The independent inquiry, chaired by former Supreme Court judge Lord William Nimmo Smith, delivered its verdict on Whyte and Rangers to a specially convened meeting of the SFA’s executive board at Hampden yesterday.
After several hours of considering the report, which will not be published until disciplinary proceedings against Rangers are completed, the SFA announced that Whyte does not meet their criteria as a “fit and proper person” to hold any formal office within football. The governing body are writing to Whyte, who will have a week to respond to the charge.
The SFA’s Judicial Panel will also consider a raft of other potential offences committed by Rangers and Whyte, including a general charge of bringing the game into disrepute against the club itself which carries a maximum punishment of a £100,000 fine and termination of SFA membership.
The independent inquiry was convened by the SFA on 21 February, a week after Rangers were placed in administration following a courtroom battle between Whyte and HMRC who are pursuing £9 million in unpaid PAYE and VAT since the venture capitalist purchased the club from Sir David Murray 10 months ago.
Lord Nimmo Smith was assisted by Professor Niall Lothian, a past president of the Institute of Chartered Accountants in Scotland, Bob Downes of the Scottish Environmental Protection Agency and SFA chief executive Stewart Regan.
Having claimed that the SFA had been obstructed in their previous attempts to assess Whyte’s suitability as a club chairman, despite his chequered past in business, which was a matter of record before he bought Rangers, Regan promised that the independent inquiry would “flush out” the truth of the takeover.
“I can confirm that the Scottish FA convened a Special Board Meeting at Hampden Park today to discuss the findings of the independent inquiry into Rangers FC, prepared by the chair, The Right Honourable Lord William Nimmo Smith,” said Regan in a statement last night.
“Principally, it is the belief of the Board, taking into account the prima facie evidence presented today, that Mr Craig Whyte is not considered to be a fit and proper person to hold a position within Association Football.
“We will be writing to Mr Whyte in relation to those findings and shall seek a response within seven days. The report submitted by Lord Nimmo Smith, having been considered fully by the Board, highlights a number of other potential rule breaches by the club and its owner.
“The report will now be used as evidence and forwarded to a Judicial Panel for consideration and determination as per the protocol. As such, the report’s contents will not be published at this time. Nevertheless, I can confirm that the club is facing a charge of bringing the game into disrepute.”
The specific potential breaches of SFA rules include Article 5 on the “obligations and duties of members”. Failing to comply with these carries a maximum sanction of a £10,000 fine and one-year suspension.
Rangers are also charged under Article 10, regarding the official return each club must make to the SFA each year. It prohibits the inclusion of anyone as a club official who “has been disqualified as a director pursuant to the Company Directors’ Disqualification Act 1986 within the previous five years.”
Whyte was disqualified as a director of a company for seven years in 2000. Rangers have already been fined £50,000 by the Plus stock exchange for failing to disclose that information. The SFA’s maximum punishment for breaching their official return rules is a £1000 fine and one year suspension.
A further potential breach by Rangers is under Article 12, concerning the proper keeping of financial records. It has a maximum sanction of a £5000 fine. Rangers have also been issued with a notice of complaint by the SFA’s Compliance Officer over their failure to pay Dundee United around £100,000 from the proceeds of the Scottish Cup tie between the clubs at Ibrox on 5 February. If the payment is not made, Rangers could be banned from the Scottish Cup in future.
A spokesman for Whyte last night said he would be making no response to the SFA’s charge until he has been able to assess the findings of the Independent Inquiry.
“The SFA has indicated it will be writing to Mr Whyte within seven days,” said the spokesman. “Until that happens and he has had an opportunity to consider Lord Nimmo Smith’s findings, it would be premature to make any comment.”
Administrators Duff and Phelps, however, moved quickly to try to distance the club from any wrongdoing by Whyte.
“We note the findings and announcement by the Scottish Football Association,” said co-administrator Paul Clark. “We look forward to stating the club’s case to the judicial panel. In broad terms, we believe there are mitigating factors and we hope to demonstrate the distinction between the club and the actions of any individuals.”
The SFA’s independent inquiry also considered the wider financial crisis surrounding Rangers, including the use of Employee Benefit Trust payment schemes which are subject of an imminent First Tier Tribunal into HMRC’s demand for up to £49 million in unpaid tax by the club.
But Regan announced that the issue of alleged illegal “side contracts” for players in relation to the EBT scheme will not be the subject of any SFA action until the Scottish Premier League have concluded their own investigation, which was announced earlier this week.
“I would like to clarify the situation relating to possible non-disclosure of payments to players, and in particular the Employee Benefit Trust,” said Regan. “Having noted the Scottish Premier League’s intention to investigate this matter, the board has decided to allow the SPL to complete this process, given our potential status as the appellate body. We retain our position until such time as the SPL’s investigation is concluded.”