Comment: HMRC could be eyeing further action over Rangers
HMRC clearly seem keen on having an independent, impartial investigation of what has gone on at Rangers, and also the actions of the former directors.
They presumably do not regard Duff & Phelps as being sufficiently impartial or independent given their close relationship with Craig Whyte – that’s one of the things which comes out very loud and clear from the HMRC statement.
With regard to the options that were open to HMRC, in the short-term there would have been a fairly large proportion of the amount of money available to them if they had agreed to a CVA, but it was only some 8p or 9p in the pound, and that is before the big tax tribunal decision – it could have ended up being 2p or 3p in the pound.
They have probably taken the view that, frankly, the amounts of money being put forward are so insignificant, they may as well reject it and go for liquidation, which will allow for a more detailed investigation, certainly of the directors’ conduct. They state that they will pursue possible claims against those responsible for the company’s financial affairs. A supervisor of a CVA could equally pursue the vast majority of those claims, although there would be some claims which, legally, might only be available to a liquidator. I suspect that is another reason for HMRC wanting to go down this route.
I would have thought that Duff & Phelps must have had some sort of discussions behind the scenes with HMRC, at least informally, otherwise there would clearly have been no point in even putting forward a CVA proposal. I can only imagine that HMRC said to them that they were considering their position and that they would give the proposals due consideration. Having done that, they have now decided to reject them.
What HMRC clearly want is someone more independent than Duff & Phelps, some sort of proper investigation carried out and possible action taken against the people who in their eyes are perhaps responsible – certainly Craig Whyte, and possibly even Sir David Murray. Liquidation makes that possible, but whether any action by a liquidator against any of those people will be successful remains to be seen and will doubtless be defended vigorously.
There has been speculation about how Mr Whyte might affect any sale of Rangers, and at the moment it’s all up in the air. Mr Whyte has said he will agree to a sale to the Green consortium, but I think he probably expected the sale would be through a CVA – whether he’ll agree to a sale via liquidation I don’t know.
Rangers won’t be able to play in Europe for the next three years, and the other issue is will they even be playing in the Scottish Premier League next season? Without Rangers in the SPL, presumably there’ll be no television deal from Sky, and the very large away support of Rangers fans would not be available to other clubs in the league. Furthermore, sponsorship deals are with the existing company, and it will be entirely up to sponsors whether they wish to continue with their deals. I’d imagine they’ll have to weigh that up very, very carefully indeed.
• Ken Pattullo is a partner with accountants and insolvency firm Begbies Traynor
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