Judge orders probe into conflict of interest claim against Duff & Phelps
RANGERS administrators Duff and Phelps last night insisted a court order to probe their suitability for the role will disprove allegations of a conflict of interest on their part.
At the Court of Session in Edinburgh yesterday, Lord Hodge called for a full report into the claims made on a BBC television documentary last month. The programme raised doubts over the appointment of Duff & Phelps by Rangers owner Craig Whyte when he placed the club in administration on 14 February.
It was claimed that David Grier, a senior partner at Duff & Phelps, was aware of the controversial deal Whyte struck with investment firm Ticketus which he used to fund his purchase of Rangers through advance season ticket sales.
Grier denied the allegation, insisting his only knowledge of Ticketus’ relationship with Rangers at the time of Whyte’s takeover was their previous involvement with the club under Sir David Murray’s ownership. Duff & Phelps are also being investigated by the Insolvency Practitioners Association over the claims.
But Duff & Phelps managing director David Whitehouse, co-administrator of Rangers along with his colleague Paul Clark, is confident his firm will be vindicated by the Court of Session action.
“We welcome the decision by Lord Hodge today,” said Whitehouse. “Producing this report for Lord Hodge will give us an opportunity to demonstrate that the allegation of conflict of interest by the BBC was wrong and grossly irresponsible.
“We have a well-established conflict checking procedure which was fully adhered to and there was no reason for us not to accept the role as administrators. It should be remembered that HMRC withdrew their application to appoint administrators to enable us to do the job. We maintain there is no conflict of interest.” Whitehouse also claimed that a key plank of the BBC documentary’s claims, the opinion of leading insolvency expert Roger Isaacs, had now changed in favour of Duff and Phelps’ position.
“Since the BBC documentary we have met Mr Roger Isaacs who appeared on the programme and was asked for his professional opinion as a forensic accountant,” added Whitehouse.
“Mr Isaacs informed us that he was not shown relevant documentation by the BBC and now, having reviewed the documentation, has told us that he is satisfied that our firm did not have knowledge of Ticketus funding being used to acquire Rangers in 2011, prior to the transaction being completed.
“We are also co-operating fully with the investigation announced by the Insolvency Practitioners Association and we look forward to that inquiry being concluded as soon as possible. We have also referred the BBC allegations to our solicitors.”
BBC Scotland has said it stands by the claims made in its programme.
In a letter seen by the BBC from Roger Isaacs to Duff and Phelps following a meeting between the two parties, Mr Isaacs states: “At the meeting you made various representations and offered to send me further documents to support them.
“I have now had a chance to consider these and you should please be aware that I have not been persuaded that Duff and Phelps had no knowledge of the Ticketus deal to fund the purchase of the bank debt.”
Mr Isaacs adds: “My view remains, on the basis of the information I have, that Duff and Phelps appear not to have been able to fulfil the necessary requirements of independence to allow them to act as administrators”
In court yesterday, Lord Hodge said he took no view about what the BBC had said, but wanted to know whether Duff and Phelps had obtained and acted on legal advice on the question of conflict of interest.
Lord Hodge said: “There is considerable public interest in this jurisdiction in relation to the administration.”
Lord Hodge added: “I do not want the administration to come to an end without having received that report.”
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