Rangers administration: Craig Whyte’s promise to step aside and hand Rangers over to fans ‘ludicrous’
CRAIG Whyte’s promise to stand down as Rangers chairman and consider handing over control to fans has been branded “ludicrous” by supporters angered by new revelations over the financing of the deal that has plunged the Ibrox club into crisis.
Mr Whyte made his promise in an extraordinary and lengthy statement, which attempted to defend his controversial reign at the beleaguered club he bought from Sir David Murray in May last year.
However, his attempt to mollify the fans failed as – contrary to previous denials – he admitted that money from Ticketus, the London-based company that paid for the rights to sell three years’ worth of season tickets, was used to “complete the takeover”.
Minutes after Mr Whyte’s statement, this was explained by the club’s administrators, who revealed the £24 million received from Ticketus was, in fact, used to clear an £18m debt with Lloyds Banking Group inherited from Sir David.
In a further development, the Scottish Football Association has appointed Lord Nimmo Smith, one of five judges who heard the appeal of Lockerbie bomber Abdelbaset Ali Mohmed al-Megrahi, as chairman of a new independent inquiry into Rangers, which is also the subject of an investigation by Strathclyde Police.
In his statement that provoked the fans’ hostility, Mr Whyte said he was “personally on the line for £27.5m in guarantees and cash” to Ticketus.
He has criticised HMRC, who he claims were “simply determined to make an example of Rangers”.
And he claimed an offer to pay back outstanding VAT and PAYE was made in the weeks before the club entered administration, but rejected by the HMRC.
However, fans have hit out at Mr Whyte, calling the statement “ludicrous” and saying his offer to gift them shares is a “dead weight around our necks”.
HMRC declined to comment, but sources at the UK government’s tax arm said they were shocked by the statement.
An insider said: “This is money from groundsmen, cleaners, players and, of course, fans that they have decided not to pay.
“PAYE, VAT – that’s not their money. They’re allowed to hold on to it for a certain period of time – VAT for three months, PAYE for 14 or 15 days – then they have to pay up.”
Mr Whyte said he would be in favour of a fans’ foundation taking over the club, and would gift them the majority of his shares, but only once the club was breaking even.
“If I can succeed in coming through this administration process I am very keen on the idea of gifting the majority of my shares to a supporters’ foundation,” he said.
“It makes a lot of sense, but fan ownership would work only after the current process is completed, because the club has to get into a position where it is running at break-even in order for that prospect to be viable.”
Mr Whyte said he was in “active discussion with a number of potential bidders and investors”, but any potential takeover would depend on a resolution to the “big tax case” – the disputed employee benefit trusts (EBT) – which he believed could cost the club £75m if the tribunal decision went in favour of the HMRC.
Mr Whyte acknowledged there was a lot of “raw emotion” about the club’s current plight and admitted there were times he wished he had never launched last May’s takeover bid.
“I will not continue as Rangers chairman post-restructuring,” he revealed. “I will admit there have been times when I have wished that I had never entertained the idea of taking over Rangers.
“But I am a Rangers fan, and, like other Rangers fans, I don’t do walking way.”
However, if that use of what has become a Rangers’ battle cry was aimed at currying favour with fans, it fell on deaf ears,
Mark Dingwall, director of the Rangers Supporters Trust, said: “It’s a ludicrous statement. He purchased the club with the fans’ season ticket money, so it is not his to give.
“He has lumbered the club with the potential liability of £50m which is rightly David Murray’s, so his gift is in fact a dead weight around our necks.
“All of these deals are the fruits of a poisoned tree.”
Mr Dingwall added: “His credibility is now shot to pieces. This statement is ludicrous from start to finish, contradictory and misleading.”
Earlier this month, Mr Whyte was asked by our sister paper, Scotland on Sunday, if he had used the Ticketus money to buy the club.
He replied: “The sale of the club went through prior to the arrangement for the tickets. It’s absurd. Do you think Lloyds and Sir David Murray would have given me the time of day if I hadn’t proved I had the money?”
However, in his statement on Tuesday afternoon, Mr Whyte said: “The arrangement with Ticketus was originally to provide additional working capital.
“My corporate advisers came to me with the proposition that it was entirely possible, as well as highly beneficial, to negotiate a deal with Ticketus that would allow us to complete the takeover and maximise working capital for the club’s day-to-day business.”
He added: “The only person at risk from the deal is me personally, because I gave Ticketus personal and corporate guarantees underwriting their investment.The club and the fans are fully protected.
“In terms of exposure, I am personally on the line for £27.5m in guarantees and cash.”
Mr Whyte admitted he faced “huge financial losses personally if the restructuring fails or is not allowed to proceed”. He said: “Any suggestion that I am trying to make a fast buck, or have indulged in illegal manoeuvring, is clearly ludicrous.”
He also revealed that only half of the £9m demanded by HMRC was unpaid PAYE and VAT, with the other half relating to a disputed debt he inherited following the takeover in May, last year, which at the time was reported to be £2.8m, but appears to have grown by more than 50 per cent.
Mr Whyte said: “It is simply not true to say that Rangers or I have reneged on paying these liabilities since the takeover. The truth is that around £4.4m of the £9m demand is, in fact, the ‘wee tax case’, including penalties, and which is in dispute.”
The club attempted to strike a deal for PAYE and VAT in the weeks before it entered administration, but refused to settle the ‘wee tax case’ at the same time.
“We offered to pay £2.5m of the PAYE and VAT up front, with the remainder at £500,000 a month, but HMRC flatly rejected that,” he said.
The outcome of the disputed EBT will be decided at tribunal, but Mr Whyte expects to lose and had proposed a payment plan which, he said, HMRC also rejected.
“We wanted HMRC to confirm that they would accept repayments of £2.5 million a year if we lost. But again they said, ‘No’.”
He added: “Anyone who pretends that this has somehow been my goal is either a fool or has a particularly sharp axe to grind.”
Meanwhile, Duff and Phelps said they were still looking into where the rest of the Ticketus money had gone.
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