is remote.
- The dream of fan ownership suffers too from the sheer weight of funding required to achieve control and fund development. I hope that it can be achieved but it may well be in the lifetime not of me nor of my children but of my grandchildren, in view of the scale of the task. The proportion of new shares made available to fans in the listing promoted by Charles Green should not be underestimated in the context of promoting fan ownership.
So what is to be done?
- First, stop carping about who owns what. The records are clear.
- Second, stop dreaming about what ‘Rangers’ means. It is a Club we love, we follow, and to whom loyalty is enduring. It is a long way from the top and faces a continuing challenge to get back there.
- Third, stop believing that ‘real Rangers men’ hold the answers. Whoever they are, they have no monopoly on wisdom so far as the track record demonstrates.
- Finally, accept that we have a variety of professional, institutional and supporters as owners, all of whom, for the sake of personal interest, wish to see the Club and the team on the pitch succeed as the catalyst of future economic self-sufficiency and success.
See you at Ibrox for the unfurling of the Div 3 flag at the start of the Div 2 campaign!
David Kinnon is a Chartered Accountant and licensed insolvency practitioner. Views expressed are entirely his own.