Rangers takeover: Duff & Phelps threaten legal action against BBC

Sir David Murray: '�6.3m via EBT'. Picture: Ian Rutherford
Sir David Murray: '�6.3m via EBT'. Picture: Ian Rutherford
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RANGERS administrators Duff & Phelps last night threatened to sue the BBC over claims a senior partner in the firm was aware of Craig Whyte’s scheme to buy Rangers using cash from the controversial Ticketus deal.

The BBC alleged that it had seen evidence that David Grier of Duff & Phelps was aware the Ticketus deal was underway in April 2011. Whyte completed the takeover of Rangers on 6 May 2011. It was later revealed that, told by outgoing owner David Murray of the ability to raise funds through the London finance firm, he had struck a £24m deal with Ticketus to fund the purchase of the club by selling off most of the next three years’ worth of season tickets.

The allegations were made in a BBC Scotland documentary Rangers: The Men Who Sold the Jerseys. The programme, aired last night, also claimed former Rangers owner Murray was the biggest beneficiary of an Employee Benefit Trust operated by the Murray Group and Rangers FC. Sir David received £6.3m via an EBT, the documentary alleged. The use of this tax avoidance scheme from 2001 to 2010 is the subject of a first-tier tribunal expected to deliver a judgment shortly that could land Rangers with a £60m bill when unpaid tax, interest and penalties are aggregated.

BBC Scotland also showed an “EBT table”, listing the names of Rangers players, coaches and staff who the corporation alleges were beneficiaries of the Murray Group Remuneration Trust, and how much they received through that trust. In all it claims there were 87 sub-trusts, administered from Jersey, with £50m paid into them.

Duff & Phelps reacted quickly to the airing of the programme, releasing a statement a little over an hour later. They would not comment on the BBC’s EBT allegations while the first tier tax tribunal was still active but strongly denied the allegations over the Ticketus deal.

Paul Clark, joint administrator, said: “The allegations made in tonight’s programme against Duff & Phelps are untrue, a distortion of the facts and highly defamatory. Discussions are already underway with our solicitors with a view to bringing legal proceedings against the BBC.”

The statement added: “We made a number of offers to assist the BBC in order they would not make the fundamental errors broadcast this evening and for some inexplicable reason the reporter Mark Daly declined these.

“We had also hoped to give interviews stating our case on camera but received strong legal advice against this course of action, bearing in mind the legal proceedings Duff & Phelps have raised against Collyer Bristow. The BBC were informed in writing from our solicitors.

“We did however provide the BBC with lengthy written statements stating our position.

“In broad terms Mr Daly failed miserably to understand the difference between working capital arrangements for the Club and acquisition funding.”

Grier, the man at the centre of the allegations, said: “I categorically deny that at the time of the Craig Whyte takeover of Rangers, I had any knowledge that funds from Ticketus were being used to acquire the club. This accusation is wrong, highly defamatory and betrays a lack of understanding of the facts.

“Neither I nor any of my colleagues at MCR provided any professional assistance to Liberty, Wavetower or Craig Whyte, in raising funds, performing financial due diligence, structuring or agreeing the terms of the purchase of the club from the Murray Group.

“Financial due diligence and other work was provided by Saffery Champness, a firm of chartered accountants who specialise in this area and our primary role was to provide assistance to Liberty Capital in negotiating a settlement and assignment of the debt due to Lloyds Bank.

“The reality is that, when my concerns about the use of Ticketus funding crystallised over the summer of 2011, I took immediate steps to raise these concerns with controlling directors of Rangers and HMRC.

“The email referred to in tonight’s programme to Ticketus dated 19 April 2011 mentions the possibility of raising funds for working capital but does not provide any information of quantum or terms of such a proposal. To suggest this email establishes an awareness of Ticketus providing acquisition funding is absurd and ridiculous.

“Once we discovered the full extent of the funding relationship between Ticketus, Liberty Capital and the club, we took immediate steps to raise our concern with controlling directors of Rangers and HMRC.”

Of the 63 Rangers employees that last night’s documentary claimed were paid through EBTs, the tables stated that Barry Ferguson received £2.5m, former manager Alex McLeish £1.7m, with others in the seven-figure bracket including Christian Nerlinger, on £1.8m, Michael Ball, on £1.4m, Ronald de Boer on £1.2m and Nacho Novo on £1.1m. Dozens of Scottish players also benefitted, including pundits Billy Dodds and Neil McCann, with the lowest sum recorded the £7,500 paid into an EBT on behalf of Steven Smith.

The most intriguing beneficiary is former Rangers manager Graeme Souness. He was paid £30,000 in 2001, ten years after he left the club, and while he was manager of Blackburn Rovers. The programme alleged that HMRC believed this was an illegal payment related to Rangers midfielder Tugay Kerimoglu’s move to Blackburn five weeks later.

Many of these players had side-letters detailing the appearance money and bonuses that were paid using EBTs, the programme set out. Murray himself has previously admitted that these payments were not disclosed to the football authorities because they were “discretionary”. However, both the SFA and SPL rules state that all payments to players relating to football activities must be lodged.

If the BBC’s findings are correct, it raises the possibility that all Rangers’ key players in the title successes of 1999, 2000, 2003 and 2005, will have been improperly registered. With Steven Davis, Kris Boyd and Novo also on the BBC’s EBT list, the legitimacy of the title successes in 2009, 2010 and 2011 would also come into question.

The programme will raise fresh questions over the SPL’s 11-week investigation into possible non-disclosure of payments by Rangers between 1998 and 2010, conducted by legal firm Harper Macleod. The SPL issued a statement hours before the programme aired, which appeared to suggest that the assistance they require from Rangers to conduct their inquiry – which will lead to an independent commission determining sanctions if it is determined the Ibrox club has a case to answer – had not been forthcoming.

“The investigation into the EBT payments made by Rangers FC is being actively pursued on behalf of the SPL,” said the SPL statement. “All relevant documents, materials and information have been sought from Rangers FC and we look forward to receiving full cooperation from the club and its administrators in providing everything that it and they have access to and which is required for the investigation to be completed.”

Among the wide-ranging group of Ibrox officials who last night’s programme claims received EBTs, current SFA president Campbell Ogilvie appears an incongruous figure. Company secretary when the scheme was first implemented, he issue a statement denying any knowledge of it, beyond the £95,000 sum he received through a trust. “I was not aware of which players received EBTs,” Mr Ogilvie said. “And, having been advised that the scheme was being operated in accordance with the regulations, I therefore did not raise any aspect of this with the Scottish FA.”

Paul Baxendale-Walker was the tax advisor who brought the EBT scheme to the Murray Group. He claimed on the BBC it was workable for football clubs – up to 2,000 other business used EBTs before HMRC closed the loopholes surrounding them two years ago – but that “the problem, as we all know, is how Rangers implemented the structure, how they drove the bus,” before adding, “but then again it’s only a problem if HMRC win.

“If HMRC don’t win, then hopefully you’re going to come back and say Paul, all the Rangers fans in this country want to thank you because you single-handedly saved Rangers FC £50m. You’re a hero.”