21 February 2012
Craig Whyte, the beleagured former owner of Rangers, has today issued the statement below, published in full, admitting he repaid the Lloyds bank loan at the heart of his takeover with cash leveraged against future ticket sales.
The wide-ranging statement, published here verbatim, also claims that Whyte wants to gift most of his shares to Rangers fans if he emerges in control after administration.
The reason that is a big ‘If’ can be seen from some of the other Whyte stories of recent days. LINKS HERE
Other questions remain unanswered about his ties to numerous people with dubious backgrounds.
This statement also throws up new questions about the role of administrators Duff & Phelps and particularly partner David Grier, an advisor on the takeover. If, as Whyte now claims, offers to pay HMRC were rejected, and if the plan was always to pay Lloyds with leveraged cash, how did advisor Grier not know?
And if he did know, why are Duff & Phelps struggling to piece together what happened?
Craig Whyte statement: NB this is unedited and unamended
STATEMENT ISSUED ON BEHALF OF CRAIG WHYTE – TUESDAY, FREBRUARY [sic] 21, 2012
Craig Whyte today promised that if he emerges from administration still in control of Rangers FC that he will give immediate consideration to gifting the majority of his shares to a supporters’ foundation.
And he provided detailed answers to the blizzard of questions and allegations that have surrounded his decision to put the club into administration a week ago.
On the Ticketus arrangement he said that, it was ‘without any shadow of a doubt, the best deal for Rangers.’
The Ticketus funds, which amounted to £20 million plus VAT, was agreed as bridging finance while negotiations with HMRC were under way to try to reach a compromise on both the ‘wee’ and ‘big’ tax cases.
Mr Whyte said: ‘The arrangement with Ticketus – which was a three-season deal NOT four, as has been reported – was originally to provide additional working capital as had been the case previously under the old board. My corporate advisors came to me with the proposition that it was entirely possible, as well as highly beneficial, to negotiate a deal with Ticketus that would allow us to complete the takeover and maximise working capital for the club’s day-to-day business.
‘The Ticketus deal was by far the best way to protect the club given the circumstances in that they have no security over any assets. The only person at risk from the deal is me personally because I gave Ticketus personal and corporate guarantees underwriting their investment; the club and the fans are fully protected. In terms of exposure, I am personally on the line for £27.5 million in guarantees and cash.
‘By any stretch of the imagination that is a very substantial commitment to the football club of which I have been a supporter since I was a boy and dearly wish to see through this crisis so that Rangers emerge as a financially fitter and stronger institution. I am the biggest stake-holder in Rangers and I face huge financial losses personally if the restructuring fails or is not allowed to proceed.
‘Despite the frenzy of media speculation and misinformation everything I have done has been with the best interest of this football club at heart. Any suggestion that I am trying to make a fast buck or have indulged in illegal manoeuvring is clearly ludicrous.’
PROOF OF FUNDS:
As far back as November 2010, at the start of the takeover plans and long before there was any discussion about approaching Ticketus, Sir David Murray and Lloyds Banking Group were provided with – and were satisfied with – proof of funds amounting to £33 million. It was several months later, when negotiations were still on-going that the proposed Ticketus deal – ‘100 per cent the best deal for Rangers’– was mooted.
‘There is nothing irregular or untoward about it, much as certain sections of the Press would like everyone to believe,’ said Mr Whyte. ‘In business terms it makes perfect sense and is the best possible deal for the club.
‘I regret now not making the arrangements more transparent, but at the time I regarded it as I do with all my other business dealings, as a confidential transaction. In retrospect I should have been completely open about it, but I’m not sure Ticketus would have been very happy about their confidentiality being breached. In any event, the deal was, and still is, fully guaranteed by me so the accusation that I paid the bank debt without any personal inancial commitment is just plain wrong and quite ridiculous. This was a way of trying to maximise working capital for the club.
‘It also has to be remembered that this was not me working alone and in isolation. I hired top-rate corporate, financial, legal and tax specialists to guide me through this process and when you’re paying for that kind of advice, it would be daft not to follow it.’
£9 MILLION PAYE AND VAT ISSUE AND THE BIG TAX CASE:
Craig Whyte explains: ‘It is simply not true to say that Rangers or I have reneged on paying these liabilities since the takeover. The truth is that around £4.4 million of the £9 million demand is, in fact, the ‘wee tax case’, including penalties, and which is in dispute. We offered to pay £2.5 million of the PAYE and VAT up front with the remainder at £500,000 a month, but HMRC flatly rejected that.
‘On the big tax case – and, of course, no one yet knows whether that has been won or lost or how much the liability would be – we wanted HMRC to confirm that they would accept repayments of £2.5 million a year if we lost. But again they said, “No”’.
Given that HMRC had seen fit to reach agreements with huge corporations owing far more than Rangers – Vodafone, for example – it was difficult to understand why they were being so inflexible unless, of course, they were simply determined to make an example of Rangers.
‘In these circumstances it would have been far too risky to pump further funds into the club while the result of the EBT tax case remained unresolved.
‘People need to understand that the big tax case has had, and continues to have, a huge bearing on Rangers’ future and that I have done everything in my power to safeguard the club against the possible outcomes which could have included the possibility of Rangers being forced into liquidation. Anyone who pretends that this has somehow been my goal as either a fool or has a particularly sharp axe to grind.
‘Remember also, that HMRC had frozen some our bank accounts while we were in dispute. On top of that we had other funds frozen because of legal claims by certain former members of the board all of which contributed to why we fell into arrears on our monthly PAYE liabilities.
‘Negotiations with HMRC about trying to reach a compromise on the EBT case continued right up until the very last minute, but HMRC would have none of it – if they had, that would have released further funds and we could have avoided administration. I understand why the fans are angry and believe that I am to blame, but in the position we find ourselves in meant that administration was the only option.’
HISTORICAL FINANCIAL PROBLEMS:
‘The fact is that Rangers, had they not gone administration now for the reasons I have given, would have done so some time in the future whoever the owner was because they could not go on funding losses of up to £15 million a year. People seem to forget that the previous board under Alastair Johnston were talking seriously about administration two years ago. If things had turned out differently with HMRC, then I seriously believe I had the correct plan that would have avoided administration and put Rangers back on a sound financial footing.
‘Of course, there would have been some pain especially after the spendthrift days when the massive debts were run up in the first place – but that’s the hard facts of life.’
FANS’ DEAL AND FUTURE INVESTMENT:
‘If I can succeed in coming through this administration process I am very keen on the idea of gifting the majority of my shares to a supporters’ foundation. It makes a lot of sense, but fan ownership would work only after the current process if completed because the club has to get into a position where it is running at break-even in order for that prospect to be viable.
‘I am open to all serious offers of outside investment. Indeed, I am currently in active discussion with a number of potential bidders and investors. However, the reality is that every one of needs to have a final settlement of the big tax case one way or another.
‘I remain very confident that Rangers will emerge from this and move on in a much better position than it found itself in before the takeover. There is a lot of raw emotion at the moment, and that is understandable, but I’m sure people will look back on this and realise that I was absolutely right in what I did,
MY FUTURE INVOLVEMENT:
‘I will not continue as Rangers Chairman post-restructuring. Regardless of administration and irrespective of the tax case, the club had serious long-term structural problems financially and they needed to be addressed with some urgency. I knew that when I stepped up to the plate and, despite the accusations and abuse that I have suffered over weeks and months, I was determined to see things through. I will admit there have been times when I have wished that I had never entertained the idea of taking over Rangers.
‘But I am a Rangers fan, and, like other Rangers fans I don’t do walking way [sic].’