Tuesday, April 19, 2011
The Independent Sub-Committee of the Board of Rangers Football Club plc wish to clarify certain media comment and speculation relating to its position with respect to the proposed transaction amongst the Murray Group, Craig Whyte and the Lloyds Banking Group.
We have fiduciary duties to look after the interests of all the stakeholders in the Club. In particular, we have legal responsibilities to ensure that the proposed transaction serves the best interests of the 26,400 minority shareholders, many of whom are season ticket holders.
For some time the Board has had major concerns about its engagement in the process. After nearly six months of negotiation, we have only very recently had the opportunity to meet Craig Whyte and his team. Moreover, it is only in the last few days that we have started to receive the draft agreements outlining the transaction, although we are still awaiting a detailed working capital statement demonstrating that there is sufficient funding in place to meet the pressing needs of the Club.
Based on the documents we have only been able to review within the last week, we are disappointed that they ultimately did not reflect the investment in the Club that we were led to believe for the last few months would be a commitment in the purchase agreement. Given the requirement to repay the bank in full under the proposed transaction, there appears to be only a relatively modest amount of money available that would positively impact the Club's operations, especially as it relates to an urgent requirement to replenish and upgrade the playing squad. Whilst the proposed transaction has addressed the interests of Lloyds Bank, the Murray Group and Craig Whyte, our perspective is solely directed towards the future of Rangers Football Club.
To this end the Board has had an approach from one of its directors who wishes the Board to consider an alternative funding option. This would involve a fresh issue of new capital to raise £25m to be invested directly into the Club. The Board believes that it has a responsibility to examine this proposal whilst continuing its review of the Craig Whyte transaction. After six months of limited engagement in the process, the Board believes that is not in the best interests of its stakeholders for it to be pressed into an unrealistic timescale.
On Monday, I had a lengthy conversation with Craig Whyte explaining the dilemma that the Board now faces. It was a constructive and healthy dialogue, and whilst he expressed his frustration, he understood our position. We agreed to remain in touch in terms of working towards a resolution that is in the best interests of all parties involved as we receive more information relating to his financial commitment to Rangers Football Club.
Alastair J. Johnston
Chairman of the Independent Sub-Committee
Board of Rangers Football Club
MUCH concern has been expressed in Scotland at the growing financial problems faced by Rangers over their involvement with employee benefit trusts (EBT), established to make payments to players and it seems club officials without incurring income tax or national insurance. The beneficiaries of the EBTs obtain loans which are not taxable and probably never repaid.
HMRC is now challenging the trusts and the Glasgow club faces demands for back tax, interest and penalties of possibly up to £50m if it loses the tax case.
EBTs were much favoured by football clubs, particularly for foreign-born players and those on the highest salaries. But the taxman has been clamping down. Many trusts were found not to work because they had not been properly operated. In Rangers’ case it appears that the payments by the club into the EBTs may not have been structured tightly enough to justify the necessary claim that the loans made by the supposedly independent offshore trustees were discretionary, not contractual, and thereby disguised income.
HMRC will not have been impressed by the fact that it seems at least one EBT scheme was promoted by an old Eye favourite, Paul Baxendale-Walker (see Eye 1183). The lawyer was struck off in 2007 for double-dipping by advising clients to use tax schemes from which he secretly benefited. He had already been suspended for helping in the defrauding of pensioners in a small Scottish engineering company.
However, help for Rangers is at hand in the shape of entrepreneur Craig Whyte, who is said to be discussing a takeover bid to buy out Sir David Murray’s interests in the club.
Whyte, who is 40 and lives in a Scottish castle, is a man of mystery for someone to whom others seem keen to confer billionaire status. He is a director of Pritchard Stockbrokers and a shareholder in the AIM-listed Merchant House corporate finance group. They are authorized by the FSA. Whyte is not.
He was a director of LM Logistics Group, which was controlled by Merchant Corporate Recovery, where he is still a director, and Merchant House group is an investor. Warehousing group LM collapsed into administration in August last year. Whyte had resigned in March. The deficiency for creditors was £3.4m, threatening to wipe out Merchant Corporate Recovery’s investment and, more importantly, a £661,000 loan.
As a result of LM’s problems the January 2010 accounts for Merchant Corporate Recovery — filed late on 31 March this year — were qualified by the auditors Hazlewoods. The auditors disagreed about the accounting treatment of the companies in which it had invested, such as LM. Whyte said to include them would be misleading; Hazlewoods said that was required by both the Companies Act and accounting standards.
Hazlewoods stated: “In our opinion due solely to the non-inclusion of the controlled investee companies… the financial statements do not give a true and fair view of the state of the company’s affairs… have not been properly prepared in accordance with the requirements of the Companies Act 2006.”
Hazlewoods also raised an “emphasis of matter” issue over the “going concern” basis upon which the 2009 accounts, filed only last February, for another investment, coach company Countryliner Group, had been prepared. Since the balance sheet date, one subsidiary had done a creditors’ voluntary arrangement and another had collapsed into liquidation.
The accounts for Tixway UK are overdue from last October and it faces a proposal to be struck off, as do two other Whyte companies: Merchant Interactive and Zemfill, from which he resigned last year.
Otherwise, Whyte seems an ideal saviour for Rangers on whom Sir David Murray, HMRC and the fans can By LightingMonkey
Wednesday, April 13, 2011
This is a letter signed by SWP members from Scotland who have resigned from their party along with Chris Bambury. It seems a genuine and bona-fide list and as such represents a huge blow to the SWP in Scotland. It includes their Glasgow Organiser, East Scotland organiser and six of their Scottish Steering Committee. It also represents the loss of their student base in Glasgow and their active youth members in Dundee.
Dear CC and Party Members,
We, the undersigned, are writing to inform you of our resignation from the Socialist Workers Party. This is not a decision that we have taken lightly: for all of us, it is an immense emotional and political strain to abandon an organisation in which we have invested countless hours.
Following the last split from the Party we were told there would be an end to factionalism. It is our position that this was not followed out in practice: factionalism persists at the very centre of the organisation. Allegations have been made against some of us and will undoubtedly continue. However, we have been committed to building the party as well as intervening in the anti-cuts movement, both on campuses and through Right to Work as well as relating to the Arab revolutions. We have not departed from the party line; indeed, we have been at the forefront of developing the organisation.
We are appalled by the factionalism which has driven Chris Bambery from the SWP. This is a consequence of a culture that pervades sections of the organisation and flows from the majority grouping on the Central Committee. This has impacted negatively on the work of the SWP, primarily demonstrated in a retreat from systematic united front
work. In particular our work around the Right to Work campaign has been confused and patchy across the country, primarily because the Central Committee - as a whole - did not drive that perspective from its inception.
In the build-up to the 26 March we could have been organising to get every possible local anti-cuts and trade union activist working together to carry out mass leafleting, but the message from the centre was to concentrate on building it through our paper sales. Those were, of course, vital; but we also needed to place ourselves alongside the thousands who were working to build the march.
Consequently the SWP's ability to influence wider layers of people provided by the biggest demonstration in trade union history was restricted. There are some very good SWSS groups, but the Glasgow students were the only SWSS group with any sizable presence on the student feeder march. Amidst arguably the biggest youth revolt in British history - and despite reports of bumper recruitment to the Party after Millbank - this should have been a massive wake-up call.
But rather than face up to the consequences and adjust our strategy, a faction on the CC has turned its attention to Right to Work national secretary Chris Bambery, who has been labelled "disgusting", "filthy", accused of playing a factional role in Scotland and of wanting to wreck the SWP. This culture means that the SWP nationally has not
taken up the campaign in defence of Bryan Simpson, with the Morning Star giving it more coverage than Socialist Worker. At the time of the Arab revolutions a pre-existing factional attitude towards the Stop the War Coalition meant too often we did not throw ourselves into building solidarity actions initiated by them.
Chris Bambery's resignation means we can no longer trust a section of the Central Committee. Let us be clear, we are not leaving the organisation just because of Chris Bambery’s forced resignation, but rather because we understand as symptomatic of a disease within the party that has held back its work and development over the past couple of years and distorted its theoretical tradition.
We have fought for a non-sectarian approach to party building and our results bear this out. Our position on this will not change. We intend to establish a Marxist organisation in Scotland. We wish to express our gratitude to the comrades in Scotland and elsewhere who have shared our frustrations but have not been willing or able to take
this last step. We want to work fraternally with the SWP as we do with all groups on the Left and the Trade Union movement. We wish those in the SWP success in building revolutionary politics. It is painful that it is not possible to move on together. However, we are all as determined as ever to continue as revolutionary socialists and to meet the theoretical and practical challenges raised by the ruling class offensive and the emerging anti-austerity
Sean Coyle (Scottish Steering Committee)
Lucky Dhillon (Scottish Steering Committee)
James Foley (National Committee and Scottish Steering Committee)
David Jamieson (Scottish Steering Committee)
Eileen Boyle (Scottish Steering Committee)
Pete Ramand (Glasgow organiser)
Suki Sangha (National Committee and Scottish Steering Committee)
Ben Wray (East Coast of Scotland organiser)