worrying times ahead

[stephenbelfast 3]

The mists are lifting from the deal that saw Craig Whyte take over a controlling stake in Rangers from Sir David Murray a month ago.

The football club's new owner today published the agreement he struck to take on the liability for the outstanding tax claim being made by HM Revenue and Customs, and to invest quite a few million in the club.

That liability hangs over Ibrox, concerning a player-payment scheme that HMRC argues was a way of getting round a lot of tax.

The possible bill is measured, rather vaguely, in the tens of millions of pounds.

Craig Whyte, as with Sir David Murray, says he's got sound professional advice that HMRC can be defeated in the tribunal case, expected later this year.

But the agreement dwells on what happens if that advice is wrong.

What's now clear is that the £18m debt transferred from Lloyds Banking Group to Craig Whyte's company, now called Rangers FC Group Ltd, will remain a debt at least until the HMRC case is resolved.

If the tax bill, with penalty, is so great that it pushes the club into insolvency within 90 days of the final ruling, the debt will remain debt, and Craig Whyte will remain a creditor.

Though HMRC may think differently, it's possible he could pick up the assets, from which the club could then be re-built.

Waiving not drowning

But if HMRC loses the case, Craig Whyte says he will either waive the debt or transform it into equity.

If it were to be a swap of debt for equity, that would so dilute the company's current shareholding that the 15% of shares he doesn't control could be rendered worthless, meaning Whyte would have full control.

But then, today's disclosure to other shareholders says there's another agreement, this time between Rangers FC Group and the club itself: that victory over HMRC at the tribunal would be followed by a waiving of the debt and there would be no swap of debt for equity.

One other aspect of the agreement on debt concerns the possible use of the club's assets as security for other borrowing.

This is a heavy hint that the former board members who refused to endorse Craig Whyte's takeover were concerned about this, having seen the practice undermine other debt-bloated football clubs.

But the deal says that Rangers football club will not lend to the company that controls it, Rangers FC Group, or provide security for the Group's borrowing - unless, that is, it's for the club's benefit.

Player Squad

The other area where former chairman Alistair Johnston and other directors had their doubts about Craig Whyte was in his commitment to invest in the club.

The new document states there will be £5m for investment in the playing squad.

It then says it intends to invest - "or procure an investment of" - £20m by 2016 for spending on the player squad.

It's not clear if this includes the starting £5m commitment.

But it does extend to providing cash cover for up to £5m in each of the next four years, so it doesn't mean waiting for five years until the money is available.

Then there's a further £5m working capital facility for the club, and £1.7m for upgrades to Ibrox's kitchens and PA system, among other stadium requirements.

If Craig Whyte's company breaks the terms of the deal, his debt would be "automatically extinguished".

But while the HMRC dispute hangs over Ibrox, that extra spending on squad and stadium simply adds to the debt held by Rangers FC Group, as would that potential pay-out to the taxman.

'Lack of Clarity'

Alistair Johnston and the four others who formed the board committee scrutinising the Murray-Whyte deal said last month they had differing views on the future revenue generation and cash requirements of the club.

And the statement they issued at the time the deal was finally signed off went on to say Whyte's offer had a "lack of clarity" on the way future cash requirements would be met, particularly on the HMRC case.

Those directors insisted that a document should be issued by Craig Whyte on the full terms of the transaction, with firm commitments to agreed future investment in the club.

That appears to be the document we've got today. It comes with a covering letter in which Craig Whyte says he intends to keep the club based in Ibrox, without changes to use of its assets or for its employees.

The paperwork offers brief details on the three directors of Rangers FC Group - Craig Whyte, Andrew Ellis, the property dealer who previously failed to seal a deal with Sir David Murray, and Phil Betts, an asset finance specialist who, like Craig Whyte, has experience in refinancing and restructuring companies.

That detail may fall short of the Johnston committee's requirement for "comprehensive details on the acquirer".

What has no response from Craig Whyte and his Rangers FC Group is Johnston's insistence that he disclose the source of his funding.

As he was sacked from the board last month, Alistair Johnston continued to raise vague doubts about that, but without saying explicitly what his concerns were.

Today's statement only answers the challenge by saying the Group is wholly owned by Liberty Capital Ltd, a company based in the Virgin Islands which is wholly owned by one Craig Whyte.

Quite a lot has now been put down in black and white. This appears to be a binding, contractual commitment to the club and to other shareholders.

Making it work now depends (and please forgive me if this is stating the obvious) on the money being made available.

http://www.bbc.co.uk/news/uk-scotland-scotland-business-13675873

[bombaybadboy08 15,660]

Worrying times?

Na not for me

[stephenbelfast 3]

Worrying times?

Na not for me

Wish i had you optimisim mate , but i just cant see this being a smooth sailing for some reason.

[DietofWorms 2,063]

Erm...there was a big thread on this when it was news a week ago.

[Smile 26,600]

Do these cunts never stop its getting boring now.

[beattie7 2]

Yawn.

[Govan Front Antz 15]

This was all detailed in the letter to shareholders last week. Typical BBC

[Orangeclement 570]

Gotta get the fenians out buying tickets you know

[bilko89 507]

Craig Whyte, as with Sir David Murray, says he's got sound professional advice that HMRC can be defeated in the tribunal case, expected later this year.

But the agreement dwells on what happens if that advice is wrong.

BBC scaremongering again! The above is at the start of the story and the bit in bold is where i think the scaremongering is. All along no one has been worried about it, no other club has failed to defeat HMRC on this subject so why would we? A few scum blogs and self trained accountants later and people are worrying. Honestly mate dont listen to the drivel, the scum are the ones who are worrying and articles like this, I feel, back up my point.

[bombaybadboy08 15,660]

Wish i had you optimisim mate , but i just cant see this being a smooth sailing for some reason.

Entitled to your opinion mate but had the takeover not went through we could be sitting here wondering who McGregor and Davis will be signing for rather than talking about deals to keep them.

Time will tell but I have a good feeling about Whyte's reign.

AJ's words may have concerned me more if he hadn't been part of a rival bid just before Whyte's went through.

[stephenbelfast 3]

BBC scaremongering again! The above is at the start of the story and the bit in bold is where i think the scaremongering is. All along no one has been worried about it, no other club has failed to defeat HMRC on this subject so why would we? A few scum blogs and self trained accountants later and people are worrying. Honestly mate dont listen to the drivel, the scum are the ones who are worrying and articles like this, I feel, back up my point.

I aint to clued in with the financial accounts so when reading things it tends to be worrying but thanks for the reassurance buddy ,

[bilko89 507]

Entitled to your opinion mate but had the takeover not went through we could be sitting here wondering who McGregor and Davis will be signing for rather than talking about deals to keep them.

Time will tell but I have a good feeling about Whyte's reign.

AJ's words may have concerned me more if he hadn't been part of a rival bid just before Whyte's went through.

This.

[bilko89 507]

I aint to clued in with the financial accounts so when reading things it tends to be worrying but thanks for the reassurance buddy ,

No problem mate wasn't having a go at you BTW just pissed off at articles like this trying to worry us, they are the ones that are worrying and we welcome the chase

[caseyjones 3,009]

BBC scaremongering again! The above is at the start of the story and the bit in bold is where i think the scaremongering is. All along no one has been worried about it, no other club has failed to defeat HMRC on this subject so why would we? A few scum blogs and self trained accountants later and people are worrying. Honestly mate dont listen to the drivel, the scum are the ones who are worrying and articles like this, I feel, back up my point.

I was under the impression that this was a test case. What other clubs have been found to be innocent of these charges?

[bilko89 507]

I was under the impression that this was a test case. What other clubs have been found to be innocent of these charges?

Not sure off the top of my head, Arsenal were one. Read it on here somewhere.

[stephenbelfast 3]

No problem mate wasn't having a go at you BTW just pissed off at articles like this trying to worry us, they are the ones that are worrying and we welcome the chase

Oh i know there are many people out there with a shade of green about them just trying to ruffel feathers and cause there normal havoc but still worrying never the less. but cheers for the heads up mate

[Dunny_01 2,007]

Gony support your football team never mind worrying about Tax Cases, Its only Celtic nutjobs that are interested in our Tax Affairs, Comment if something mega comes out against us !! Craig Whyte has Phil Betts and im sure the leading tax guy in the world knows what hes doin !

[caseyjones 3,009]

Not sure off the top of my head, Arsenal were one. Read it on here somewhere.

I'm pretty sure that Arsenal's case was to do with image rights as opposed to this. Maybe you should heed your own advice about not believing the self-trained accountants? That means don't believe me either.

[bombaybadboy08 15,660]

This is an article regarding the Arsenal case.

http://www.timesonline.co.uk/tol/news/uk/article576436.ece

[bilko89 507]

I'm pretty sure that Arsenal's case was to do with image rights as opposed to this. Maybe you should heed your own advice about not believing the self-trained accountants? That means don't believe me either.

I dont trust anyone . Sure it was the same thing but also included image rights.

[TBagalag 721]

This so called news from the BBC makes it look like Mr Whyte has taken advice on the tax case from some bloke down the pub, I'm sure he has people in the know who have advised him on this matter, You don't become a multi-millionaire by listening to bad advice, I'm quietly confident we won't have to pay a penny to HMRC.

[californiadreamin52 339]

Sorry to be so dismissive but there is nothing new here just the BBC raking over the same old shit and Douglas Fraser has just got up to date. DF as a Business and economy editor really is a joke

[bilko89 507]

Gony support your football team never mind worrying about Tax Cases, Its only Celtic nutjobs that are interested in our Tax Affairs, Comment if something mega comes out against us !! Craig Whyte has Phil Betts and im sure the leading tax guy in the world knows what hes doin !

I do, articles like this just annoy me though. I am confident that Whyte wouldn't say we will win if we wont.

[markybear 136]

What does the facts of that article mean in laymens terms?

Seems to be all ifs, but and maybes. I dont fully understand what's happening with our debt, is it now linked to our tax case? Why didn't the Ibc tell the fans this stuff (in a language we can all understand) ? They vaguely told us to be careful about something but wouldn't tell us what!

Confused.com/loyal

[jdocherty72 215]

Beadrattlers.