John McFall wants FSA to probe Rangers takeover deal
Published: 15th Feb 2012 19:03:24
The former chairman of the Westminster treasury select committee has called for the financial regulator to probe Craig Whyte's takeover of Rangers.
John McFall said the Financial Services Authority (FSA) could help answer questions about an apparent shortfall of cash at the Ibrox club.
Rangers appointed Duff and Phelps to act as administrators on Tuesday.
The firm has denied having any conflict of interest arising from its links to Craig Whyte prior to his takeover.
Rangers was placed in administration on Tuesday after a legal stand-off at the Court of Session in Edinburgh.
Owner Craig Whyte lodged papers at the court on Monday indicating that the club was considering administration within 10 days.
When HM Revenue and Customs (HMRC) - one of the club's main creditors - filed to have its own administrator appointed on Tuesday, both parties agreed that Duff and Phelps would be appointed.
Joint administrators Paul Clark and David Whitehouse, from Duff and Phelps, later confirmed HMRC's action stemmed from the alleged non-payment of £9m in VAT and PAYE dating back to last year when Mr Whyte bought the club from Sir David Murray.
Angry fans have since demanded answers from Mr Whyte over what has happened to all the cash which has apparently passed through Rangers since then.
Mr Whyte claims to have injected £33m of his own money to pay off the club's bank debt and fulfil the other obligations of the takeover.
Going on previous seasons, Rangers income for the nine months Mr Whyte has been in charge should be about £26m.
It has also been reported that he borrowed about £24m from Ticketus against a share of season ticket sales for the next four years.
The club is also said to have received about £5m for the sale of top goalscorer Nikica Jelavić to Everton in the January transfer window.
The combined total of these figures is £55m.
Mr Whyte has publicly stated that the monthly cost of running Rangers is about £3.75m.
Based on this figure, the cost of running the club during Mr Whyte's tenure would have been about £34m.
In theory, that should leave a surplus of £21m.
If the £9m figure claimed by HMRC over alleged unpaid VAT and PAYE is added, then the surplus cash figure would stand at £30m.
Working with these figures, some fans have been asking why Rangers was placed in administration.
The role of the administrator is to be independent, to look after the interests of all the creditors, not to be seen to have any particular interest in one group of creditors”
John McFall, the former Labour MP who chaired the House of Commons treasury select committee, said the matter should be investigated by the Financial Services Authority.
He said: "When you spend money you don't have and you use HMRC and the taxpayer as your private bank then it has tragic consequences for Rangers as an institution, Scottish football, fans and for Scottish community.
"Rangers are on the stock exchange and there is a renewed case for the FSA looking at this issue. Parliament is just giving the FSA the opportunity to have what's called judgemental discretion. That means looking at the business models of institutions and Rangers is a good case.
"Did the directors do their duty? And, if they did their duty legally, were there any corners cut as a result of that?
"It's the taxpayer who's on the hook here and the taxpayer has got to be paid and football clubs have got to realise that they have got to comply with the regulations that are laid down by parliament and HMRC.
"There's lots of questions around here, there's no specific answers so the case for a renewed investigation by the FSA is something that supporters and those with an interest in Rangers should be looking at as well."
Meanwhile, it has emerged that David Grier, a partner at Rangers administrators Duff and Phelps, was centrally involved in Craig Whyte's takeover from previous owner Sir David Murray.
As emails obtained by BBC Scotland show, he even assured the previous board that Mr Whyte's bid had already secured a "time to pay" deal with HMRC.
This has led one academic to raise concerns over the appointment of Duff and Phelps as Rangers' administrators.
Steven Morrow, senior lecturer in sport finance at Stirling University, said: "If there is evidence of a prior relationship between those involved in an administrative capacity and the directors of Rangers Football Club, then I think that would raise concerns among some of the creditors.
"This is because the role of the administrator is to be independent, to look after the interests of all the creditors, not to be seen to have any particular interest in one group of creditors.
"Their job is to try to make sure the organisation is a going concern but protect the interests of all creditors and that's what the process is about."
Duff and Phelps has denied any conflict of interest in acting as administrators.
In a statement, the firm said: "The appointment of D&P was approved by the Court of Session in Edinburgh and the appointment was agreed to by HMRC.
"Indeed, HMRC withdrew their application to have an administrator of their choice appointed and are now engaging with D&P as the administration progresses.
"There is no conflict of interest whatsoever as it is standard practice for companies to appoint their own administrators, who usually have provided advice on restructuring in the build up to an insolvency."
At 23:55:54 in HeadlinesPope Francis has led Easter's Way of the Cross procession in Rome, with prayers for the poor and the abandoned.
At 23:55:01 in SportTottenham manager Tim Sherwood has admitted that he does not know his best team because so many of his players are "much of a muchness".
At 22:51:50 in HeadlinesThe US has threatened tougher economic sanctions if Russia fails to abide by a new international agreement to help de-escalate the crisis in Ukraine.
At 21:56:47 in Northern IrelandThere has been a serious two-vehicle road crash in County Tyrone.
At 21:19:22 in HeadlinesPresident Barack Obama has signed into law a measure that would bar entry to any UN ambassador whom the US says has engaged in "terrorist activity".
At 21:00:23 in SportEllie Simmonds, Stephanie Slater and Amy Marren were among those gaining IPC European Championships qualification times on the opening day of the British Para-Swimming meet in Glasgow.
At 20:55:13 in SportMidfielder Joe Clarke is well aware of the importance of Wrexham's cross-border derby with Chester to the club's supporters.
At 20:51:49 in SportGrandeur claimed the Coral Easter Classic in front of a record modern-day crowd at Lingfield as the first ever British race meetings on Good Friday took place.
At 20:31:57 in BusinessThe US state department has given federal agencies more time to review the Keystone XL oil pipeline before it determines whether to issue a permit.
At 20:01:09 in HeadlinesCaptain of South Korean ferry that sank earlier this week has been arrested, South Korean media say
Harvard CitationBBC News, 2012. John McFall wants FSA to probe Rangers takeover deal [Online] (Updated 15th Feb 2012)
Available at: http://www.ukwirednews.com/news/225589/John-McFall-wants-FSA-to-probe-Rangers-takeover-deal [Accessed 19th Apr 2014]
News In Other Categories
Tottenham manager Tim Sherwood has admitted that he does not know his best team because so many of his players are "much of a muchness".
How do you tell the world about your remote-controlled flying fish toys?
Pope Francis has led Easter's Way of the Cross procession in Rome, with prayers for the poor and the abandoned.
The US state department has given federal agencies more time to review the Keystone XL oil pipeline before it determines whether to issue a permit.
Martin Currie, the Edinburgh-based asset manager, has reported a second pre-tax loss in a report made available by Companies House.
With the doors to its brand new £1million training centre officially open, one of the UK's leading apprentice training providers, Bristol based S&B Automotive Academy, is showcasing its world-class facilities by launching a series of foreign student exchanges for the first time in its 41-year history. To get a flavour of what life is like as an apprentice in the UK, the Academy hosted 16 apprentice engineers and bus drivers from the G9 Automotive College in Hamburg, Germany, as part of a Europe-wide vocational training initiative called the ‘Leonardo Programme’ with support from the European Social Fund. In a reciprocal arrangement, S&B will be sending nine apprentices to Germany during February 2012 so that they can get an appreciation of life in the automotive industry on the Continent. A further three German exchange groups are being planned for next year. Designed to assist the development of vocational skills and training across Europe, including work placements for trainees, the Leonardo Programme has a budget of €1.75bn, which is helping to encourage UK organisations to work with their counterparts abroad. In what is expected to be another challenging year for employers in the UK automotive sector, S&B’s Chief Executive, Jon Winter, claims that the exchange initiative will bring many benefits to the Academy and its apprentices: “In a world of global automotive brands, it’s important for our learners to understand the international context of the industry they have chosen to make their career. This new exchange programme will enable apprentices and Academy staff alike to achieve a better understanding of the challenges and opportunities within the automotive arena in Europe. With the Academy’s influence also extending to the USA and Asia, there’s every possibility that this initiative could move further afield in the future.” Continued Winter: “The need for skilled technicians across the world is on the increase and we actively encourage our apprentices to look at broader horizons during their training. Many of them have already learned the phrase ‘Vorsprung durch Gelehrtheit’, quite simply, ‘Advancement through learning.” In the 2010/11 academic year, S&B doubled the number of successful Apprenticeships over the previous year with some 350 apprentices graduating from the Academy. At the same time, achievement levels reached an all-time high with an overall success rate of 85%. For those learners on the Advanced Apprenticeship three-year programme, success rates were even higher, at over 98%. PHOTO CAPTION: As part of their exchange visit, S&B Automotive Academy arranged for the German apprentices to visit Hampshire bus operator, Bluestar, at its Barton Park depot. The students are pictured with S&B’s Andy West (3rd right) and Steve Prewett, Bluestar’s Area Engineering Manager (2nd right). Ends http://www.sandbaa.com