A “What If …?” Scenario That Should Scare The SFA

1280px-HK010I’m going to tell you a story here, and please bear with me.

Before I do I want to thank two people; one directly, and one anonymously.

The direct thanks I send to the writer of the John James blog, whose recent works have been great reference points in helping me get to the bottom of a murky story I heard earlier this year and which another source all but confirmed over the weekend.

That source is the one I’d like to thank anonymously. He knows who he is and why it’s important that I don’t use his name.

What I am about to write for the next few paragraphs is all fact.

I’ll tell you when I start speculating, because it’s important to separate the two things.

On a day when The Guardian is publishing unsubstantiated crap in an effort to attack the Resolution 12 team, and maintaing that Scottish football governance issues are of concern only to Celtic and our fans I am not about to claim, for one second, that what you are about to read is all referenced and properly sourced and 100% accurate.

I’m not even going to tell you the specifics of what I’ve heard; I’ll give you the background and a hypothetical scenario based on some of it, and what I don’t write you can check out for yourself. Some of it is already online.

You can then decide what you think.

Nothing I’ve seen is actual evidence; I want to reiterate that now, although I’m equally certain neither John James nor my other sources are going on rumour alone. Under normal circumstances I wouldn’t write an article based on such rumours, but it is not how real or not these stories are that bothers me and made me decide it was a worthwhile piece.

I’m writing it because this isn’t impossible. It isn’t even implausible.

It’s all very … doable.

And that’s what worries me.

This story starts in South Africa in 2013, when the tax authorities there brought an end to their campaign of chasing the assets of, and threatening to jail, one David Cunningham King, now the chairman of Sevco, otherwise referred to on the various Celtic blogs as the “glib and shameless liar.”

One of the key provisos of the deal was that he “repatriate his overseas assets.”

In other words, they wanted his cash reserves and his future earnings right where they could see them, where they could keep a close watch on what he was up to.

One of those overseas assets was a company called NOVA.

He sold that company to another, MicroMega. The South African government got the proceeds of the sale.

NOVA had been a pretty important part of the King portfolio. It had subsidiary branches in China, Brazil and Peru.

But it was a strange deal, one that bore scrutiny. It was so strange that the South African government had to independently investigate it to make sure the shareholders at MicroMega got themselves enough bang for their bucks. Because, you see, MicroMega is partially owned, and chaired, by none other than David Cunningham King himself.

This isn’t uncommon in the business world, and here it was a perfectly logical step.

King still does a lot of business abroad and NOVA still has offices in various nations; what’s changed is simply that the company now has its headquarters in South Africa. Although MicroMega also has subsidiaries in various nations around the world, they are registered at home, whereas the registered offices for NOVA had been in Hong Kong.

At various times in the last two or three years I’ve looked into King for this and for the CelticBlog.

It wasn’t hard to discover that his reported wealth these days is mostly on paper, tied up in the share value of companies he is sitting on the boards of and has shares in.

It’s an established fact that all of his disposable assets were seized by the government; the cars, the houses, the wine cellars. His liquid assets were either turned into cash to pay the fines or likewise seized. The settlement didn’t wipe him out, and in comparison to the likes of us he’s still a wealthy man, but it didn’t leave him much to “invest” in Sevco either.

But he still works hard and he has a lot of shares, and based on the values of those he still appears to be quite well off.

But this has always been a fundamentally misleading indicator of actual wealth, because if, say, Mark Zuckerberg were to announce, tomorrow, that he was putting up the entirety of his Facebook shareholding as a public offering, the value of those shares would go through the floor as people wondered why he was bailing out.

King’s done that before, of course, which is what got him into trouble with SARS in the first place, and although it is possible for him to liquidate shareholdings in little chunks, this potentially has a negative impact on the value of the rest of his shares.

In June of last year, King sold 15 million shares in MicroMega for a value of £8.5 million.

I’ll get back to that number shortly.

South Africa is a country that takes a dim view of the things Dave King did in his tax avoiding years.

Other countries have a similarly dark attitude towards tax evasion, but South Africa take it more seriously than most, in particular because much of the cash they lose out on ends up overseas. Their government likes to keep their national wealth in-country, as it were, which is one of the reasons King was told to “repatriate” his assets back to where the tax man could get at them.

South Africa also has rather robust exchange control regulations, which heavily penalise high worth individuals who want to move cash out of the country. They’d prefer that cash was invested, and taxed, right there at home, for obvious reasons.

There’s a financial cost to transferring money out of South Africa.

There are also regulations in place which require disclosure on where the money is going and what it’s ultimately for.

These rules would be even more rigorously enforced with a man like Dave King.

Without prior approval from their government and Treasury, no resident can transfer cash out of the country in any significant sums. There’s simply no getting around that fact.

This site has long argued that the combination of Dave King’s tax settlement, the government’s insistence on the repatriation of assets and the harsh exchange controls which the South African government has in place, make it virtually impossible for him to “invest” in the club to the extent he and others seemed to suggest he would.

In short, even if he had that kind of wealth he’d never be allowed to spend it catering to the egos of Scotland’s most ungrateful and impatient football fans.

This site and others are on the record as having said that King has spent precisely nothing on NewCo Rangers up until now, save for the purchasing of some shares and giving a loan of £1.5 million in the name of New Oasis Asset Limited, which is referenced as a “King family trust” and, for all we know, doesn’t even have his name on it.

Any further “investments” should be very easy to demonstrate because something like that would leave a very long paper trail.

Or so I long suspected.

At the same time, this site and others have long argued that the present directors, none of whom are high worth individuals – save for Douglas Park, who has always shown great reluctance to pour it into the black hole of a football club – will be able, or are willing, to keep on funding the club from their own “soft loans.”

The only person in the history of Sevco who had the financial wherewithal to do that into perpetuity is the one King has worked so assiduously to push away; Mike Ashley, who’s Sports Direct billions could have kept the lights on indefinitely.

That means that without “outside investment” sooner or later it’s going to fall on King to keep his promises, or not.

King can buy shares in, and invest in, any company he likes, just so long as he does it through a South African registered “vehicle”, and the tax man knows how it’s been done. There are “foreign portfolio investment allowances” which have to be run through registered bodies, and individual allowances, which can be up to £400,000.

It is possible to get certain funds abroad for such purposes.

Buying shares in foreign registered companies comes under the exchange control laws and his initial share purchase, plus the £1.5 million in loans, probably doesn’t push him over the threshold depending on what’s in the “family trust.”

In the main, however, the more money he has to “invest” the more likely it is that the South African government will draw a big line and subject him to those more rigorous investigations and rules. South Africa’s government is not of a mind to let any high worth individual – far less one they had to chase for years – take significant sums out of their country.

And this is where our friend Keith Jackson comes in.

On 7 December 2015, Jackson wrote one of his best articles of last year, if not the very best. In it, he questioned King’s “investment” in the club and wondered where the £5 million which they had recently announced would pay off Sports Direct was going to come from. It was one of the first articles to actually ask hard questions about the Sevco board and their long term plans.

And a certain man in South Africa was spooked by that, because he has always been able to rely on a subservient media in order to get the things he wants. He had made promises and Jackson was asking he keep them, but the Record writer was also casting doubt over the veracity of a lot of King’s claims and that bothered him most of all.

Was Jackson reading up on South African exchange control laws?

No, he was simply wondering why, when it only takes 11 hours to fly here from Johannesburg, that King hadn’t already simply delivered the money and given it to the Newcastle owner.

For all it was a ridiculous notion, there was a core of truth in what Jackson actually said … and he was right to be asking the question. He should have asked more questions though, such as where King had allegedly found the two “investors” who were said to be putting up the bulk of the cash. Jackson had doubts about those guys, and those doubts were not without foundation.

Whether Jackson pushed King and his people into speeding things up or whether his intervention was shrugged off inside Ibrox and utterly ignored is something we’ll never know, but that money duly found its way to Ibrox shortly thereafter and the debt to Ashley was cleared. The Sevco board agreed another £1.5 million in loans, and they were able to get through the season.

Just a month after he had written that piece, with the money now in place and with Ashley paid off, Jackson was singing a very different song. Yet oddly he wasn’t giving the credit where it was supposed to be due.

In fact, he was telling everyone that King had actually invested “north of £7 million” in the club himself.

Myself and others mercilessly and brutally mocked him for that assertion.

Where did he get that number from?

Was it “direct knowledge”?

Was it a wee emailed memo, perchance?

Something thrown to him by a PR firm?

If it was then it was the daftest ever released in the history of public relations in Scotland, because it has been focussing minds ever since. As John James has already pointed out, the total “take” Sevco had brought in since King became chairman was not far from that sum and we know much of that had come from other members of the board.

But there was still that rather large chunk of money that came from elsewhere, from “Hong Kong-based fans” Barry Scott and Andy Ross.

Sadly, for Sevco, it quickly became apparent that Ross had some “background”.

In December 2014, he had been charged by the Securities Commission over there, and found guilty of numerous failures in relation to his handling of an audit involving a company that was being investigated for fraud. The charge was “improper personal conduct” and he was fined and banned from serving on an SEC-regulated company for a term of three years.

It’s not clear if he knows, or has done business with, George Latham, the other Hong Kong based Sevco investor, who is rumoured to be deeply unhappy with things at the club. Perhaps he’s aware of stuff that the average punter isn’t. I have heard that he was explicit in demanding that King finally show the others the colour of his money.

And this is where we head into speculative territory.

According to the people I’ve spoken to, and as  John James has suggested quite openly, neither Ross nor Scott has that kind of money. With Ross unable to sit on a board of directors, and with his net worth unknown, we can’t really say whether that’s true or not, but it can’t be easy to just find £2.5 million that’s going spare, even if, as some have suggested, there’s a Wonga rate of interest on it.

If these guys don’t have that kind of money, if John James and others are right, then they’re not the source of the £5 million which is attributed to them in the Sevco accounts and which so famously bought Ashley off and ended his hold over the club.

We know the money is real, but if it didn’t come from them then where did it come from?

Let’s start there. Let’s speculate a little.

Did that money originate elsewhere?

Say, in South Africa?

Was it funnelled through Hong Kong and into the accounts at Ibrox, with those two “investors” playing patsy, and either taking their cut of the interest or being looked after some other way?

In short, did that money come from Dave King himself?

First, with King’s financial situation being what it is, where would he get the cash?

Well, I suppose, if we’re speculating, that it’s possible the genesis of these funds was the £8.5 million in shares which he sold in MicroMega in June last year. This, after all, was the very company he used for the incestuous deal that let NOVA become a South African company, although it was based in Hong Kong. In fact, isn’t it also possible that the £5 million actually went through NOVA itself?

As I said, I’m not saying this is true.

This is all speculative, a “what if?” scenario.

But the way the game is run here in Scotland, it’s not impossible.

It’s not even improbable.

Because this isn’t even about King, not really. This is a scenario that could as easily have involved Craig Whyte or Charles Green or the Easdales or whoever else has sat on the Ibrox board over the last few years. The loopholes that allowed those guys to get their feet under the table are still wide open, and God alone knows what might happen in the future if they stay like that.

As to King himself, well what he does with his own money is his lookout. He’s already proven to be a little slippery, but also a little stupid. In the documented instance which he’s famous for he did, after all, get caught.

I expect someone who screws up that badly would be odds-on to do so again.

It’s not as if there aren’t people looking.

As simple as it would be for someone like him to move money around like that and find ways of doing it, he has to know he wouldn’t be operating in the dark. He’d be doing it surrounded by eager eyes.

I’m 100% certain that SARS keeps a close one on him and they aren’t the only ones. He has seriously pissed off an actual billionaire, a guy who knows his background and will be very aware of South African exchange controls and the corporate structures at NOVA and MicroMega, and will be understandably curious about what the source of the £5 million which paid him off is.

Is that a guy you’d want digging into you?

We already know King provokes him to a foolish, even dangerous, degree but could he really have been that stupid?

Ego does things to people. It doesn’t keep them smart.

But like I said, that’s his business.

If he’s done something daft then it’s on his head, and there’ll be no dodging the bullet this time.

The issue here, as ever, is football governance or what passes for it in Scotland, because I cannot imagine another association where a scenario like the one I just proposed is even remotely possible, in light of all the outside agencies supposed to be watching.

What troubles me is this; what does it mean to Scottish football?

Because we’d be talking about money laundering here, and that’s the best case scenario. That’s the long and short of it, and that goes well beyond the usual nonsense we often hear about. This would be the illegal transfer of funds from one country to another, evading financial controls and other laws, and probably screwing with the tax man into the bargain. Again.

It all comes down to how this kind of thing could easily happen with the people we have running the Scottish game. As John James has pointed out, if someone wanted to do this kind of thing he only has to look at the way the media ignores any issue it doesn’t want to deal with and the way in which the SFA turns a blind eye to all manner of things, no matter how dark.

None of this should be possible with the proper controls, but it is.

Good governance doesn’t even have to be that complicated, not in this case.

I cannot overstate enough times that Dave King is an open book. His history is not a secret and neither is the fact he needs to comply with South African laws involving investment and the transfer of funds. That’s a fact and whether he simply found two Hong Kong based mugs or whether he used them as conduits for a scam is beside the point.

To get where he is right now, he had to pass a “fit and proper person” exam.

We all know that. Ashley took the SFA to court to find out how they arrived at the decision, and he demanded they make their report on it public. He hinted at some deadly information in there. I think I know what that information is. It’s not what they asked King or what answers he gave. It’s what they didn’t bother to ask him at all. It’s the answers they didn’t even look for.

When he sat in front of the SFA for his fit and proper person examination, how much did they really want to know?

Did they quiz him on South African financial regulations?

How much clarity did they seek about how he was going to meet all of his stated commitments about investing tens of millions of “his children’s inheritance”?

We know it’s impossible.

But this guy was presenting himself as the saviour of the club, in the same manner Whyte did, with glib assurances painting over blatant bullshit. Remove Dave King and his grandiose and utterly ridiculous promises and isn’t Sevco a club in serious danger of collapse as a going concern already?

It’s his alleged wealth that underpins the “business plan”, the one on which the club getting a UEFA Level License to compete in the top flight next season legally depends … this is right there, in black and white, in the SFA and UEFA rule books.

Wasn’t it important to know where the cash was coming from?

Surely they didn’t just accept all that nonsense about how easy it would be to find “outside investment”?

Who better than Stewart Regan knows how hard that is?

This is a Scottish club that emerged from a liquidation, which is still haunted by a tax scam and wIth no record of posting profits. As Phil is fond of saying, “this is a loss making company with no credit line from a bank.”

Sevco’s short term business plan is wholly dependent on Dave King’s promised pot of gold, and as we’ve seen even if that exists he’s not going to be able to use it for that purpose, not legally, not by any means that would be palatable to his government or in line with the deal he’s made with them. So where’s the money actually coming from?

Some folk in a position to know assertain that everything about the Hong Kong deal is fishy. That nothing about it really fits. Where the Hell did King find these guys? Why didn’t they “invest” before? Their £5 million could have bought the assets of the club in 2012, so why now? Why have they only now popped up out of the woodwork?

They were initially touted as being “Rangers men.” But they were previously “investors” in Workington Reds, where they were similarly packaged as “fans” investing their cash in an act of love.

It’s not hard to come up with tenuous links between Ross and King, if we wanted to take speculation to absurd heights. Ross works for Baker Tily. They are one of the biggest accounting firms in the world, so it may just be a coincidence that they’ve worked with NOVA. That they’ve got offices in both Hong Kong and Johannesberg. That there are other subtle connections.

But they were also linked with Sevco itself.

In August 2015 they were being touted as the club’s official auditors, and in an odd turn of events Phil reported that a “senior client” of the company had strongly objected to that. He sent them a bunch of questions on the matter, alleging that they’d turned down the opportunity and that Campbell Dallas LLB had been approached instead. As it turned out, they were duly appointed a day or two later.

Although The Offshore Game and the Tax Justice Network guys have had all the ink recently, they’re not the only NGO to have looked into the dark corners of football. In 2009, The Financial Action Task Force, an intergovernmental agency, wrote a report called Money Laundering Through The Football Sector. It is a damning, shocking, and incredibly prescient piece of work.

Since then, of course, Scotland has seen a parade of less than savoury characters troop across the landscape singing The Billy Boys. As one guy on TSFM said recently (and thanks to him, REIVER, for posting a link to the FATF report, “organised crime has its grubby hands in sport all around the world why would Scotland be left out?”

Who says we’ve been left out?

Does any of this even remotely compute at the SFA? Do they give a damn? Can something as potentially damaging as this really happen right under their noses? Of course it could. Because it’s happened already.

I mean, don’t these people have a fiduciary responsibility to scrutinise the means by which a football club comes into millions of pounds?

My God, doesn’t that open the doors wide to corruption on a grand scale?

How do we know clubs aren’t being financed by the proceeds of crime right now?

That there isn’t at least one Scottish club paying its bills with drug money or loan sharking debts or worse? The Ashley loans were at least open and transparent, his company at least reputable if not entirely wholesome.

King couldn’t wait to get Sevco off the stock exchange. We’ve all wondered why. Is it because, as he puts it, that it’s expensive and wasteful of time and effort? Did he really ditch is so he wouldn’t have to fill in a few forms? It’s a lot of inconvienance, including not being able to start a share issue, just to save on the admin costs.

Or was there another reason? A darker one?

One more to do with transparency and openness?

These are just some of the reasons why a scenario like the one I’ve outlined is more than just a flight of fancy and the stuff of the internet Bampot. We have rules here so lax you could get around them in a hundred ways, and it wouldn’t take an international super villain out of a Bond movie to come up with a dozen strategies for pulling it off.

Doesn’t our football association need full transparency about these sort of things?

Isn’t it way past time for fit and proper person criteria to do what it says on the tin?

Isn’t it time for financial fair play to be introduced so stuff like this is impossible and not just unbelievable?

Because the only reason I’m not wholly convinced of this is that it just sounds so absolutely out there and unreal because of all the implications of it.

And that begs one last question; at what point does a failure in governance become complicity?

When does looking the other way graduate to something more serious?

Is wilfully ignoring a possible criminal act not, itself, a criminal offence?

The SFA is a public body. It has responsibilities beyond covering its own backside and that of a certain football chairman.

If the SFA has helped Dave King commit a crime here – either by accident or design – then not only should heads roll but people should be indicted alongside him as co-conspirators or accessories after the fact.

I can’t put it more bluntly.

This policy of “look the other way” when it comes to Ibrox has been disastrous for the club and for Scottish football but we’re on a whole new playing field if a scenario like the one I just proposed ever comes to pass and the authorities find out about it.

People will say this is a crazy suggestion, and at any other association it would be.

As those who’ve been following the Resolution 12 situation though, we know what these folk are capable of.

The SFA knew what Whyte was planning months before he pulled the plug, allowing Rangers to trade whilst insolvent and continuing to run up debts it had no intention of paying.

They allowed the assets of the liquidation to be bought by a company which wasn’t named on the original sales documents, and they gave that company a license.

They allowed Green to sell shares when it was apparent to many they might not be his to sell and they stood back whilst his board of directors investigated itself over links to Craig Whyte, links which had a direct bearing on that share issue.

I have long contended that this might have made them party to a fraud.

Does it still sound unlikely to you?

Americans have a law that I sometimes think would work very well over here; they call it RICO. The Racketeering Influenced Corrupt Organisation Act, which seeks to destroy entire groups involved in what the FBI refers to as a “continuing criminal conspiracy.”

Regan, Doncaster and others have gone out of their way to help first Rangers and then the NewCo avoid the scrutiny every other club would get, and through all of it their only defence is to accuse those of us who question it of bias and being motivated by hate.

What’s the line from The Godfather?

“It’s business, not personal.”

This wouldn’t be a shock if it turned out to be true, and people at Hampden who should have known better either averted their eyes or simply pretended it wasn’t happening at all. For people who understand the words “continuing criminal conspiracy” better than most, having assisted Craig Whyte in one, this wouldn’t be personal.

It would just be business as usual.

At a time when the mainstream media can’t even be trusted to cover the biggest sports story in the history of this island sites like this one are more important than ever. If you are able to, and you want to help real Scottish football journalism, and not the sort you get in the tabloids, you can make a donation by clicking the link below.

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Crimes, Capers & Panama Papers

dermot-desmond-moriarty-tribunals-752x501I get a lot of stuff in my inbox, as you can well imagine.

Some of it is ridiculous. Some of it is so bad it’s almost sublime.

One such email came through just yesterday and in it the writer regaled me with his warped view that I am a hypocrite for “ignoring the biggest story in Scottish football today”. He even shared with me some details, in case it had passed me by.

This was, of course, a reference to The Panama Papers, one of the biggest data leaks in history, revealing the details of the super-wealthy and their offshore tax avoidance schemes. This scandal has already brought down the governments of Brazil and Iceland. This time last week it had David Cameron teetering on the brink.

Amidst those papers was a certain name.

It was Dermot Desmond, of course, and my correspondent thought that this was somehow a stain on the image of Celtic and Scottish football, not to mention a heinous crime against society for which restitution had to be made.

These people are barmy. We all know that. Moments like this help to remind us that they’re also stupid, and it’s important that we remember that going forward. These goofy fools have spent years looking for the “smoking gun” that will prove to the world that Celtic is as corrupt as their club used to be and which their NewCo still is.

They’ve looked into land deals which go nowhere and bank loans which show nothing and relationships which don’t prove anything other than that Celtic has enormous clout and the respect of many people in many different fields, including politics, big business, banking and other areas where Sevco’s gore flaked fingers can’t reach.

I try to imagine the joy some of them must have felt on hearing the news that our majority shareholder was “caught up” in this. This would, if proved, be the catalyst for our total disaster. It was all too easy, in their fevered, febrile, minds to imagine Desmond being hounded by the tax authorities until his business empire collapsed, and the crippling debts drowned Celtic in a sea of red ink.

Everything would follow on from there; a global call-out for buyers to save us. None would come. A hastily put together attempt at a “pennies in the pound” CVA. Which would be refused. The SFA being faced with a world without Celtic. They would want to find us a safe berth. (Why do I doubt that?) But Sevco, newly powerful, would use every bit of its influence to relegate us to the bottom division. Our club would be judged dead until someone bought the bits. Somehow those bits wouldn’t include the history. (Yes, it would be interesting to watch them have to try and square that circle). We would end up scrambling our way up from the dust, weak, humiliated, to know how they felt.

You can see how this would unfold in their heads, and we know it would go just so because they’ve spent so long during the pursuit of the “state aid” case sharing their fantasies with those of us who needed a good laugh. Always it went something like that, the uncovering of some fact, some evidence, some shattering secret and then the domino effect that brought it all down.

Amazing, isn’t it?

The people who couldn’t find out Craig Whyte was a dodgy geezer, even after we’d shown them the paper trail and it had been on the BBC … suddenly they are super-sleuths, digging into public records and finding out secrets.

Except, as with the state aid “investigation” and the one involving the Co-Operative Bank, there really isn’t a hell of a lot to see here.

For one thing, there’s no suggestion – none whatsoever – that Dermot Desmond has violated any laws. It’s not even clear that what he did involved money. Oh I have no doubt whatsoever that Dermot Desmond is fully acquainted with tax avoidance mechanisms galore, but this particularly case doesn’t seem to involve cash, which one wouldn’t expect from a scandal with a guy who’s wealth is in the actual (as opposed to imaginary) billions.

In fact, all the Papers seem to “accuse” him of is being represented by a law firm, and having his name in some of their leaked documents. Not exactly the crime of the century, or indeed a crime at all if we’re being straight to the point.

Desmond and his business history has long been the focus of the Peepul and their Goon Squad.

They reference many issues in his past, appearances in front of tribunals and Law Lords almost beyond count. But every businessman of his means has those trials to endure. Not once have they demonstrated any skulduggery, although they allege plenty of it. They are lucky he doesn’t bother with internet tittle-tattle, or one suspects they’d be on the fat end of a very big libel lawsuit.

But still, these off-base nutjobs continue to look for some evidence that will cast doubt on him, and therefore cast some sort of cloud over Celtic. They never stop looking but never seem to find anything, and I know it frustrates them immensely.

Their latest accusation is that our club’s good work in Haiti is somehow linked to the Clinton Foundation … that’s right, to the charitable organisation run by the ex-President of the United States and his wife, the former US Senator and current Secretary of State and the presumptive nominee for the Democratic Party in November.

And what’s wrong with that?

Well, according to these geniuses that Foundation is mired in scandal.

What kind of scandal?

Who the Hell knows what goes on in their tiny minds, but it’s apparently not a big enough scandal for the US press and the Republican Party, who, you’d think, have got to be looking for this kind of stuff. Maybe the Sevco Brains Trust really has gone where they won’t, but knowing a little about this subject it’s hard for me to believe. The Clinton’s have only been at the sharp end of US politics for thirty years, and in that time people have been looking. Some of them haven’t stopped. If Karl Rove didn’t find the killer fact, Chris Graham ain’t gonna.

Not that any of it matters, because it’s all smoke to distract from the real crooks and we didn’t need a leak like The Panama Papers to know who they are.

There’s David Murray for one, a peer of the realm, whose companies were wound up earlier this month owing £200 million and upwards. The glib press release that went out in accordance with this said the bank was the “sole creditor” which is all nice and neat except the bank was, until recently, owned by the tax payer.

And this is why none of my correspondent’s ridiculous email stands up even to the most minor scrutiny and why it doesn’t amount to a scandal no matter how much he wishes it did.

For starters, Dermot Desmond is domiciled in Ireland.

His tax affairs are a matter between him and the Irish government, as Dave King’s were between him and the government of South Africa, and whilst Desmond might make the most of the legal framework which exists to stop any rich individual paying their share there’s nothing to suggest he’s considered a crook by the tax authorities at home.

The same cannot be said for the current Sevco chairman.

So there is no criminality involved in what Desmond has done, and where the tax payer gets a raw deal is something for the Irish government to sort out. It doesn’t make him an improper person to sit on the board of Celtic, and it doesn’t cost UK taxpayers a dime.

King has criminal convictions.

Murray quite literally built his club with money that belonged in your pockets and mine.

Even a complete fool sees the differences between these people.

And in case it needs further spelling out, here’s where the argument really falls on its fat, lazy arse.

Celtic was neither built with, nor depends on, the largesse of Desmond or anyone else. So even if there was a smoking gun out there … it wouldn’t impact on our club one bit.

Desmond is our majority shareholder. That’s all. He’s not a sugar daddy. We are a self-sufficient club. We don’t need him to pay our bills as they come due. Not a penny of the cash Desmond makes from his other businesses flows into Celtic Park.

Our club’s money is clean. Our foundations are not built on debt dumping or screwing over the taxman and, by default, the taxpayer.

I don’t like Dermot Desmond. I don’t like his attitude, the way he influences policy at Celtic Park and I don’t particularly like the people he’s helped pick to run the club. I think he, and some of them, are a stain on our reputation. I wish he’d pack his pencils and beat it, selling his shares to someone who gives a damn and doesn’t see them as a vanity purchase.

I don’t want his money and I never have.

What’s more, I don’t like any of these rich, greedy bastards who don’t want to pay their share when all around us cuts are being made to important public services both here and abroad. The Daily Record published an article today on how the taxman is chasing former players at Celtic and Rangers, as well as at least one who’s odds-on to play in Sunday’s game with Sevco.

What does Jackson expect us to say about that? If these people tried to dodge tax then they deserve everything they get regardless of the shirt they wear or wore. All these people ought to be brought to book, no matter who, no matter where.

But that wasn’t my correspondents point.

His point was that Desmond’s name was in those papers and that was as good as Celtic’s name being in there.

He wasn’t interested in taxpayers in Ireland or here.

He wasn’t concerned with debtors or creditors or the little guy being stiffed by the one who could afford the high priced lawyers.

What individuals do is up to them, and Hell mend them when Hector comes calling.

But Celtic has nothing whatsoever to do with any of it.

This was about one-upsmanship and our football club, and HMRC can chase whomever they want but the football club itself has kept clean, and it’s played by the rules, and it has met its responsibilities both to the football governing bodies and to wider society. It has accepted lean years and bad results because the alternative was to in some way cheat, whether that was financial doping or the bending of rules.

Our club wasn’t built on credit, or defrauding the taxman, it wasn’t sunk by debts. Nor was it like their NewCo, born in disgrace, from the shattered remains of a fraud, founded by men of highly questionable character, and which is now run by a crook.

I told my correspondent all of this, of course.

You know what he said?

He said tax fraud wasn’t a real scandal and then went on to reference … Hell, you all know what he went on to reference.

There’s something wrong with these people, don’t you think?

(This site couldn’t run without the support of its readers. If you like what I do you can make a donation at the below link. If every reader was able to give just a small sum the running costs would be met far into the future.)

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A Very Scottish Scandal: How Rangers Almost Wrecked Scottish Football – Part Two

craig-whyte-691403225(This is Part 2 of a lengthy article for this site and another one on the saga that saw Rangers fall into administration and liquidation, and how they and the governing bodies almost wrecked our national sport. Originally intended to be in two parts, this has grown to the point where it has to be considered a four-part piece with the rest soon to follow.

The last section charted the story of how Rangers was built on bank debt and tax evasion, how the party ended in 2008 and of how the club was allowed to get away with it all because it had friends in the governing bodies and the media.

This part tells the incredible story of the reign of Craig Thomas Whyte, and about how that same media exalted him without cause, how the governing bodies conspired with him without shame and how a handful of bloggers and serious mainstream media journalists investigated him without fear or favour.)

Part Seven: The Start Of The Whytewash ….

The high point of Craig Whyte’s time at Rangers came only 10 days after he took over the club, when they won their 54th, and final Scottish Premier League title. They were still betting everything on European football income, and winning the SPL had given them a potential path back to the riches of the UEFA Champions League.

Walter Smith, the manager, was due to leave at the end of that season and in a press conference after the match he told the waiting journalists that Whyte would have to deliver big money to “continue the success” at the club.

At that point, they had a squad of highly paid footballers, and operating expenses of over £40 million a year. The financial crisis was receding, but people were still feeling the pinch.

Smith’s statement was the purest sign you could get that the “Murray Way” of doing things at Ibrox was still very much part of the club’s DNA, and why not? Rangers hadn’t had to live within its means for nearly 30 years.

Three days later, Whyte told the media that the new boss, Ally McCoist, would get the money that he needed. It was a foolish promise to make when you considered that with Lloyds now gone they had no credit line from a bank and that the directors would be forced to personally carry any shortfall in funds.

But that kind of talk was needed to sell season tickets, and between those and European football income it might well have be enough to see them through the following campaign.

Just six days after making that promise, nine days after they won the title and only nineteen after he had secured control, the bloodbath started. Alastair Johnston and Paul Murray were kicked off the board. The chief executive, Martin Bain, and the Finance Director, Donald McIntyre, were suspended. Whyte’s gunsights were also trained on those who were left.

Their time would come. He could afford to wait.

In June, Bain announced that he was going to sue the club for breach of contract. When his case finally arrived at the courts, in September that year, Rangers were already reeling from one hammer blow after another.

The summer transfer business wasn’t what Rangers fans had been hoping for; there were no multi-million pound signings, but seven players were brought to the club for £4 million. There were a rash of outgoings, as several out of contract players weren’t offered new deals.

None of it significantly weakened the playing squad; in fact, the Scottish media, and the Rangers management team, were delighted with the business, and big things were predicted for the season.

On 26 July, Malmo travelled to Ibrox for the first leg of their key Champions League qualifying match. Rangers lost 1-0. A week later, on 3 August, they exited that competition after an ill-tempered 1-1 draw away from home. It was a disaster. Champions League revenues vastly outstripped those in the UEFA Cup, and the club needed them to stay afloat.

On 25 August even that was no longer there for them, when a 1-1 draw at NK Maribor, after a 2-1 defeat at home, saw them crash out of Europe for the second time in a month.

The hole this left in the balance sheet was enormous, somewhere between £10 million and £15 million. When their accounts came out later that year, they showed a profit of a mere £76,000 for the previous year.

European income had been keeping on the lights, quite literally, leaving the club just one season from disaster.

That season had arrived, and in the interim, player salaries had increased as all the top stars were offered new deals, and new players were purchased.

Things were bad, they shortly got worse.

The following month, when he appeared in front of the judge, in his case against the club and Whyte, Martin Bain’s lawyer told the court he believed the club was in serious financial trouble and would run out of capital by the end of the season. The judge believed him. He froze £500,000 in assets, in anticipation of a future court date.

Bain and the judge were right to be worried.

A lot of stuff about the club’s financial positon was already seeping into the public domain, in no small part because of more trouble with the taxman …

Part Eight: The Taxman Cometh …

On 10 August 2011, an astonishing thing happened at Ibrox. Sherriff officers came to the stadium, to serve paperwork on the club in relation to the Discounted Options Scheme, the Wee Tax Case, as it was known. An online journalist, Phil Mac Giolla Bhain – who, in fact, had been the man who brought the story of HMRC’s Big Tax Case demand to the attention of the world – had written a story earlier that week saying they were due; the club denied it and, as usual, the media ran with the denials and poured scorn on the idea.

The following day they all ran with the “exclusive” story, of course.

The sheriff officers’ visit was a crucial moment in this saga; it was the moment when things that had been going on behind the scenes momentarily came to light, like the tip of an iceberg, visible above the waves but hiding much more. The importance of it was not confined to the Whyte regime; it’s a moment that still scares the SFA.

The taxman had been investigating goings on at Ibrox for four years at this point, and whilst they believed that EBT’s per se were a form of tax evasion and were pursuing this vigorously, they already had precedent for saying that the Discounted Options Scheme was.

Discounted Options Schemes had been made illegal in 2003, and in November 2010, HMRC had won a landmark battle in the Aberdeen Asset Management case where they tried to apply retroactive punishment on that very point.

They presented Rangers with a bill for the Discounted Options Scheme almost immediately, but the club rejected the initial settlement offer. When HMRC had asked if side contracts existed, the club had flatly denied it.

By February 2011 HMRC knew that was a lie.

On 11 February, HMRC sent a letter to the club laying out a new payment demand, having revised their claim of November, adding interest and updating the claim to backdate it to a time they hadn’t even been aware of it at first.

HMRC’s communique also revealed their knowledge of the side letters.

The letter did not dwell on the matter, but reminded Rangers that they had previously denied this.

HMRC’s letter made it clear that it had been taken into account.

Rangers’ own legal adviser, Andrew Thornhill QC, read that letter and sent one to the club shortly afterwards, in which his advice was clear; plead no contest to the DOS EBT and pay the tab. He was particularly concerned with those side letters and that HMRC had discovered them; he knew that taking it to a tribunal would have been a losing battle where the club’s malfeasance would have been put out there for everyone to see.

Rangers decided to pay. They arranged a meeting with HMRC for March, where the two parties hashed it all out. We know this because the bill appeared in their April accounts, informing the wider world of its existence for the first time.

On 6 May, Craig Whyte took over the club. The bill was still outstanding at that point. On 10 May, Whyte told the Rangers fans that there was no tax bill outstanding; he admitted they were appealing the Big Tax Case, but didn’t mention the payable due on the Discounted Options Scheme.

Yet the very next day another meeting took place between Rangers representatives and the taxman. HMRC made it clear that the bill was due, immediately, pointing out that they had the power to levy further penalties and costs on the club if it didn’t follow at once.

They sent a further letter, to that effect, to the Ibrox club on 20 May, which was to be their final warning before additional action was taken.

That bill was due. That bill was unpaid, and that had been the status of it since the club’s own lawyer had said they should find the money and get it sorted out.

On 2 June, the sheriff officers served notice on Rangers for the first time. No-one knew about it, and the event went unreported, or even speculated on. It was to be two more months before the more famous visit by the taxman’s hard guys was reported in the press, and this one with pictures which made it undeniable to even the most hardened cynic or faithful supporter.

Pressures were mounting up on Rangers and on the shoulders of the Motherwell Born Billionaire. The club was embroiled in chaos. Board members had been purged. They had exited Europe, twice, in quick succession and now bailiffs had visited the ground.

The bill was still unpaid on 2 September. The taxman sent Whyte and the club a demand for payment which brooked no compromise. At the same time, a firm of lawyers had submitted a demand for £35,000 which was still unpaid, and they were taking the matter to the courts to get their own money, as fears that the club could go bust were growing inside Ibrox and elsewhere across Scottish football.

By the time Martin Bain and his lawyer got in front of a judge on 14 September things were already bad and getting worse. The court froze £500,000, money the club simply didn’t have. The judge accepted that there was a “real risk” of them going bust. A month after that, Donald McIntyre, their former finance director, put in a claim for £300,000.

Just six days after McIntyre made his move, on 20 October, the real crash came.

Part Nine: Vindication For The Bampots

At some point over the preceding months, a group of online bloggers and commentators had started to play an actual role in these events. The most famous of them was, and remains, an anonymous fellow who goes by the name The Rangers Tax Case. His blog was the first reference point for all of us who wanted an education in these affairs, and a place where the issues around them could be discussed and dissected.

There has probably never been a more important website in the history of Scottish football. It was where the information on Whyte was slowly, but surely, amassed and exchanged and it was the focal point for some of the campaigns that followed. But above all that, it was the first source of information we had on the scale of what Rangers had done.

RTC, as the site became known, went on to scoop the Orwell Prize for investigative journalism; it was an honour that belonged not only to the sites anonymous founder but to everyone involved in it, everyone who dug out a piece of information or uncovered a trail of breadcrumbs. You had to follow the work these guys were doing to fully get it, but it was, and remains, an extraordinary collective achievement, one that changed the game here forever.

I got involved in commentating on this saga at around about this time, working on a magazine with the team at another famous blog, Celtic Quick News. The magazine’s first issue came out in August 2011, so we were literally on hand to chart the course of the Craig Whyte disaster and all that came after it. Looking back on early issues now, and in the online debates that were going on, it’s incredible to me how far ahead of the media curve we actually were.

Yet for all that, we were disparaged by those same tired hacks.

They even invented a name for us, one we took and pinned on as a badge of honour and which we still wear today; the Internet Bampots.

Yet for that, for all the tremendous work these two sites and others were doing, the whole thing might have stayed an internet joke until the hammer came down in February 2012 had it not been for two brilliant investigative journalists in the mainstream press, Alex Thomson of Channel 4 and BBC Scotland’s Mark Daly.

These guys were on the ball. They brought the story to the attention of a wider audience. They put it on television, and that took it off the net forever. The Scottish mainstream press never admitted that we got this so right and they so wrong, but we’re not so leery of giving credit where it’s due. These two men uncovered much we hadn’t, and they published stuff the Internet Bampots would not have been able to. Without Daly and Thomson so much that was secret might have stayed that way for a long, long time. These guys, literally, shattered the can of worms.

On 18 October, the club made a twin announcement. First, John Grieg and John McLelland, two of the remaining directors on the Ibrox board, resigned, claiming they’d been isolated and marginalised in the boardroom. That was bad enough for Rangers fans to take, but the second announcement was a warning shot across everyone’s bow.

The club announced that it had broken off all relations with the BBC over a documentary that was due to air later that week. This was to be the first time, but not the last, that the club and the national broadcaster would come into conflict.

Two days later, on 20 October, Scotland found out why as the BBC broadcast a stunning documentary; Rangers – The Inside Story, fronted by the brilliant, and soon to be legendry, Mark Daly, a man who later went on to blow the lid off the biggest scandal in athletics.

It was the mainstream media’s first look at the hitherto untold (in their case) tale of Craig Thomas Whyte, and it laid out the story of the man who had taken over, and his early business history.

Whyte was not a billionaire, of course, and even the hacks had long since stopped referring to him as one. It was revealed later that the “Motherwell Born Billionaire” stories had originated with a PR firm who simply gave the Scottish hacks their instructions on what to say when people asked just how much money Whyte actually had.

The show blew the last remaining holes in his credibility, and theirs.

Rangers – The Inside Story was a startling journalistic achievement, for which Daly and his bosses ought to be proud; amongst the allegations it aired were claims that Whyte had been struck off as a director, in 2000, for a period of seven years; that investigators believed he had fraudulently run at least one company, Re-Tex Plastics, from behind the scenes during that time; that the company had been involved in a phony share issue and a tax fraud and that, furthermore, Whyte had even appointed a phantom firm of auditors to do its books!

The Internet Bampots had not found this stuff, but it had fully vindicated our view, held from the start, that Whyte was the dodgiest of dodgy geezers and not someone you’d want within 100 miles of any football club with which you had the slightest interest.

The documentary not only uncovered Whyte’s business history, but the rogues gallery with whom he’d been surrounding himself for years, including a convicted fraudster named Kevin Sykes. The program quoted Sykes during a 2001 courtroom appearance, where he laid out the Whyte MO for posterity. It’s worth pondering for a moment.

“What Whyte will do is buy a stake in a failing UK business, and it will be up to me, then, to assist him in restructuring the business, to be blunt, to be able to leave the unsecured creditors behind. Legally, of course.”

You could not have a wished for a more cogent, coherent, summation of what was about to happen at Ibrox over the next few months.

Whyte was no longer working alongside Sykes, at least as far as anyone’s been able to find out, but he was busying away behind the scenes, nonetheless. He knew, by this point, what the club’s financial situation was like, and he had a fair idea what to do next.

Because Whyte had already had some of the key meetings.

He had already started the ball rolling for what would happen on 14 February 2012.

Those meetings had, in no small part, already laid down the groundwork for the administration, and possible liquidation, of Rangers.

And the people who’d been at them?

The unlikeliest folk imaginable.

Or, at least, they would have been, anywhere but Scotland.

Part Ten: Saviours In The Shadows

Whatever his specific plans for Rangers had been at the start, Craig Whyte had known from the moment the full time whistle blew in the Europa League tie with Maribor that the club was heading for administration, and possibly worse.

Whether or not he’d taken the decision to start with-holding tax revenues at that point is irrelevant; he must have realised that was the logical route of travel. There was little point in paying some bills but not others, and he’d clearly already concluded that, in keeping with his previous strategies, that anything kept from the creditors now would be kept from them for good.

It was the business he was in. He’d been doing it for years.

Yet Whyte was in a slightly unusual position when it came to Rangers. This was not a private company one could simply wipe out and walk away from. This was a massive football club, with massive exposure and media interest, one which David Murray had once described, with typical hubris, as “the second biggest institution in Scotland after the church”.

In order to douse what he knew would be a firestorm Whyte needed friends, people who could help him smooth the path towards his eventual destination, and he needed guarantees that the club itself could emerge on the other side of it.

He reached out to the only people who could give those to him; to the governing bodies.

This is where the Rangers situation, already a scandal involving the club, the bank, Murray and a cast of characters out of a Hollywood movie widened to become one that involved the SFA and the SPL, and became of grave concern to everyone who cares about the game.

In early October, Whyte flew to London and met with two men, Neil Doncaster and Ralph Topping, of the Scottish Premier League. By his account, he told those men, at that meeting, that the club was in a dire financial position and that administration was near certain. In addition to that, he says he told them that the issues they faced were so tough that getting a CVA was “unlikely.”

Whyte has a difficult relationship with the truth, but there’s no reason not to believe this version of events. Indeed, emails followed confirming that these discussions had been had, emails in which the SPL CEO suggested that Whyte share with them a “road map” spelling out exactly what he’d do and how the governing bodies should respond.

This document already existed, dated 5 October.

It had been put together by a company called MCR. The code-name for the plan was Project Charlotte.

On 31 October, eleven days after the BBC had stripped Whyte in front of the nation, revealing his background, his business record and his modus operandi, as stated by his long-term business associate, and convicted fraudster Kevin Sykes, the SPL held a meeting to discuss the future of their television deal with Sky.

Neil Doncaster went to that meeting knowing that a plan virtually identical to what Sykes had alleged in court was already underway at Rangers. He knew it would involve debt dumping. He knew it would leave the tax payers millions of pounds out of pocket. He knew too that there were probably some football clubs who would suffer.

He did not share that information with the SPL board.

At that point, the Sky TV deal had three years left to run, but the SPL had an “opt out” option for the following year, and the meeting was to consider whether or not that option should be exercised in light of proposals which had been brought forward for a TV company owned by the league itself. Named Fans TV, it would have ended, once and for all, Scottish football’s dependence on the crumbs from Sky’s table.

The architect of the plan was Hibs chairman Rob Petrie.

At the 31 October meeting, it was decided to put off a decision until 21 November. Petrie and others left believing they had a chance to make the Fans TV case, and further work was done to make sure all the I’s were dotted and the T’s crossed.

At some time over the next few days Doncaster got his board together and told them something – we’ve never been able to fully establish what – that provoked fury around the table, and questions about what Doncaster had known, and when.

In addition, it killed the possibility of Fans TV stone dead.

Insiders spoke later of being told about a developing “situation within Scottish football” that would have left the SPL dangerously exposed. Doncaster urged the board to adopt a proposed extension to the Sky TV deal “without delay.”

Why did he do that?

The deal had three years left to run at that point.

What was the urgency?

Why was it necessary to re-negotiate an agreement which was iron clad?

What we know, for sure, is that the revised television deal, which was signed and sealed in short order, committed Sky to a further two years of Scottish football. By the end of the contract the full package would have been worth £80 million.

By this point, the SFA would have been in the know about coming events at Rangers, as Whyte’s roadmap required them to give guidance and support on the mooted “transfer of membership”, as well as information on the legal position of a NewCo.

It helped that the traffic of employees between the governing bodies and the club was working both ways at the time.

In June that year, Whyte had appointed a new CEO at Ibrox. It was Gordon Smith, who had resigned from his post at the SFA just a few weeks before, citing “family reasons”, just as the EBT story had broke.

Smith had departed with the praise of his former bosses, and Rangers manager Walter Smith, ringing in his ears, in spite of a tenure weighted down with gaffes and PR disasters, the last of which was a public spat with Livingston FC who claimed he’d gone around the ordinary procedures to discipline one of their players for diving.

His appointment at Ibrox certainly couldn’t have hurt a club that needed official sanction, and assistance, for its more secretive plans and schemes.

But in November 2011, public disclosure of those was still a ways off.

In the meantime, something else had been going on in the background.

At the meeting on 21 November, the SPL agreed to renew the Sky deal after the member clubs were finally informed of some of what was brewing at Rangers.

Ewing Grahame, a journalist on the The Telegraph, had a meeting with Neil Doncaster on the day the SPL signed the agreement.

In the article he published afterwards, he made a striking claim.

“The Old Firm remain the biggest draw for broadcasters,” he wrote, “and one of the conditions attached to the new document was that the Glasgow giants will continue to play each other four times in the league.”

In case anyone was in doubt as to this being the big story, Grahame’s article was headlined “Recession-beating five-year TV deal binds Celtic and Rangers to SPL.”

Yet in the piece, Doncaster claimed this had been a standard part of Sky’s TV deals “for years.”

Still, Grahame wrote about it as if it was new information.

Indeed, Doncaster’s claim seems ludicrous in light of what the public facts were then.

First, the clause would have been pointless.

Neither club had ever been remotely in danger of relegation. Neither could leave the Scottish league, even if there was somewhere to go, without a lengthy notice period and financial reparations, and the only way both would ever have done so was with the connivance, and probably at the behest, of television itself.

Some have suggested it was a clause to block league reconstruction proposals, the kind that would have expanded Scotland’s top flight and eliminated the prospect of the “four Old Firm games.”

This is nonsense too.

No TV company would ever have inserted itself into the game’s politics in such a manner, and clubs wouldn’t have stood for it.

Anyway, league reconstruction had been mooted literally dozens of times in the years of Sky’s Scottish football involvement, from 2002 onward. At no point was the issue of how it would affect television contracts ever raised in that time.

Besides, as many have pointed out since, the only conceivable circumstances in which this scenario might have occurred would have been Celtic or Rangers having a disastrous year and falling out of the top six; with the SPL’s odd structure, that possibility would have seen them play each other three times and not four.

But for a TV company to withhold cash on that basis would have been a serious risk to sporting integrity which no sane person would ever have allowed in a contract.

There has also long been some doubt about exactly how the clause was worded.

In Grahame’s article, he drew attention to the possibility that it might “save Rangers” in the event they entered administration and faced relegation or demotion from the top flight. Some have suggested that the clause didn’t mention “four Old Firm games” at all; that it was specifically concerned with “circumstances where either Celtic or Rangers were not in the league.”

If that’s the case, how did Sky come to the conclusion that this was likely? Rumours of administration were one thing … but at that point few people thought the club itself was in serious jeapordy. Only a handful of people knew better.

It so happened that Neil Doncaster was one of them.

Whatever the truth, this clause, which appeared to have come out of nowhere, was to prove crucial to the events which followed, and cast serious doubt on the real motives of the men running the league.

That was for the future.

The Big Tax case First Tier Tribunal had kicked off on 7 November, and the club and Murray sent their legal representatives into action. On 30 November, the club published accounts for the last time.

They weren’t properly audited, and never would be. They revealed a miniscule operating profit for the previous year of just £76,000. You didn’t have to be a maths genius to work out that between bills coming due, no European football, a raft of legal expenses and other things going on that the club was in serious peril, and that the cash would soon run out.

A day later, Whyte confirmed that he’d received a directorship ban from the courts.

In the background, the SPL and the SFA were still in talks with him over how best to handle the upcoming carnage at the club; now he’d confirmed the basis of the BBC documentary that had accused him of concealment and even fraud.

The governing body asked for more information.

In the meantime they continued to assist him as he plotted the wholescale dumping of the club’s growing debts.

Based on the announcement itself, they could have opened immediate proceedings against him, on the basis that he had not disclosed this before and was clearly not a “fit and proper person” to hold a position of responsibility at a Scottish football club, but they didn’t.

To do so would have exposed the club, immediately, to the full horrors of administration, without someone at the helm who was willing to go through that, and then beyond, to what would inevitably follow.

So Whyte had to be left in charge, with no official interference, to finish the job, or at least put the restoration of the Ibrox operation on the rails … and it didn’t matter what happened to the creditors, or indeed the game itself, in the meantime.

Up until that point, it was the single most damaging period in the history of Scottish football and one of the most disgraceful series of events in the history of professional sport on this island, and that was based only on what was in the public domain.

One issue that was already raising its head, and scaring the SFA press office stupid, concerned the Wee Tax Case, and the moment when it “crystallised”.

If anyone was in any doubt about the willingness of the governing body to assist the Whyte regime at Ibrox, they only had to look back on the earliest days of it, when a seemingly routine decision was made in relation to club licensing, one that, had it gone the other way, would have doomed Whyte before he started.

That decision still haunts the SFA today.

Part Eleven: Out On License

In October 2013, Celtic shareholders put a remarkable item on the agenda for discussion at the club’s AGM, which was due to take place on 15 November. The board sent an immediate letter out, asking the fans not to support this item, and gave no further comment.

The press interpreted that as the board wanting the issue buried; in fact, they opened up a line of dialogue with the supporters behind the scenes. On the morning of the AGM those who proposed the motion withdrew it from the agenda, after talks with club officials. The matter had not been kicked into the long grass; in fact, it was, and still is, very much on their minds.

The matter was adjourned. The club and the fans kept talking.

The motion was entitled Resolution 12.

Such an innocuous name for something so potentially devastating.

At its heart was a simple, but deadly, question;

On what grounds exactly were Rangers Football Club allowed an SFA license to play European football in the 2011-12 season?

The resolution asked that the club clarify this, not with the SFA but with UEFA, and urged Celtic to support a UEFA led inquiry into not only this affair but the way the governing body had dealt with the whole Rangers situation from the granting of that license until the liquidation in 2012.

The question as to Rangers’ European license had first come to light when the sheriff officers visited Ibrox in August 2011, to serve HMRC’s notice on the club in regards to the Wee Tax Case.

SFA regulations specifically forbid the granting of such a license when the club in question has a “tax liability payable” to Revenue and Customs.

As we’ve already established, this bill was the very definition of that; it was due by summer 2011 and it had been for months.

The club’s own legal advice was that it should be paid.

During those summer months, the SFA was involved in its annual audit of Scotland’s clubs in preparation for the coming season. The relevant paperwork, and all the club declarations, had to be in place by the end of May.

The existence of the Discounted Options Scheme was not a secret any longer. It had been in the public domain from April that year, when Rangers themselves published it in their annual accounts.

The SFA could not have been unaware of its existence.

The license was allowed, provisionally, at least, but by the end of June 2011 they had to meet UEFA’s own deadline and criteria, and at that point the SFA had an obligation to clarify this matter once and for by talking to the club, and if necessary HMRC, and inform UEFA of what they had found.

Again, this clearly hadn’t been done.

Calls to Rangers saw the whole thing put in a holding pattern; the club apparently told the governing body they were “in talks” with HMRC on the matter. A single call to the tax authorities would have clarified what that meant.

Whyte was stalling, and as we’ve seen from his history it was probably on his mind the whole time that he could let this one lie.

As we know, the bill was still unpaid in September that year when HMRC issued its “final warning” on the matter, and it remains unpaid to this day.

As with many other things it was folded into the carnage of the administration and what came afterwards.

By mid-September numerous football websites were already clamouring for the answers the Celtic fans would formally apply for in November 2013. Leading the way was the RTC site, CQN and Scotzine, an all-purpose site on the Scottish game.

By December, Stewart Regan, the Chief Executive of the SFA since Gordon Smith resigned, was forced to talk to the fans about the issue. His answers, given on Twitter, were vague, even contradictory.

He claimed at one point the bill had not come due at the point when the licensing decision was made, using the later oft-quoted phrase “crystallised” to describe the process.

He had his facts badly wrong.

That bill was due from 20 May, at the latest, and by mid June it had certainly become overdue as defined in UEFA FFP articles.

He seemed rattled.

He had reason to be, although none of us knew what they were until November 2013.

The truth is that Celtic’s board had been concerned about this issue going all to way back to the awarding of the license itself, and before the sheriff officers came calling at Ibrox.

They had queried the European license themselves, and received what they regarded as highly unsatisfactory answers.

Following that visit, they sought further clarity and, again, were unimpressed by what they’d heard.

They had never quite given up on the issue, or on others they believed were peripheral to it, and this was why they’d agreed to keep the lines of communication open with the supporter’s who’d raised Resolution 12.

As has clearly been demonstrated already, Rangers was a club floating on an ocean of debt at the time, and even though the bank were no longer holding anything over them anyone who could read a finance statement knew they faced a huge hole in the balance sheet without European football income.

In light of what happened later, it’s almost inconceivable to imagine the SFA denying them an avenue to money which was quite literally keeping on the lights, no matter what the club had done.

Yet had the SFA acted when they should have, and demanded that Rangers settle this bill immediately or accept the revocation of their European license, Whyte would have been faced with coming clean about his plans sooner, or finding the money to pay up.

They either abrogated their responsibility to check out the true status of that bill or they waved the European license through regardless; either way, it was another scandal in a growing series of them.

The ultimate irony of this, of course, is that it was all for naught anyway.

The Promised Land of Champions League income was never to be realised. Ally McCoist’s later maligned managerial incompetence took care of that, and they exited the elite competition against Malmo before Maribor turfed them out of Europe entirely.

It was to become a feature in everything that came to pass; the governing bodies would bend over backwards, even breaking their own rules, to assure the Ibrox operation as smooth as a passage as was possible, and here, as with later, it didn’t help them a bit.

Part Twelve: The Final Mile

On the night of 15 October 2011, the day after Donald McIntyre appeared in court to seize £350,000 of Rangers’ assets, and five days before Mark Daly stunned Scotland with his seismic documentary on Whyte, one of those football matches that, in hindsight, changes the course of the future took place at Rugby Park.

Whilst things off the field were, by now, spiralling out of Craig Whyte’s control things on the pitch had been better than anyone could have dreamed and Celtic appeared to have collapsed completely.

The Parkhead club went into that game ten points behind the Ibrox club, and badly in need of a lift.

Before half time, it all looked over … the league challenge, and the reign of the manager, Neil Lennon.

Kilmarnock had run riot.

The score was 3-0 to the home side.

All of us watching remembered what had happened to Tony Mowbray, caught in a similar storm, on 24 March 2010 when his Celtic team was destroyed 4-0 at Love Street against St Mirren.

He lasted less than 24 hours, being relieved of his duties and Lennon put in charge on the following day.

The second half transformation was extraordinary, made all the more so by an atmosphere in the ground that was electrifying from the moment the teams came out of the tunnel for the 45 minutes. The Celtic fans have rarely given such passionate, vocal, unequivocal backing as they did that night, and it lifted everyone out in the pitch in a club jersey.

The team rallied. They clawed back the deficit and might even have won the game.

They dropped points, but that night Rangers did too and the equation hadn’t changed. But something had. Although Celtic dropped two more points before that month ended, in a match against Hibs, increasing the gap at the top to 12, and pushing us into third, albeit with Celtic having a game in hand, something had irrevocably shifted in the dressing room and out on the park.

From that point on in the league, Celtic barely looked back.

Every match in November was met, and matched. Lennon’s boys were storming just as Rangers began stumbling. As off-field chaos continued to mount, McCoist’s team began reverting to type and blowing it in their own definite style.

Off the pitch, things continued to get worse.

Eight days after Whyte had confirmed to the world that he had, indeed, been banned as a director the club was rocked by yet another financial blow, this time delivered by Celtic themselves.

The clubs were due to meet, at Celtic Park, on 28 December, and it was custom and practice for the away side to receive its tickets and pay for them later. Celtic had been following events at Ibrox closely, more closely than most were aware, and weren’t about to join what was already known to be a rapidly expanding creditors list.

According to the Scottish media, who covered the story with typical hyperbole, on 9 December Celtic asked for the full balance – £350,000 – upfront, or the tickets would be placed on public sale to their own supporters.

Whyte found the cash from somewhere and the tab was duly paid.

Months later, with Rangers circling the drain, the same media shrieked that the Parkhead club was refusing to pay for its own match tickets up front. With their usual lack of grace and respect for the tension of the times they even accused Celtic of putting jobs at risk whilst the club was in the process of an administration.

Celtic refused to comment on such hysterical claims, and three weeks later, with the game out of the way, they paid the cash in full. At the time, they briefed that they were reluctant to part with cash, in advance, for a match that might not take place, and in the circumstances of that time, that position had seemed like nothing but good common sense.

A day after that story broke, Rangers settled with Donald McIntyre out of court.

The details of the final settlement were never published, but it couldn’t have been cheap.

By the time the match at Celtic Park came around everyone at Rangers knew the New Year was going to bring nothing but misery.

They went into the match with their lead at the top of the table reduced to a single point.

In the 56th minute of the match, Charlie Mulgrew whipped a corner into the box. Kirk Broadfoot, the Rangers defender, was the nearest to the ball but Joe Ledley, the Welsh midfielder, was more determined to get there, and he rose above him and nodded it home.

Parkhead erupted.

Celtic had been 15 points behind in early November, and even with two games in hand the psychological advantage Rangers had enjoyed was enormous.

By full time, Celtic were on top of the table.

Ally McCoist and his players were shattered, and in truth they never really recovered.

The whole club was on the brink.

2012 opened with another hammer blow, the news that the club had been banned from the Stock Exchange for not having a set of audited accounts in by the years end. This was, technically, another breach of SFA regulations but again, nothing was done, probably because the governing bodies already knew how this particular story would end.

The Tax Case tribunal, which had paused during the Holiday Season resumed on the 16th. It finished two days later, and the judges retired to ponder the issues and render a verdict.

It wouldn’t come for an age, and in the meantime things ran their course.

On 20 January, Andrew Ellis was appointed to the Rangers board. He had been involved with Whyte in the takeover, and would later tell another BBC documentary he had personally introduced Whyte to David Murray after the Motherwell Born Billionaire had sold him on his vision for the club by giving him the name of a mystery man who wanted to invest.

The man was none other than Prince Albert of Monaco, a man Whyte said he “saw every week.”

He just never elaborated, and Ellis never asked him to.

By then, time was quickly running out.

On 31 January, the intrepid Scottish media, shocked into life by the news that Whyte wasn’t what he’d seemed, and no longer able to rely on PR releases to guide them through the maze, actually ran a major story in the case.

The Daily Record told the country how Craig Whyte had sold four years of future season ticket revenues to a company called Ticketus, in order to obtain the cash that had let him pay off Lloyds Bank in the deal which saw him get control of the club.

Keith Jackson shamelessly claimed this as an exclusive, and he has got a lot of mileage out of it since. Indeed, whenever the mainstream press wants to defend its shattered reputation, this is one of the stories they point to.

In truth, the story itself was months old. Jackson had written a version of it in June 2011, but Whyte had brought in lawyers and successfully spooked The Record into blocking it.

Yet even then, the story wasn’t as “exclusive” as he’d claimed.

In fact, the Ticketus story was broken by the bloggers.

The Rangers Tax Case site and the Celtic fans forum Kerrydale Street were foremost amongst them. The Companies House document from which The Record got their story had already been published on both of those sites, and all the pieces put together, a fortnight before.

The Internet Bampots had made all the crucial connections, with some even scrutinising previous Ticketus deals for clues.

On 6 June, a full week before Jackson’s “exclusive” first ran, one of the KDS posters wrote, with remarkable prescience, “I reckon the probable solution to this is the most obvious. It’s season tickets we’re talking about here. Who gives out loans against future season ticket revenue? Ticketus. How much is involved here? Roughly £52million. What were the total sums pledged by Whyte for his takeover over four years? Roughly £52million. So what’s happened here? Whyte has pledged future Rangers season ticket cash to pay for his takeover.”

The numbers may have been off, but the guy had it right on the nose.

The story hitting the tabloids was, however, a minor turning point.

Rangers’ fans, for a long time asleep at the wheel, finally woke up to the reality of the position, on the same day the club sold its star striker Nikica Jelavic to Everton, for £7 million.

Five days later they crashed out of the Scottish Cup, at a half empty Ibrox, against Dundee Utd.

A day after that, the BBC’s Mark Daly struck again when he revealed that Whyte may have lied in testimony he gave to a Glasgow court.

The allegation centred on a civil case dating back to December where he’d appeared in connection with an unpaid debt to a firm that had done building work at Castle Grant, his lavish country home.

During his testimony the prosecution asked him about his seven year directorship ban. Whyte said he couldn’t remember what it had been for. When asked if it related to his treatment of creditors, Whyte had denied it.

Those records were gone, or so he’d believed.

Actually, Daly had obtained them and within them was a damning paragraph from the judge in his case.

Only one figure connected with this whole saga would ever be subject to such withering criticism from a judicial bench, although time may change that.

“The assets of the company were put out of the reach of the creditors … the degree of recklessness shows Mr Whyte is thoroughly unfit to be a director.”

Whether he’d committed perjury or not, it was another warning to the SFA about the kind of man they were already tucked up in bed with.

The time for robust action, to save the game from further embarrassment, ought to have been there, and then.

The decision to continue dialogue, to wait for Whyte to send them further information, could only have been made by an association that wanted him in place until certain other conditions had been met.

No-one inside or outside Ibrox would have blinked had they convened a hearing that very day and kicked him out of Scottish football at once. That would have left the club rudderless, going into administration without a man at the helm who’d been over the ground before.

Project Charlotte was, to their eyes, the only route through for Rangers.

So, again, they did nothing at all.

The SFA would finally declare Craig Thomas Whyte “unfit and improper” on 23 April 2012.

By then, a lot of things happened that didn’t have to.

On 13 February Rangers announced that they’d enter administration the following day.

For the supporters on both sides of the Glasgow divide Valentine’s Day would never be the same again.

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Guilt By Association? Did The SFA Help Perpetrate A Fraud?

20205757.JPG-pwrt3Over the last week, I’ve written various pieces in relation to arrests concerning the establishment of Sevco, with the emphasis on looking at how it affects their club, but there’s a bigger issue, by far, that no-one seems to want to touch.

Back in 2012, when the NewCo was being established, there was concern on some of the blogs, this one included, that proper due diligence hadn’t been done by the game’s governing bodies.

Over the course of the next 12 months, that concern grew.

The gravest concerns we had revolved around – and continues to revolve around – the notorious Five Way Agreement and the way it is structured, as well as the people who actually signed it and were party to its creation.

This website has already described that as the most dangerous document in the history of Scottish football, and a phalanx of other sites have been clamouring for its full publication since then.

A version of it has already been leaked online, and distributed widely.

It is a document that has no parallel in our sport.

Nothing like it had been commissioned before or since.

It is, it will remain, wholly unique.

What we had is a group of senior officials in our game sitting down with people who weren’t even football administrators – Duff & Phelps, let’s not forget, were parties to this – as well as the owners of the new club, to bend regulations and ignore others in order to get them a berth in the Scottish football league structure, at a time when that was up in the air.

Back in November last year, this site published an article called Five Way To Hell. We asked a simple, but deadly, question, one the media has still not taken up, as we’d hoped, nearly 10 months later.

Was the SFA, inadvertently or not, party to a fraud?

Let’s be clear; I am neither accussing them of that or even saying that a fraud has been committed.

But these events are subject to legal action, and are going to court. I won’t discuss those events or those who were involved for that very reason.

I am simply asking that if the defendents are found guilty, and those charges proven, was the SFA a party, willingly or not, knowingly or not, to a crime?

And if the answer to this is yes, what might be the consequences for our national sport?

The Five Way Agreement bears the stamp of Duff & Phelps and that of the company calling itself Sevco Scotland Limited.

It seems clear – and it was being debated, openly, even at the time, most notably by the late Paul McConville – that this should have been questioned by those running our game.

The legal agreement to purchase the assets of the club was agreed in a different company name; that of Sevco 5088.

It has been alleged, openly and freely, by people associated with this takeover that those assets ended up in Sevco Scotland Ltd by less than exemplary means.

That’s me being diplomatic, and staying within the confines of legal allowance … but Charles Green himself told a national newspaper that, in fact, he had established Sevco Scotland Ltd as a vehicle by which he could “dupe” Craig Whyte and others.

That’s a matter of public record.

What some of us were asking – and still are – is what steps the SFA took at the time, or has taken since, to establish whether or not they are partly culpable if it turns out that Whyte and Worthington have a legitimate claim here?

A new wave of arrests has been made in connection with this, including that of Green himself.

Imran Ahmad is refusing to set foot in the UK until all this is resolved, fearing the legal consequences if he does.

Whyte himself has been huckled, and was subject to the full lynch mob treatment after being charged.

In spite of people hoping it had gone away this story has exploded all over again as any sensible person could have predicted well in advance.

It’s not going away.

I disagree with almost every single statement that comes out of the Rangers Supporters Trust, but they were 100% right when they said the SFA failed in its responsibilities to football when it allowed men such as Green and Whyte to take positions at Ibrox.

Regardless of the outcome in this case, those men were grossly unfit to have a role in running football here.

In my personal view the SFA exacerbated that failure this year in allowing Dave King on the board.

I’m not even going to dwell on the obvious – that the RST would have reacted with typical hysteria had the SFA board actually done what they’re now suggesting they should have.

The principle remains correct.

It was a failure of football governance and a staggering one at that.

What in God’s name were the SFA and the SPL legal teams doing?

If a blogger like Paul was asking questions, why the Hell were none of them doing the same?

How hard was it to ask for proper clarity on the issues, and to enquire just why the purchase agreement hadn’t been adhered to?

It’s not like it’s a small thing; this was a legally binding piece of paper, directing the disposal of assets in a company liquidated for non-payment of tax and other debts. This was serious business, being conducted in full public view … and the whole lot of it ended up transferred to another company entirely, and in circumstances that are going to be the subject of court proceedings.

The cavalier way in which these people went about this is disgraceful.

None of these issues is new.

No new facts have emerged here.

None of this has been raised just in the last four weeks.

I’m not inventing things or discussing the case itself … there were issues which were being raised at the time which the SFA and others had a duty to get to the bottom of, and it seems they never even bothered to try.

Those of us who’ve followed this have long suspected that the governing bodies were so concerned with getting a club calling itself Rangers into the league structure that they overlooked a lot of things they ought to have been on top of.

They allowed themselves to be rushed, to be bullied, to be so intimidated by threats that the takeover might collapse that they simply let Green and others run over them with a tank.

There’s ample evidence for that, such as the memo that guaranteed no title stripping and the way in which the Sevco “transfer ban” allowed the loophole which saw eight players come into the club during a period when they weren’t supposed to have been able to add to the squad.

The granting of a temporary SFA license before a lot of these issues had been resolved was, in my view, absolutely gutless and a devastating strategic error which put the Sevco owners in the driving seat in terms of any future negotiations.

From that moment on, any threat to prevent the club from playing games unless it agreed to a raft of conditions was as empty as a Dave King promise and everyone involved knew it well.

The people running the game in Scotland have given up any pretence of corporate responsibility in recent years.

That Neil Doncaster and Stewart Regan remain in post three years after the scandalous summer of 2012 is an outrage for which all of our clubs are, in part, accountable, and Celtic as much as, if not more, than others.

Celtic’s Peter Lawwell, after all, is the one who continued to lend legitimacy to Neil Doncaster far beyond the point where it made any sense at all to do so. Doncaster is a busted flush, widely regarded as a joke by every supporter of every club in the game. Quite why anyone would wish him to remain in his current role is a mystery only those involved can clear up.

Neither he, nor Stewart Regan, two men who between them publicly declared our national sport worthless without Rangers in it, should be anywhere near Scottish football.

It’s instructive too that Alan McRae, elected SFA President on 9 June this year – months ago – has yet to offer any vision, any blueprint, any guidance or leadership on these or other issues in that time.

If there’s change in the air, there’s scant evidence of it.

We really do tolerate an appallingly dearth of ambition or imagination in the way football is run here in Scotland, and we’ve allowed glaring holes in the regulations to be exploited without even bothering to close them and assuring it can’t happen again.

The decision to grant Fit & Proper Person status to King and Murray, when both were on the board of a liquidated club and the chairman has a string of fraud convictions, was not only weak but dangerous as it proves the authorities have learned precisely nothing from the Whyte and Green cases.

That these things have all gone on at one particular club – the one they told us was “too big to fail” – makes it all the worse, because there’s no disincentive for anyone at the club to take a position there with less than honourable intentions.

Nobody should be under any illusions about the competence, or lack thereof, of those who run football in Scotland.

This isn’t even a debating issue any longer.

To call them useless would be to give them more credit than they deserve, but with these arrests we’re in uncharted waters.

There is surely not a single person in our game who was not fully aware that questions existed in relation to thse matter at the time – as Paul McConville had documented extensively – and certainly no-one in the slightest doubt t after November last year.

These assets were sold dirt-cheap, as has been acknowledged everywhere.

The creditors of OldCo Rangers will probably receive pennies in the pound if they are very, very lucky.

This was an unpardonable series of events, and it was the responsibility of the SFA and the other governing agencies to assure that following Whyte’s running of the club that everything in the aftermath was above board.

All this self regulation stuff is cobblers.

They allowed Sevco Rangers to investigate itself over some of these issues, and that particular scandal tells you just how rotten they know this situation actually is, where they couldn’t afford full and independent scrutiny of any aspect of it.

But now these matters are heading for a courtroom, and don’t be surprised if there are shocking revelations along the way, especially where Whyte is concerned, with his penchant for keeping meticulous records of conversations, including on tape.

The Five Way Agreement is just one aspect of all this that those at the top of our sport thought – hoped – would forever remain a secret, buried from view. Now even they have to conclude that there is not the remotest possibility of that happening.

It’s all going to come out.

We are going to get answers, one way or another.

And when they come heads are going to roll, and that’s the very best people can hope for.

My last article on this site suggested that Peter Lawwell of Celtic consider his position at the club and how he wants to be remembered by history. I said it’s not too late for him to save his reputation.

I think the reputations of the people involved in this scandal are beyond saving.

What they have to worry about now is their freedom.

A lot of people in Scottish football must have serious trouble sleeping at the moment.

If so, then good.

That, at least, is a measure of justice for sins past because a lot of them are guilty, even if it is only by association.

A more definitive form of justice might just be on its way, and in a court of law instead of the one of public opinion.

A verdict there has consequences for us all.

(Writing is my full time job friends and neighbours, and the support of my readers is vital. If you want to support it, you can make a donation at the link. If every reader was able to donate just £5 a year that would keep the site going strong well into the future. Many thanks in advance.)

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Shooting The Messenger

stock-footage-a-man-in-a-fedora-typing-on-a-vintage-manual-typewriter-film-noirThere are things you get used to when you do this sort of thing.

One of them is the criticism of those who’s closed minds don’t want exposure to the truth, the kind of people who would rather live in ignorance than confront reality.

There are a lot of them in Scottish football.

The last article this site published – on Dave King and why his fortune might not be as large or readily available to Sevco as many of their fans, and our media, seem to believe – was extraordinarily well received, at least in terms of the number of hits it generated.

A lot of those who read it were the supporters of the Ibrox club, and it’s fair to say not all of them liked it.

I understand that. But shooting the messenger … that’s harder to comprehend.

I have a long history with these people taking pot shots at me.

Phil has the same issue, and Paul67 too.

Forget that we’ve been right on the money far more often than we’ve been wrong.

Forget that King has behaved exactly as we predicted up until now – putting not one penny of his own cash into the club.

They don’t want to hear any of it.

Especially not from us.

Check out their forums if you don’t believe it.

The second they realise that a challenging article came from a “Celtic site” they shut down at once.

This marries bigotry with stupidity in a way that makes me want to gawp in amazement.

In truth, though, any blogger who consistently tries to paint a picture of the real world for these people – and I include some of their own; McMurdo has been required reading in the last few months, as one of the very few who won’t touch the Kool Aid – is branded an idiot automatically.

I can take being tagged like that.

What I won’t take is being called a bigot myself.

It’s a charge I refute utterly and anyone who throws it around better be prepared for consequences; I’ve threatened to sue for that in the past and I repeat that threat to anyone who’s game enough.

Simply put, myself and others are going to keep telling these people what they don’t want to hear.

And they’re going to continue resisting that.

Because the truth hurts … and the truth is all I have for them.

Why do we do this so much?

People ask me that all the time.

There are a few reasons.

For one, they are sheer entertainment in a way that has nothing to do with sport, or football itself.

To me, now, they’ve become the ultimate cautionary tale, the example future football fans will come to study in order to learn what not to do as a support, in much the same way as business school students will study the bank who let them, and Murray, live it large only to be brought down when things took a turn for the worse.

I think the Rangers fans will make an excellent case study.

I find it fascinating that so many people can wilfully unplug themselves from facts, logic and even common sense and go on believing that the world is what they wish it were, rather than focus on what it is.

I find it incredible that they can ignore clear evidence and wrap themselves in the comfort blanket of fairy tale ideas as if they were little children who still believe in Santa.

For what is a sugar daddy owner to football supporters but Father Christmas himself, in a good suit?

First it was Murray they believed in, then Whyte, followed by Green and now, finally, they’ve arrived at King.

Along the way they’ve destabilised their club to the point where a man of genuine means, who could play Santa until the cows come home, has become their implacable foe instead.

And this, in itself, is an achievement, of course.

They’ve turned an honest-to-God “nothing personal, strictly business” type into a guy who might well shoot them just to watch them die.

I have the luxury – we have the luxury – of being able to indulge in this guilty pleasure, because we do so from a secure vantage point.

We are the biggest club in Scotland, without dispute, and liable to be that for a long time to come.

There’s no escaping from that fact for them, no matter how much they might wish it were otherwise, and we’re comfortable enough with our position going forward that the occasional diversion to check out the parlous state of the club that kids on it’s our greatest rival is something we can easily afford.

If our position were not so strong, would we be focussing so much attention on them?

Of course we wouldn’t.

We’re not like them, gazing around, looking to pick fights, when we should be trying to drag ourselves up.

Their club is in a chaotic state.

Instead of focussing on that, some of their fans are still chasing dreams of “nailing Celtic” in a discredited “case” over land.

I mean … seriously?

We do this because we can, because our own club, well run (for the most part) and with a plan (whether we like it or not) can navigate whatever troubles come its way. We’re not constantly dealing with crisis at every turn.

They are worthy of our study because of the sheer lunacy of their behaviour.

We’re trying to find method in the madness, perhaps, and we can afford to take time out to look.

That’s the first reason.

The second reason we do it is that we like it.

There it is. I confess. We enjoy their suffering, and why not?

They sure as Hell enjoyed ours.

I rememeber their nine in a row. It’s what made stopping the ten so thoroughly satisfying, and these last few years into something almost blissful.

That’s an unpalatable truth though, one that’s hard to take because it makes me wonder if we’re any better than gawkers at the scene of a car crash, which is undoubtedly the best representation of them I can think of.

They are a car crash, happening in slow motion.

They can hide behind that pitiful “obsessed” nonsense too, and for as long as they like, but we’re no more obsessed by them than we are at the circus freak shows which once drew a crowd.

There is something in human nature that makes you slow you own vehicle down when you see emergency service lights on the motorway, surrounding a hunk of twisted metal.

Maybe we’re sadists.

Watching them flail around these last couple of years has definitely been fun.

Why else do they think a lot of us have OD’d on jelly and ice cream?

The hint is in the stuff itself.

It’s party food, but it’s kids party food, which should tell them how seriously we really view them in our lives.

I am amazed more of them don’t get that.

The final reason I do this so much is that this mind-set of theirs has been truly damaging for Scottish football.

If the only effects of it were to their own club then they would be justified in telling us to butt out and mind our own business.

But when the governing bodies and the media try to bully other clubs into accepting the wholescale bending of the rules, when league reconstruction is constantly being mooted as an alternative to clubs reaching the top flight on merit, when the atmosphere at grounds is polluted by the most appalling, retrograde singing from a section of their support and whilst they continue to indulge in a re-write of history that excuses the most scandalous practices ever seen in Scottish football whilst they simultaneously play the “victim card”, telling the world they have been unfairly treated … well that is our business and no mistake.

All the calamities which have struck them in recent years, whether you’re talking about Sevco or those which obliterated Rangers, were self-inflicted. This constant casting about for people to blame not only damages our game but stops them learning the lessons of history.

They blame Craig Whyte for their demise, ignoring the fact that had they been in good financial health and able to meet their funding requirements as per every other club in the leagues that he wouldn’t have needed to take such drastic action when they were knocked out of Europe.

When you boil it down, their real complaint against Whyte isn’t that he was a bad man. It’s that he wasn’t a rich one, as their media friends had led them to believe. He didn’t have the cash to continue funding a playing squad the club could not afford.

They think we’re stupid, that we’ve forgotten that for a while they were gleeful at the prospect of “starting fresh” without debts.

They spent their first year as Sevco boasting about it, and King was still boasting about it last week, even as BDO continued to sift through the rubble out of which they crawled, blaming everybody else.

They are back in the courts this week too, as the Big Tax Case drags on, another area where they claim to have been the targets of unscrupulous people, as if the Unseen Fenian Hand has reached as far as HMRC and turned it against them.

You really have to take your hats off to them for the scope of what they allege.

It really is something.

In their world, officials at BOS and Lloyds colluded against them.

HMRC came after them out of hate.

Every club in Scottish football lashed out vindictively.

At the same time, numerous Scottish based public bodies were coming together to let Celtic have land on the cheap, and in violation of the law.

This is mind-boggling … a kind of multi-track, multi-agency, multi-level conspiracy involving political corruption, misuse of company funds and public resources, cover-ups and deceit which could send people to jail if true … based on jealousy of a football club.

That is the definition of paranoia.

And to think they used to call it “the Irish disease.”

What’s the truth about all this?

That the governing bodies of football, run by one of their former directors, one heavily implicated in their scandals, let them away with murder and continues to.

That the bank which gave their owner unlimited access to funds, with which he built their ego-stoked “glory days” and let them run up debts in the tens of millions before the financial crash of 2008 stopped all that in its tracks, was the same one that almost closed Celtic’s doors over a deficit of only £7 million.

That they get an easier ride from the newspapers than any other football club in the UK.

That we here in Scotland invented “the Internet Bampots” to counter that.

That we re-wrote the media lexicon to include the phrase “succulent lamb journalism” and were the nation whose press once sat in silence at a media conference after a calamitous result for Rangers because no-one wanted to ask a negative question and there were no positives to be had.

That the whole of our political and media class, as well as the governing bodies themselves, ignored sectarian singing for decades and a religious based signing policy which should have made them a pariah club across world football.

That even the scandalous behaviour of a section of their support, in numerous European cities, including Pamplona, Barcelona and Manchester, was excused – and even blamed on the fans of other clubs.

That they still claim HMRC had no basis to go after them in the first place, and have distorted the verdict in the case as it stands as “a victory” when, in fact, it highlighted numerous breaches of tax rules and revealed a pattern of concealment and dishonesty which is breath-taking.

I’ve long argued that I, personally, do not care what the final verdict in that case ends up because that will simply tell the world whether their smart lawyers dotted the I’s and crossed the T’s properly and so kept their tax scam “legal.”

I’m more interested in whether or not it was moral.

We know the answer to that one.

The consequences we see for society are pretty clear. It was anything but.

In only the second article for this site – “More Than A Sports Story” – I examined those consequences in terms of hard numbers and it still blows you away to go back and look over today.

Through all this, I’ve said, repeatedly, that I do not hate the club that plays out of Ibrox.

There is a section of their support, mired in sectarianism, fuelled by paranoia, wallowing in a superiority complex that is woefully misplaced, which I despise, and I make no secret about that.

You know the ones I mean; those who proclaim their patriotism by making the Nazi salute.

Those who “honour” their “culture” by reminding the world every single year how backward it is.

Those who think hiding behind abused children and even clambering onto the corpses of the dead, is a way to score cheap points.

It is impossible not to loathe such people.

They are uncivilised scum.

They are what we call the Huns.

Furthermore, I would argue that many of their “fellow fans” feel the same way about them.

I know they do.

I know for a fact they do.

I’m going to keep highlighting those people too, because the game (and their club) will be better off when they are rooted out of it.

All of this poisons our game here.

The scandals, the corruption, the rule bending, the bigotry, the Survival Myth and the Victim Myth.

They all feed into a perception, which our media is happy to promote, that our game is a mess; that we’re a basket case country instead of simply one with a single, renegade, basket case club which got “too big to fail” and then failed anyway, changing our perceptions of football reality overnight in a way a lot of people still don’t accept.

But of course, what it really did was introduced that reality to a world which had lived in denial of it long before the Internet Bampots got here.

The real problem they have with us is that we keep trying to make them confront that fact, and all the unpleasant truths that go with it.

They can shoot the messenger all they like.

Their problems won’t go away.

We won’t either.

(I’m a full time writer and the support of my readers is what keeps me goingr. If you like what I do, and are able, and want to support the work the site does, you can make a donation at the link. If every reader was able to donate just £5 a year that would keep the site going strong well into the future. Many thanks in advance.)

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The Wealth Of Kings

JS65562844Amongst the many debates and discussions that are being had in Celtic cyberspace about the potential for Sevco to rise again, one has the power to chill the blood of the Ibrox supporters like no other.

It’s the debate over just how much money King has, and is able to invest in the club.

This is a discussion and a debate the media would rather not have.

There’s a good reason for that, as you’ll see.

Some of what I’m about to write is conjecture, but it is conjecture based on hard evidence.

Not all of this is my own work. There are guys on the Scottish Football Monitor site and elsewhere – with a special mention to BarcaBhoy, whose piece on this is what got me interested – who have been beavering away on this subject for many months.

I thought it was about time that it was all dissected and presented in a single article.

Before I start, let me tell you that the news for Sevco fans isn’t all bad. Because this website has accused King of being self-centred and greedy, determined to hold on to his gains (ill-gotten or otherwise) come what may.

We would like to apologise to him for that.

The truth is he might not actually have the money we all thought he did, and even if he has there are significant obstacles to Sevco ever seeing any of it.

Let’s start at the beginning shall we?

Dave King is a guy I’ve been interested in for years, since the moment when he “gifted” £20 million to David Murray’s Rangers.

He had the kind of “rags to riches” tale that kids starting out in business can only dream of, moving from Castlemilk to Johannesburg and amassing a fortune.

What kind of fortune? That’s the question a lot of people want answers to.

Before even that, on the very night he gave Rangers the money, I was curious as to how he had done this.

This was a country which, at the time, half the world was imposing crippling sanctions on.

It was run by a racist government and a highly bigoted class of people.

If you were a white South African, especially a European, you were in good shape.

If you weren’t, you had problems.

It almost seems inconceivable that a man could have gone over there and made such vast sums of money as the Scottish media likes to tell, and done so in a way that was wholly legitimate.

King, as we know, was actually engaged in all manner of activities.

These allegedly include (but are not limited to) money laundering, currency fraud, running a Wolf of Wall Street style “pump and dump” of company shares … the list went on and on.

King’s battle with the South African tax authorities began with a company called Ben Nevis, which King controlled and which his government said owed them a fortune.

Here’s where things get technical, but I’ll try and keep it as straightforward as I can.

That fortune has been estimated to be in the region of £200 million.

The Scottish media loves to hold that number up, not as proof that King was a crook on a massive scale – which is what that number actually reflects – but as proof that he was unbelievably wealthy.

But was he? The short answer is “yes he was.”

Relatively speaking. And by that I mean relative to people like us.

What does that figure actually represent though?

Well before Ben Nevis came Specialised Outsourcing, the company King founded and who’s shares he traded in, to enable him to set up Ben Nevis in the first place. How much did he get for those share?

Somewhere in the region of £90 million.

So already you see, we can already pin his wealth down to roughly half of the reported tax demand.

Which will come as a surprise to those who hear “£200 million in back taxes” and assume a personal fortune twice or three times that high.

Not in this case.

And why not? Well, it gets better.

Let’s look at the tax demand itself.

When you strip it down, it isn’t all that it looks.

For a start, it’s less than has been reported; some £142 million when you factor in the exchange rate.

Regardless, this wasn’t a fine designed to grab some of King’s personal wealth.

It was a fine designed to wipe him out, to far exceed the actual amount the South African government estimated that he’d tried to conceal.

This is far from being unusual in tax cases where they are not alleging late payment or a series of mistakes; this was a fraud case and they acted accordingly.

Their total includes a demand for back taxes, yes.

It also includes a whopping (but not extraordinary) 200% penalty.

Plus late payment interest. Plus fines.

This reflected both the tax crimes and breaking the country’s strict exchange controls, which I’ll get to shortly.

What else do we know, for sure, about the value of King’s own holdings in Ben Nevis?

Well, the company itself pled “no contest” to its share of fines and debts, and settled with SARS for an unknown sum.

But King, knowing that was coming, and knowing he couldn’t hold them off (and he was right; when they were on to Nevis he had no choice) wanted to make sure he had his own wee nest egg squirreled away.

He had to pay lawyers’ fees, bank charges and then there were the various hits he had to take during the period when he started liquidating his assets to transfer them elsewhere.

(Liquidating assets always means getting less for them than they are worth … ask HMRC).

He enlisted the help of a number of top bankers, in the hope that he could hide the cash where SARS would be unable to find it. Unfortunately, he left a paper trail which SARS followed all the way to the banks themselves.

And lo and behold, the crooked bankers helping him had painstakingly minuted the meetings.

Those minutes laid bare exactly how much he was putting out of reach from those chasing him.

It bears scrutiny, and will surprise many.

The following comes from email exchanges between executives at the now defunct Bank of Bermuda, who had ties to HSBC.

“What we are doing is selling all his investments in the name of Ben Nevis,” one reads. “That is, a £10-million portfolio with Barclays Private Bank, and two Royal Skandia portfolios (managed by [Cape Town hedge fund firm] Alpha) amounting to approx. £3-million.

“There is already some £50-million on depo with Barclays Private Bank (he has a long-standing relationship with Sir Anthony Richardson).”

Roughly another £4 million was added to that with the sale of other portfolios.

In addition to that were the transfer of assets including his shares in what was then Rangers.

See, like most people of vast wealth, King liked to spend.

His personal assets at the time were worth a fortune, including private jets, vineyards, property and paintings.

In fact, it was one of those paintings which got him into trouble. He bought a piece by a famous South African artist at an auction, courting, and loving, all the media attention that went with that.

This media coverage surprised a senior SARS investigator called Charlie Cripps, who read of King’s purchase at breakfast one day.

He was intrigued, and asked for the King file when he got to his office.

Cripps found that the Castlemilk born businessman had declared an annual income which was a mere fraction of the total cost of that painting, and from then on he started to dig. He found King’s other purchases in due course.

The media likes to paint King as some kind of whizzkid.

Well, this kind of stupidity was not what you’d have expected from Gordon Gekko or Keyser Soze.

We know that prior to the the final settlement with the South African government they had already seized many of these assets, worth somewhere in the region of £30 million.

As BarcaBhoy has pointed out in his excellent analysis, this would not have reflected the value King paid for these assets; he would have taken a loss, maybe even a big loss, on nearly everything.

Indeed, we know the £20 million that he “invested” in the David Murray adventure was gone.

One thing comes out in his benefit, and not a lot of people realise it.

This £30 million in asset sales forms part of the “final settlement” figure.

Taking this into consideration, this would have left King with a fortune of around £40 million … still very substantial by anybody’s standards, and you can throw on a few million more in bank interest if you feel generous.

But then you must subtract the cash value of his final settlement with SARS – a further £16 million plus – along with the fines he paid on each separate charge, and you hit a mark which puts him somewhere in the £20 – £25 million region.

A lot of money.

But not “off the scale” wealth.

To put it in some kind of perspective, Fergus McCann had a personal fortune of nearly £20 million when he took over at Celtic.

To go even further, and take a local example, our own Willie Haughey has a net worth of over £140 million.

Now, at this juncture, let me tell you that King has not been idle during all this time.

He has other investments, other companies, but we can infer from his declared tax returns (and these, you would think, will be legitimate this time) that his annual earnings aren’t massive; a couple of million per annum.

We know this because when his assets were frozen he petitioned a Guernsey court to award him a stipend for “living expenses”, which BarcaBhoy estimates could have given him an income of about £1.6 million a year … these expenses are normal in legal cases where assets have been been frozen, and usually reflect median annual earnings.

Yet, according to reports in South Africa he has largely recouped the money SARS took from him.

As before, however, the bulk of this personal wealth is tied up in the share price of his companies, and this time the government is watching every move he makes. Another Specialised Outsourcing type scandal is impossible.

There is a difference, you see, between “paper money” i.e. what someone is “worth” in terms of the value of their holdings and shares and actual money sitting in the bank.

His current business venture is, ostensibly, worth another £50 million plus when you look at its share price.

His daughter, who he recently appointed to the board, is said to have a “net worth” of £50 million, due to the “Family Trust”, which is simply a collection of share portfolios and other such “assets” whose value can fluctuate radically.

“Realising” that number would mean selling off shares, and the minute the King family started to bail the share price itself would tank, and the value would fall rapidly enough as to greatly reduce their overall take.

Added to that, the tax man would want his cut.

It’s possible too that King himself may have salted away cash elsewhere, cash that even the South African government doesn’t know about.

The trouble with that money is that it’s largely out of reach in terms of re-investing.

It’s been siphoned off to avoid prying eyes, as a personal fortune, the kind that will see you and yours into perpetuity.

To start investing it in something as high profile as a football club – where everyone knows you have interests – draws attention to it.

That brings the investigators buzzing around like flies.

King has already had significant problems with SARS; he doesn’t want to invite any others.

So how much “actual cash” does King have to hand?

From the above numbers, somewhere in the region of £20 – £30 million.

Yet let’s give him the benefit of the doubt here, because he’s a smart guy, and a slippery SOB, and say he could raise as much as £100 million if he really had to.

If he could liquidate his share portfolio without taking a hit, without legal consequences, without drawing attention, let’s say he could do that.

It’s probably fanciful, but let’s speculate for a moment.

Now for openers, it falls way short of what the media estimates his “net worth” to be.

It’s a half what the more “conservative” estimates suggest and a quarter of what the more star-struck appear to believe.

Wikipedia, without sources of any kind for the number, estimates it at over £600 million … which would put him into Sunday Times Rich List territory, easily, yet he’s woefully absent from it’s South African top 25. The very fact that it’s his daughter – not King himself – who makes it into the top 100 with her £50 million tells you how difficult things are for him to even appear to have that kind of cash.

Yet it’s still a colossal fortune, the kind of money we’ll never see in our lifetimes.

So let’s be generous. Very generous. Assume he can raise £100 million.

Running a football club is an expensive pursuit.

If you consider that even maintaining Sevco at their current rate of losses – somewhere in the region of £7.7 million (pre-tax) last year – would start to eat away at that money in a way you couldn’t sustain … well you can see why he might not feel good about it.

We already know that this is a club needing more than just a little TLC.

Stadium renovations alone are a £10 million plus bill in the waiting.

Assembling a scouting network, rebuilding the backroom team, spending on first team players, constructing the basic infrastructure of a modern football club which has been cut to the bone over the past two years … another £10 million at a minimum.

Add what it costs to run that rebuilt organisation to the present annual outgoings … and they only increase by 50% if you’re lucky.

How long will even a £100 million fortune last in the face of this?

Which brings me to my final point; the impossibility of King being able to do even a fraction of this anyway.

Dave King’s deal with the taxman contained one provision that is never actually reported, and would probably not be terribly well understood if it was.

He was told to transfer the assets he had left to South African banks.

There’s a good reason why.

King’s wealth and that of his family comes from his businesses in that country.

He has no real, substantial, business interests outside of there.

Part of his legal troubles arose because he had stashed money offshore, in an effort to hide his total earnings.

South Africa takes that stuff seriously.

They are one of the few countries on Earth which believes that money which is made there should stay there and who have, as a consequence, enacted what are known as “exchange controls”.

The purpose of exchange controls is simple enough; to disincentivise the movement of money out of the country.

They take that particularly seriously if the cash is to be “invested” somewhere else.

When the entrepreneur Mark Shuttleworth decided to move nearly $300 million out of South Africa he was told approval for this would only be granted if he paid a $30 million “levy” for the privilege.

Furthermore, Shuttleworth was a guy with an unimpeachable reputation.

Please note; the South African government did not have to grant Shuttleworth approval to transfer his money, which, rightly or wrongly, they see, in some ways, as their county’s money. This is totally at their discretion.

That they only did so when he agreed to pay a 10% charge against it is telling.

King’s assets were consolidated in South Africa under a court order, because he had already broken exchange control regulations.

Can you imagine the South African government’s response if he decided to liquidate his assets there so he could pour it down the Ibrox plughole?

If King still has money offshore, that cash is lost to Sevco because the second he starts to spend substantial amounts the South African government will be asking – rightly – why it wasn’t transferred back to their control, and what tax he paid on it.

Because of his 13 year legal fight with SARS, and the list of charges against him, as well as the settlement offer, the money he does hold in the country is largely stuck there.

Oh he can operate for a while behind the “Family Trust” argument, but that runs into the same problems eventually, as the King family itself is largely confined to South Africa and to operating there.

If those trusts are offshore and they contain wealth enough to start this job it’ll have to be a lot of wealth … because he can’t get more money into them without running afoul of the rules.

I suspect he’ll be wary of doing that.

13 years in the courts makes you leery of opening that can of worms again.

SARS does allow a small amount of money to be invested every single year without being subject to these regulations.

It’s probably this money which enabled King to buy his shareholding in the first place, after, of course, he and his people had driven the share price low enough that he could afford to do it.

None of this is to say that King can’t invest in Sevco.

It’s possible that the South African government would grant him leave to do so.

It’s not to say he doesn’t have the money to invest, because he clearly does have wealth enough to make a dent in their problems.

But King, the saviour, who is going to pour money in and plug every hole and rebuild the club into what David Murray once had at Rangers … well that is simply not going to happen at all.

When we look at King’s behaviour thus far, we see a man who’s not yet spent a dime of his own cash on the Ibrox operation.

Some have said it’s because he won’t.

Maybe it’s simpler than that.

Perhaps he can’t.

The Scottish press appears not to care about this issue, but others have already raised it, giving the media their cue should they choose to look.

Former chief executive Derek Llambias taunted the hack pack with the question “Where’s the money, Dave?” in his last days in the job and Mike Ashley has long suspected that King doesn’t have the funds.

He tested the waters recently, when he called King’s bluff with the recent demand for the £5 million in Sports Direct loans to be repaid.

The media never bothered to speculate on how Ashley knew this gamble wouldn’t end with Dave King writing him a cheque.

Instead they took King’s refusal as a sign he wasn’t backing down, but that point is a nonsense when you really look at the issue and what the benefits would be to the club of having this monkey off their back.

Llambias and Ashley are smart guys.

They know everything I’ve written here and probably a lot more besides.

We’ve seen our media talk up the wealth of David Murray, back when a lot of people already knew he was floating on an ocean of soft loans at ridiculously generous rates. BarcaBhoy has cited other examples of where the media has reported personal wealth based on overblown share prices and “assets” which turned out to be largely worthless.

To give you but one example; for years the media calculated Murray International Metals net worth based on steel reserves, which were sitting in warehouse, and which he couldn’t find buyers for.

We saw Craig Whyte labelled a billionaire by folk who could have sussed him with five minutes internet research without even using Lexus Nexus.

For years now they’ve been talking up the Wealth of King based on no information other than a demand for repayment of back taxes and fines, but without the most basic comprehension of what those numbers represented.

They sift through court judgements for the bits that sound the most newsworthy – “Oh Dave King had a plane, and the South African government seized it ..” – without actually considering the significance of the overall.

As per usual, it’s left to guys like BarcaBhoy, on his own time, to go where they won’t, and to find what they won’t look for.

I don’t expect that you’ll see any of this in the media, not until the wheels come off anyway.

I don’t expect that the Sevco fan sites will take this stuff well.

But if, for once, they would just temper their expectations it might do them good in the long run.

If recent leaked season ticket numbers are to be believed – less than 20,000 sold the last I heard – a lot of them aren’t convinced either.

The rest don’t want to hear it, any more than the press wants to say it.

Which leaves it up to us, I guess, to be the bearers of the bad news.

(I’m a full time writer and the support of my readers is what keeps me goingr. If you like what I do, and are able, and want to support the work the site does, you can make a donation at the link. If every reader was able to donate just £5 a year that would keep the site going strong well into the future. Many thanks in advance.)

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