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FootballNewsRangers administrator’s search for missing cash key to minimising job losses

Rangers administrator’s search for missing cash key to minimising job losses


By Nick Harris

SJA Internet Sports Writer of the Year

26 February 2012 

RANGERS’ administrators are in a race against time to trace multiple secret six-figure payments made by the Craig Whyte regime to associates and related parties during his time at Ibrox, Sportingintelligence can reveal, and the success or otherwise of that task will have a direct impact on first-team job losses.

If the missing money, which might run into millions, can be traced amid what one source says ‘is a still confused picture’, there is a chance that some if not all of it can be recovered.  The more money the administrators claw back, the fewer jobs will need to be axed.

The payments were made to, among other places, a bank account linked to non-league Banstead Athletic, which has close ties to a business contact of Whyte (former bankrupt Aidan Earley), and to a stockbroking company controlled by Whyte that has since had its assets frozen on the orders of the Financial Services Authority.

‘There are other “transactions”, payments which most people would consider large sums of money, that the administrators are still trying to get to the bottom of,’ a source said.

Director of Football Gordon Smith and Chief Operating Officer Ali Russell are the only job casualties at Ibrox so far. But Paul Clark of administrators Duff & Phelps says: ‘We’re still looking at other cuts and I expect to make an announcement about this at some stage next week. But those cuts will undoubtedly include playing staff.’

Clark declined to comment on the numbers of players likely to go, nor on any confidential aspects of Duff & Phelps’ work at Rangers, but Ally McCoist will be consulted about which players to keep and which to let go, and ‘creative solutions’ will be explored to cut costs. The SFA and Scottish PFA as well as the SPL are being kept informed of all developments.

‘It’s possible that deferment of some wages might reduce the number of people who need to go,’ one source said. ‘Salary cuts could be another way to save jobs, if certain players are open to that. Jobs are certain to go but the number could depend on a combination of factors, including whether the administrators can recover some of the money that’s leaked from the club to certain places.’

Well-placed sources have already confirmed that a £250,000 payment was made from a Rangers-related bank account at Collyer Bristow to a bank account of ‘Regenesis-Banstead Athletic FC’. Two long-time associates of Whyte, brothers Aidan and Wulstan Earley, have links to Banstead Athletic and are involved with several companies operating under the Regenesis name.

Banstead’s owner and chairman Terry Molloy says he has no knowledge of the £250,000. (See the Surrey Mirror story here). Aidan Earley has not responded to questions on the matter.

Duff & Phelps are also investigating the circumstances in which Whyte’s Rangers regime sold 16 shares in Arsenal for £230,000. The proceeds did not go to a Rangers bank account. Rather the cash went to a Whyte company, Pritchard Stockbrokers in Bournemouth. Pritchard’s assets have since been frozen.

‘Aside from the Banstead money and the Arsenal money, it’s not clear yet how many other payments were made in total, or to who, or why, but there were multiple transactions of money going out that the administrator is looking at,’ a source said. ‘Locating that money and assessing whether it’s possible to recover it is a priority.’

Separately, but crucial to Rangers’ future, Whyte will almost certainly not be considered as a major creditor of Rangers as the administration process unfolds, despite his insistence this week that he is ‘personally on the line for £27.5m in guarantees and cash’.

If Whyte, 41, is not deemed to be a creditor, it will make it simpler for any potential new owner to agree a deal to take control at Ibrox, because they would not need Whyte’s agreement over monies he claims to be owed.

While there is sure to be a desperate legal battle by Whyte as he attempts to show he technically put money into the club, administrators Duff & Phelps have yet to find any evidence that Whyte used any of his own money at any stage of the takeover last May (except £1), nor used his own money during the running of the club in the nine months since.

The hugely complex issue of whether Whyte is a creditor or not revolves not around his cash input – or lack of it – but rather on the timing and construction of the deal in which a London-based firm, Ticketus, paid £24.4m for a portion of Rangers season tickets for the next three years.

Whyte subsequently used £18m of that money to repay money owed to Lloyds bank by Rangers, which was a condition of his takeover of the club.

Whyte did the deal with Ticketus before he even took control at Ibrox, and therefore in effect ‘sold’ a chunk of Rangers tickets to Ticketus which he did not actually own at the time of the ticket ‘sale’.

‘It’s legally complicated but the argument over whether Whyte is a creditor or not will centre on that deal,’ said a source familiar with the situation. ‘What needs to be established is who owned the tickets that Whyte effectively sold to Ticketus at the time of the deal. It seems clear Rangers as a football club owned them.

‘Whyte did not own Rangers at that time. Logically one has to ask if he can be owed money when he’s never invested money in the club, and when he came into the possession of money through the sale, in effect, of Rangers property.’

In a statement in the past week, Whyte said: ‘The arrangement with Ticketus was originally to provide additional working capital as had been the case previously under the old board. My corporate advisors [then] 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.’

Whyte has not actually explained how it was ‘highly beneficial’ to Rangers, if at all, nor why it wouldn’t have been better for Rangers if he had invested the £33m of funds in the club that he says he proved to Lloyds and Murray that he had for the takeover.

Once source with knowledge of Whyte’s business affairs has told Sportingintelligence in the past 24 hours that even Whyte’s statement of last week contained misleading information, and that in fact Whyte never actually proved to Murray and Lloyds that the £33m existed; rather the source says he demonstrated to them that it apparently existed, but he stopped short of actually showing the evidence of a bank account with that sum of money in it.

Equally as confusing is Whyte’s contention that he is ‘personally on the line for £27.5m in guarantees and cash’ arising from the Ticketus deal.

Ticketus now technically own a portion of Rangers tickets for three years and it is assumed they will sell them as planned to recoup the money they gave Whyte, and make a healthy profit on top.

So Ticketus won’t be out of pocket.

Whyte is not out of pocket because he never owned the tickets in the first place and hasn’t spend any of his own money.

Arguably it is Rangers as a football club who are out of pocket, because a portion of their future income has gone to Lloyds, thanks to Whyte. So it is hard to see how Whyte himself is a creditor of Rangers.


Nick Harris is also the chief sports news correspondent at the Mail on Sunday and material from this story was used across several pieces in today’s Scottish Mail on Sunday. Not all the Scottish MoS’s content is online but an old-fashioned thing known as a ‘newspaper’ containing all those stories and much more can be purchased in a shop.


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