Rangers administration: SPL blamed for new hold-up in sale of club
RANGERS’ administrators have blamed the SPL for holding up the sale of the club as a result of proposed serious changes to the league’s financial rules, as the governing body introduces hefty new penalties for clubs in insolvency situations and those who fail to keep their financial affairs in order.
Paul Clark and David Whitehouse of Duff & Phelps had hoped to announce a preferred bidder for Rangers yesterday, having had time to examine the offers submitted last week by Paul Murray’s Blue Knights consortium, a Singaporean group led by Bill Ng, and American businessman Bill Miller.
But instead of nominating one of the three, Clark said that the resolutions tabled for the SPL’s general meeting on 30 April had forced them to delay doing so, as they could have an effect on the bidders’ plans.
“As administrators we had hoped to announce today the acceptance in principle of an offer for the purchase of Rangers Football Club, which would be followed by a period of exclusivity while due diligence is undertaken,” Clark said.
“Regrettably, this is not now possible as we were informed over the Easter holiday period that the SPL is proposing to consider, at a general meeting on 30 April, significant rule changes in relation to clubs which find themselves in an insolvency situation.”
The proposed changes would come into operation on 14 May, the day after the end of this season, and include increased penalties for clubs entering administration. Any club which transferred its shares to a new company – in other words, the so-called “newco” option – would forfeit ten points for two seasons. And a club going down that route would also have a 75 per cent deduction in the money paid to it from the SPL’s central pool.
Other proposals to be discussed on 30 April would impact not only on Rangers, but also on other clubs such as Hearts, who on several occasions this season have failed to pay their players on time. Clubs would be required to pay those salaries on time, to report any failure to pay, and to notify the SPL of any failure to pay income tax or national insurance. In addition, any club which failed to pay tax or NI would be prevented from buying new players.
The legislation will not be applied retrospectively, which means that if Rangers exit administration through a Company Voluntary Arrangement (CVA) they will suffer no additional penalty to the ones they have already suffered. They have been docked ten points for going into administration, and are prevented from playing in European competition next season because, having failed to exit administration by the end of March, they were unable to meet Uefa licensing requirements.
If they go down the newco route, however, they would face a three-year ban from Europe as well as other financial penalties. It is because of the possibility that these measures could become law, as well as the uncertainty from now until the meeting at the end of the month, that Clark and Whitehouse say they were obliged to delay naming their preferred bidder.
“The effect of such revised measures being considered at this juncture is that we, as administrators, are duty bound to inform those parties who have submitted bids of the proposed resolutions the SPL intends to consider,” Clark continued. “Failure to do so would constitute material non-disclosure on our part, which is a serious matter. Inevitably, bidders are now considering this information and will have to take a view as to whether it will affect their individual bids as they now stand.
“We hope to receive feedback from bidders as soon as possible in order for us to take the sale process forward as quickly as we can.
“We fully respect the right of the SPL to review its own rules and regulations and will not comment on the detail of what is being proposed for the meeting on April 30 at this stage. However, the fact that such measures are being considered at such a sensitive point in the sale process at Rangers is disruptive and regrettable.”
Another meeting of the SPL which is of more than passing interest to Duff & Phelps is due to take place at Hampden today. All 12 clubs will meet to discuss proposed changes to the voting structure, with the current 11-1 requirement for major changes being replaced by a 9-3 vote.
Proposed new penalties, to be discussed at the SPL agm on 30 April, include...
• Increase in points deduction for clubs entering adminstration from 10 points to at least 15 points
• A ‘newco’ would see SPL payments slashed by 75 per cent for three seasons and face a 10 point deduction for two seasons in top-flight
• Transfer embargo for clubs which fail to make PAYE and NI contributions to HMRC
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