I’m out most of today and anticipate any number of events, so here’s a synopsis to help keep the various balls in play to mind. Apologies for the enormous number of ‘ifs’ but there are so many imponderables:
It is still possible that the Green consortium will propose a CVA. If they do, creditors will vote on it in mid-June and Rangers will be included in the SPL fixtures for next season, which will be issued before a creditors’ vote. Green will need to come up with some cash to keep the CVA alive long enough to get to the creditor’s vote, this is likely to be his most immediate problem.
If he finds the money to last until mid-June and the CVA is accepted (it won’t be) Rangers will emerge from administration and take their place in the SPL next season.
If Green cannot find a backer to pay player wages and other costs until a CVA verdict is reached, Rangers will be liquidated this week.
Pop!
Once the decision has been taken not to pursue a CVA, whoever has control of the stadium can apply to the SPL to acquire the league share previously held by Rangers for entry into the league next season.
The SPL have asked Rangers to produce information relating to the alleged double contract issue in advance of the SPL general meeting tomorrow, hereafter known as Prima Facie Day. League and member clubs will officially know if Rangers have rigged the system for over a decade, or not, or if they have refused to comply with SPL instructions.
Right now there is at least a 50% chance that Duff and Phelps will not attend the meeting on Wednesday and ask the SPL to reconvene next week to give them more time to conduct an asset sale. Before the meeting, be it tomorrow or next week, Green, the Blue Knights, or an as-yet unnamed bidder, will make the best offer for the stadium and apply to the SPL to enter a Newco.
Neil Doncaster’s proposal will be discussed, as will any other suggested way forward and a vote will be taken.
While the alleged cheating may influence how some members vote, the disciplinary and Newco vote matters will take different paths. Any disciplinary action will go through due process (you know how litigious they are).
Celtic will vote against Newco. My best source reckons we are still outnumbered and that more lobbying is needed, but in all honesty, no one really knows how the vote will go. We’ll come back to the consequences of this point.
If the SPL vote against Newco the story is likely to go quiet for a number of months. At some point in the future someone is likely to apply to the Scottish Football League for a Newco, based at Ibrox, to enter the league. Alternatively, an existing SFL club may buy or rent Ibrox, change name and move there.
If the SPL vote to allow a Newco access to the league next season, it will be subject to sanctions already imposed on Rangers, like the ban on player registrations (assuming the entire project is not killed by the club being thrown out of football as a result of the Court of Session case). It will also be subject to any sanctions imposed due to the alleged cheating for over a decade.
Rangers currently have around 40 players registered. If the company goes into liquidation all players can leave as free agents. A Newco would be able to retain any players who didn’t want to leave, however, any player able to attract a competitive offer is likely to leave. TUPE laws require the new employer (Newco) to maintain pay and conditions of any staff transferring from Rangers who choose to join Newco.
If a Judicial Panel find Rangers subverted Scottish football for over a decade, any Newco awarded Rangers SPL share would be liable for Rangers punishment. This may well be expulsion from the SFA. There is no set timescale for such hearings although the SFA have a new and faster process.
To summarise the (known) unknowns:
Charles Green doesn’t know if creditors will accept a CVA and will need to pay to find out. He doesn’t know how the SPL will vote or what punishment a Judicial Panel would impose if Rangers are found to have cheated.
The SPL still don’t know if they will have an application to consider, and if they do, who it will come from. They also don’t know how a Judicial Panel will punish Rangers or a Newco.
The SFA know nothing, apart, perhaps, from what school their staff went to.
Craig Whyte, Charles Green and his investors, the Blue Knights, Rangers management, players, staff and fans don’t know if there will be any football team playing at Ibrox again.
None of them know the most intriguing question of all, what is the next thing to arrive from left field (unknown, unknowns)? No one believes the story is at an end.
So what about Celtic?
A future within Scotland is no longer tenable, no matter what happens. Rangers are a busted flush. They are either dead, fatally wounded or completely trashed. The SPL is, to put it mildly, flawed. We have outgrown the game here socially, morally and economically. Scottish football holds nothing for us apart from straightforward access to the Champions League. The possible vote and on-going inquiries will change nothing in this respect.
Celtic will have a future but it must be beyond Scotland. It’s time to find another league and move.
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1st?
2nd?
Cleans weep of the podium?
Clean sweep even!
Wow Paul, what a mess!
Thanks for the summary, Paul. All pretty straightforward, isn’t it?
:)))))
Doc is Neil Lennon on 29 May, 2012 at 09:25 said:
I want an investigation into podium doping!!!
Any idea is the court of session will make any decision(s) today, or is this liable to drag on for another few weeks ?
Damn… You were right doc
What way will Hertz vote……..
Hearts director Sergejus Fedotovas believes learning lessons from the crisis at Rangers is more important than imposing sanctions.
Rangers, who are being investigated by the Scottish Premier League over possible dual contracts, have been in administration since February.
And the Ibrox club may seek to remain in the SPL as a new company.
“Justice is very important, but lessons learned are more valuable,” said Fedotovas.
“Rangers’ situation has shown certain problems and many clubs see punishing Rangers as the most important objective.
“The situation has highlighted issues that are much wider and Scottish football should not be narrow-minded and should not put all focus on the punishment, but address the roots of the problem.”
Several SPL clubs have highlighted the importance of integrity and reputation when considering how to deal with Rangers while others have stressed the financial rationale for keeping the Ibrox outfit in the top flight.
The league has twice delayed voting on new financial fair play rules for next season, including the imposition of a 10-point penalty for two seasons on clubs who relaunch as newcos.
The member clubs are due to meet again on Wednesday.
“Some problems are personal to individual clubs but there are a lot of systematic problems that should be addressed by acting together,” added Fedotovas
A detailed interview with the Hearts Director…………………not
Learning lessons Mr Fedotovas……………………balance your books
Root of the problem? clubs who spend other peoples money and avoid paying tax
Doc is Neil Lennon
I hope you don’t take this the wrong way, but you’re a greedy barsteward, aren’t you … ?
;-)
FF
When you see it written out in all it’s complexity Paul it’s mind boggling but one thing is clear for all that’s going on in Scottish football and no of us know how far this mess extends, Celtic stand in the midst of it, a well run club financially. morally and socially.
If and when we move on we ill be welcome in another league, Norwich last week and their fans reaction to us cemented that idea in my head.
Bring on the future…
JackGlasgow on 29 May, 2012 at 09:33 said:
Any idea is the court of session will make any decision(s) today, or is this liable to drag on for another few weeks ?
Lets hope it drags on burning away all those funds collected by walking……………
starry plough on 29 May, 2012 at 09:32 said:
I read the article after my glorious 1st, then went back to the old post to remind everyone there was a new article, still managed a 3rd, then got lonely and started talking to myself!
I would welcome any investigation that I can delay indefinitely;-)
Look out for one of the diddy teams in the SPL (take your pick) buying up loads of players ahead of the name changing and relocation to Ipox, in order to circumvent the signing embargo.
Doc
Do you esp / ebt or something similar. Spooky :-)
The answer is out there somewhere ?
Off out now
starry plough, a route out of Scotland would be wonderful, I look forward to the day it comes. Dermot Desmond spoke about it on an RTE program a month or so ago, he thought it was inevitable, may be some time away, but within 10years in his opinion. Lunchtime with legends? Might have been the prog. On YouTube.
Hi Ho, til later, cheery.
Paul67
What evidence is there that Celtic are making any attempt to get out of the SPL?
TT
kitalba on 29 May, 2012 at 09:13 said:
-> Portsmouth were certainly 1 of the other teams, and I am 90% certain Newcastle were another.
repost from last thread
starry plough on 29 May, 2012 at 08:34 said:
“Tony McKelvie @TonyMcKelvie
You’ll hear a lot of figures over the next 48 hours. Remember this one: 92 pence. For every £1 paid into EBT, Rangers saved 92p in Tax & NIC”
That is true….. if Rangers had an agreement with the individuals that they were to be paid on a net basis, (meaning that Rangers would pay the tax) that tax itself becomes income and is subject to PAYE at the same time as the pounds that went into the trusts. That gets you to 92%. If there was no net agreement, it’s only 53.8%.
My guess is that they did say to players “Don’t worry. None of this is taxable and in the unlikely event that HMRC says it is, we’ll take care of it.”…..thinking that it never would be a concern (’cause pornstar Paul told them it would be fine). That, in my view, lumbers them with the gross up and the 92% charge.
Given their potless predicament, it may well all be irrelevant.
Folly Folly on 29 May, 2012 at 09:35 said:
Taken as meant, yes I am.
Barcabhoy from RTC today
Apologies if you’ve already saw it, but I thought it would be good to let everyone see this
Barcabhoy says:
29/05/2012 at 6:33 am
18 0 Rate This
there has been a lot of speculation surrounding the news that more is to come out about Rangers and the seriousness of what is still to be revealed.
the first thing however is to dispel some of the wider rumours that have been doing the rounds.
this is not about match fixing, its not about bribing referees, its not about political interference , its not about banks behaving inappropriately or illegally .
I have absolutely no knowledge of any of these things.It is also highly unfair that individuals who have not been involved in any wrongdoing are speculated about. As i posted earlier the information I alluded to is not my story. I can therefore only provide a little bit of information at this time. When I am allowed to I will post more. Timing is not in my control.
The BBC documentary touched on EBT beneficiaries and the amounts they received. The nuclear information takes this further. I am able only to give you this initial bit of information just now, however the significance is enormous .
“Graeme Souness received much more than just the 30k Mark Daly mentioned. Rangers supporters, Scottish football administrators, and the legal authorities in Scotland deserve to know why he received this money a decade after leaving Rangers’ employment?”
Maybe Mr Souness could enlighten us, or maybe one his chums in the MSM could provide him with a platform to deny this.
Paul67
Well laid out summary as always.
What happens if CVA is accepted (and we know it won’t) to RFC(IA) credit rating? Is this why a number of English clubs still went down Newco route even after CVA approval? This would still impact their ability to get working capital – or maybe, Ticketus could give them some money for that!! HH
I’m not convinced by the whole jam tomorrow notion of us leaving the SPL for another league.
Yes it would be nice for us and yes it would mean The Great Desmondo would get a return on his investment but if we haven’t managed it thus far I can’t see why it is going to happen now.
And I don’t see any signs to suggest that UEFA will accept the huns difficulties as a justification for us leaving.
GourockEmeraldBhoy on 29 May, 2012 at 09:38 said:
No ESP/EBT here mate, just read Paul’s post from earlier saying a new article was going up around 9.30 so I kept an eye out for it.
A thought provoking article as usual Paul, but which raises more questions than answers.
Your final point seems to imply that it would be possible for Celtic to move to a new league.
Since I suspect that you may have some inkling of things which might be in the offing re. this, my questions would be where and how?
This will live long in my memory, when I write my memoirs this episode will feature highly, not the ragers fiasco of course, but my podium clean sweep.
Definitely of to work now.
To my detractors, jealousy is a negative emotion, leave that to the orcs!
;-)
I seem to recall reading one of Phil Mac’s article’s were he said – “Padlocks ‘n’ Chains ” will be the watchwords of our noisy neighbours as, it looked likely that, ipox would be closed for a period between 9 months and a year as, they are investigated by all and sundry ?
If I’m right and Phil did indeed say the above then, i’ll be guided by him.
Hail Hail
I’m afraid that last paragraph has echoes of the ole ‘generation of domination’ stuff and look what happened to that.
I stand by my views that next season there will be big Huns in the SPL, still at Ibrox, still playing against us and still as horrible as ever.
Oh and the SFA/SPL sanctions, if any, will amount to a slap on the wrist.
“The SFA know nothing, apart, perhaps, from what school their staff went to” — ouch! hehehe.
Doc is Neil Lennon on 29 May, 2012 at 09:50 said:
You can call it, The Gold, The Silver and The Bronze..
Bestseller..
Paul
It’s such a shame we didn’t buy Wimbledon when we had the chance, before Fergus left. We’d be in the EPL.
“Celtic will have a future but it must be beyond Scotland. It’s time to find another league and move.”
Newco or no newco if we have an escape route then it doesn’t really matter, let the whole rotten lot go down in flames.
I’ve been desperate for Celtic to find a way out, hopefully we can find an exciting and fair new league to compete within.
I’m at a loss as to why people say it is all too complicated. It couldn’t be clearer.
Chapter One.
Fraudster and Lib Dem donor Brown controlled broker linked to former Rangers owner Craig Whyte during his 2005/06 crime spree
A stockbroking firm linked to Rangers former owner Craig Whyte has links to convicted fraudster and Lib Dem party donor Michael Brown.
Brown, convicted of orchestrating a £36 million fraud, was a director in a number of companies linked to directors of Pritchard Stockbrokers and its then parent company, KSC Broking, during his 2005 and 2006 crime spree.
Early in 2005, Brown acquired a controlling stake in Pritchard Stockbrokers through his British Virgin Islands company, Devonshire Capital Ltd.
The deal was agreed through Pritchard’s then parent company, KSC Broking.
Brown’s Devonshire Capital still holds those 300,000 shares in KSC Broking, which in turn still holds a controlling share in Pritchard Stockbrokers.
Brown went on to commit a series of frauds totalling £36 million between February 9, 2005 and April 17, 2006.
At the centre of the fraud was a bogus bond trading company, 5th Avenue Partners, through which Brown famously donated £2.4 million to the Lib Dems’ 2005 election campaign.
That donation, his 2008 trial would later hear, was to dupe investors into thinking he had power and political influence.
Among his victims – lured with investment return promises of 50 per cent – was former Manchester United chairman Charles Edwards, who lost £7m in the scam.
Brown was arrested in the Dominican Republic in January this year after four years on the run.
He had skipped bail midway though his 2008 fraud trial at London’s Southwark Crown Court, where he was convicted in his absence and sentenced to seven years’ imprisonment.
Brown was returned to the UK on April 30 and began a seven-year jail term for fraud a day later.
Police are still trying to trace £18 million still missing from Brown’s various scams.
In 2001, Brown, a former events promoter and PR consultant, reinvented himself as a banker in a Companies House filing with a firm called City Merchants Media Ltd.
He went on to become a director of KSC Broking – a Financial Services Authority (FSA) regulated stockbroking firm – from May 2005 to March 2006.
In May 2005, The FSA approved an application from Brown to take control of KSC subsidiary Pritchard Stockbrokers.
Freedom of information documents released by the FSA between 2006 and 2009 reveal Brown financed his share purchase of Pritchard stock through his British Virgin Island’s-based company, Devonshire Capital.
The FSA records show Brown acquired “33 per cent or more but less than 50 per cent” in Pritchard from Keith Sinclair via Sinclair’s other FSA regulated finance firm, KSC Broking.
Prior to the deal with Brown, Sinclair’s KSC Broking held 100 per cent of the Pritchard stock.
Brown had joined the board of another finance firm, Premier Equity Ltd, in March 2005 along with Keith Sinclair, who was then a director in both Pritchard Stockbrokers and KSC Broking.
In January 2005, Brown set up a company called Lamberhurst Developments, which he and Sinclair then became directors of on February 11 and April 28, 2005 respectively.
Then on February 10, 2005, Brown set up his bond trading firm 5th Avenue Partners, a company he was sole director of and which was later described in his 2008 trial as a “wholly fraudulent” operation.
In March 2005, Brown set up another new company in Glasgow called Major & General Holdings (UK) Ltd and became a director in June 2005.
Devonshire Capital, Michael Brown’s British Virgin Island’s company, was listed as being a shareholder in that company.
Brown’s activities soon caught the attention of the authorities, and in June 2005, Pritchard Stockbrokers’ offices were raided by the City of London Police.
A note in the parent company KSC’s 2005 accounts tried to play down the significance of the investigation.
It states: “On 14 June 2005 the Serious Fraud Office commenced an investigation into the Pritchard Stockbrokers Limited (the company) which the board believes is in respect of a transaction in 2003.
“Subsequent to the initial visit in June 2005 and interviews in July 2005, the only contact the Serious Fraud Office have made with the company was a written request for a copy of the company’s procedures and further details relating to a third party.”
On September 16, 2005, Sinclair resigned from Lamberhurst Developments and Brown filed a voluntary striking off application to wind the company up the same day.
Lamberhurst was struck off in 2007 having never filed accounts.
On November 8, 2005, the FSA wrote to Pritchard Stockbrokers asking if KSC Broking had “any other interest” in the company.
The letter states: “From my notes, I understand that Michael Brown is a director of Premier Equity, but I believe that you told us that Keith Sinclair had once been but was no longer a director of that firm.
“Our internal records still show him in such a role, so I would be grateful for clarification, and if necessary, please arrange for submission of the relevant forms to withdraw him.
“It would be helpful if you could provide further details of when and how his involvement in the the firm began and developed, and the extent of his current role and influence.”
Brown and Sinclair both resigned their directorships with Premier Equity on December 20, 2005.
The FSA, having still not heard back from Pritchard by March 9, 2006, chased up its original request.
It also wanted to know if Brown had any involvement in or influence over the Pritchard business or in Premier Equity since their initial June 2005 request.
No further correspondence was released by the FSA in relation to that investigation, and City of London police have refused to comment on the outcome of the investigation, as have the FSA.
Brown resigned as a director of KSC Broking in June 2006, though a recent update from KSC filed with Companies House shows Devonshire Capital holds 300,000 shares in the company.
In October 2006, PR Week reported Pritchard Stockbrokers had hired PR firm MediaHouse to “argue its innocence to the press” over its alleged links to Michael Brown.
KSC Broking was Pritchard’s parent company until April 2008, when Craig Whyte bought a stake in Pritchard via a company called Cairnwell Investments.
Cairnwell is owned through shares held by his British Virgin Island’s-based company, Liberty Capital.
In October 2008, Sinclair’s KSC Broking sold a controlling stake in Pritchard to its remaining directors, David Gillespie and David Welsby.
Sinclair had resigned from the Pritchard board in September 2008 though his other broking firm, KSC, still held 550,000 of 1.75 million of Pritchard’s issued shares.
By 2010, the number of issued shares in Pritchard rose to 1.83 million – KSC Broking held 550,000 and Whyte’s Cairnwell Investments 173,250.
When Whyte first bought into Pritchard in 2008, the firm appeared to be in a dire financial state.
After extending its reporting period by three months, Pritchard filed its 2008 accounts more than a year late – August 2009 – only after Companies House had moved to strike the firm off.
The full year results, when finally published, revealed a loss of £296,789.
Pritchard’s recent accounts show £500,000 in lifeline loans were received between September 2008 and August 2009 from companies linked to Craig Whyte.
Whyte’s Liberty Capital first provided Pritchard with an unsecured £250,000 loan in 2008 as it struggled to stay afloat.
Pritchard then went on to report losses of £506,171 for the 2009 year, and another £250,000 unsecured loan was provided, this time by Merchant House Securities Ltd, listed in Pritchard’s accounts as a connected company of Whyte’s Cairnwell Investments.
Another company linked to Whyte’s offshore-based Liberty Capital – Liberty Corporate Ltd – was listed as Cairnwell’s company secretary when it launched in May 2009.
Whyte then joined the Cairnwell board in July 2009.
Craig Whyte’s father, Thomas Whyte, has been a director of Liberty Corporate since that company was launched in May, 2006.
Liberty Corporate recently filed notice with Companies House it had taken control of the floating charge held over the value of Rangers Football Club’s assets.
The debenture document secures the charge over Rangers FC Group, the ultimate parent company of the Ibrox club.
Craig Whyte is also an investor in and lender to Merchant House Group, and held a number of directorships in its group companies between 2009 and 2012.
He was a director of Merchant Turnaround from June 2009 to February 2012 as was Pritchard director David Gillespie, from November 2011 to March 2012.
Former Rangers director Philip Betts is also currently a director of Merchant Turnaround, first appointed in February 2010.
Whyte was also a director of Merchant Corporate Recovery from June 2008 to February 2012; Merchant Interactive from August 2010 to April 2011; Merchant Strategic Renewal from September 2010 to February 2012 and Merchant House Financial Services from August 2009 to January 2010.
The FSA register shows Merchant House Financial Services came under its regulation in December 2010.
Before December 2010 that company was called Merchant House Securities Limited, which had provided Pritchard with an £250,000 unsecured loan.
Whyte, having taken no director roles in any of Merchant House Group’s FSA-regulated subsidiaries, also avoided having to disclose his seven-year director ban to the regulator.
Craig Whyte and Pritchard director and majority shareholder, David Gillespie, are also linked through other companies.
Whyte and Gillespie were both directors in Merchant House Group subsidiary, Merchant Turnaround Plc – Whyte from January to February 2010 and Gillespie from November 2011 to March 2012.
Gillespie also holds directorships in KSC Broking and Merchant Capital Pub Realisation No 1, a new company he set up in May, 2011 in which Pritchard is listed as a shareholder.
In November 2010, Gillespie set up a property firm called Enterprise House Developments and lists Pritchard as a shareholder.
In most recent annual accounts to June 30, 2011, Pritchard Stockbrokers reported an annual profit of £18,000.
It would have posted a loss of £432,000 if not for a £450,000 red book revaluation gain on a property held by Enterprise House Developments, a company Pritchard held a 16.8 per cent stake.
Philip Betts, joined Rangers as a director just days after Whyte secured his takeover of the club, is also listed as a director of a company called Merchant House Finance Ltd.
That company changed its name to DS Financing & Leasing Ltd in March 2 2012 and then its address three days later, moving out of the same office block in which Merchant House Group is based.
Shares in Merchant House Group were temporarily suspended on April 3 after the firm admitted between October 2011 and December 2011 it had issued 652 million new shares – representing 14.1 per cent of its share capital – without making a formal announcement to the AIM market.
On April 20, Merchant House Group’s directors asked for the shares to be suspended again while they ran checks on the group’s solvency, which was reported to have been triggered by the collapse of Pritchard Stockbrokers.
Craig Whyte’s Liberty Capital is the largest shareholder in Merchant House Group, holding 11 per cent of the stock.
Whyte and Betts were also directors together in two other firms in the past five years, LM Logistics Group Ltd and Countryliner Group Ltd.
And they were both also directors in Wavetower Ltd, the company Whyte set up to buy Sir David Murray’s controlling stake in Rangers.
A statement issued to the Plus Market the day Wavetower concluded the Rangers deal said: “On 18 August 2010 an administrator was appointed to LM Logistics Group Ltd, Craig Whyte and Phil Betts were directors of the company within the year prior to appointment.
“The deficit to creditors was estimated at £3 million although the administration is continuing”.
On May 6, 2011, the Independent Board of The Rangers Football Club plc (IBC) – comprising Alastair Johnston, Martin Bain, John Greig, John McClelland and Donald McIntyre – issued a strongly worded statement outlining their serious doubts about Whyte’s takeover of Rangers.
Statements made included: “The decision on the sale and purchase of the majority shareholding in the club firmly and ultimately rests between Murray MHL Limited (“MHL”) and Lloyds Banking Group.
Adding: “Although the IBC has no power to block the transaction, following its enquiries, the IBC and Wavetower have differing views on the future revenue generation and cash requirements of the Club and the IBC is concerned about a lack of clarity on how future cash requirements would be met, particularly any liability arising from the outstanding HMRC case.”
The day the Rangers takeover was concluded, May 6, 2011, Gary Withey – then a solicitor with Collier Bristow who had acted on behalf of Whyte’s Wavetower in the buyout negotiations – joined the Rangers board as company secretary.
During the earlier takeover negotiations, Withey, acting on behalf of Wavetower, had provided the Rangers board of directors with a written assurance from “a UK financial institution” Whyte had the funds not only to pay off its £18 million debt to Bank of Scotland, but would also provide an additional £5 million in working capital.
The “UK financial institution” who provided the written assurance was Merchant House Group.
Whyte had in fact funded his buyout by mortgaging off a portion of Rangers’ future season ticket sales to investment firm Ticketus in what was reported to be a £24 million deal.
Ticketus has since indicated it now intends to lodge a legal claim against Craig Whyte totalling £27 million related to personal guarantees he gave for the money.
Withey resigned from Collyer Bristow on March 2 of this year citing “family reasons” and Rangers’ administrators Duff & Phelps are now pursuing a £25 million damages claim based on Withey and his firm’s role in the deal.
Noble Grossart, the merchant bank chaired by Sir Angus Grossart – himself a board member of Murray International Holdings – had “acted exclusively”as advisers to Rangers in the sale of the club to Wavetower.
David Grier, a partner with Duff & Phelps – formally Menzies Corporate Restructuring – was an advisor to Wavetower in the months leading up to the Rangers buyout.
Grier was also hired by Rangers, again in an advisory role, when the purchase was concluded and Whyte and Betts took control of the Rangers board.
Whyte and his team then spent the next nine months running Rangers into the ground, paying virtually no one in the process.
On February 13, 2012, Rangers applied to the Court of Session to appoint administrators after HM Revenue and Customs raised a £9 million action over the club’s non-payment of PAYE and VAT amassed since Whyte’s takeover.
That same day, the FSA banned Pritchard Stockbrokers from trading having been caught using “client money to meet their own expenses”.
The watchdog said it had “serious concerns” about how Pritchard was being run and immediately froze its assets.
The following day, February 14, Whyte applied to the Court of Session to appoint his own administrators, Duff & Phelps, which was granted after HMRC withdrew an application to appoint its own administrators.
Whyte resigned from the Pritchard board the same day.
Before the FSA had banned Pritchard from trading, Whyte sold 16 shares Rangers held in Arsenal Football Club to a consortium – Red and White – led by majority shareholder, Alisher Usmanov.
Whyte had blocked a move to pay the money into Rangers’ bank account, demanding the funds remained lodged with Pritchard.
Rangers administrators, Duff & Phelps have stated publicly their belief that money may never be recovered.
Pritchard Stockbrokers was placed into Special Administration – reserved for finance firms – on March 9, 2012 in a court process agreed with the FSA.
Mazars were appointed as special administrators, and have so far uncovered a £3.4 million cash shortfall in the Pritchard books.
Pritchard directors told the administrators Whyte’s Liberty Capital had pledged a £2 million funding facility to the firm.
However, Mazars have found no documentary proof to substantiate the funding was ever put in place.
“A request was made by the FSA for the company to call the facility to meet the company’s liquidity gap. However, no funds were forthcoming,” Mazars said in a statement.
In the weeks before Pritchard was banned from trading, its brokers were said to be advising clients to convert their shareholdings to cash – some for six figure sums – the bulk of which is now “missing”.
A number of Pritchard’s clients were inherited in 2010 from the failure of another stockbroking firm which fell foul of the FSA, Wills & Co.
Collyer Bristow’s Gary Withey, acted for Wills & Co in Pritchard’s 2010 buyout of that firm’s client business.
Slowing down the administrator’s investigation into Pritchard are claims from 5,400 clients of Merchant House Group.
The majority of these client claims – around 80 per cent – are for shareholdings worth less than £1, with the average just 56 pence.
After Pritchard was put into administration, its clients were moved over to a new firm, WH Ireland.
Many are said to be unhappy with the arrangement as some Pritchard brokers were also transferred over to WH Ireland.
One of Pritchard Stockbrokers creditors is Craig Whyte, said to be owed £173,000 for his shareholding in the firm.
Hers a question I’ve not seen asked before, so does anyone know what happens if the following happen?
OK so the Huns staff are back on to full pay from Friday and a CVA (if agreed ) will take at least 6 weeks to happen. So if say Greens mob offer £8.5m to the creditors, but with the Duffers taking at least £3m (conservative guess) and football creditors taking say £2.5m leaving £3m for the other creditors to split. OK thats all out there, but what happens if somebody comes in and offers to pay the players wages in full until they are out of admin (which for 6 weeks would be roughly £3m) to stop the players all walking would the money loaned not mean the non footballing creditors would be splitting a few grand between them?
Things to make you go mmmmmmmhhhhh!!!!
ernie lynch on 29 May, 2012 at 09:47 said:
_______________
I think there is a feeling, a strong feeling of
alleged Institutional Corruption in this country
against every club and, in favour of one club ?
For me…the above would see Scottish football
closed down – under investigation ?
Surely it is at that point that, Celtic FC by far
the innocent victim in all of this would receive
a call to get out of here ?
Hail Hail
kitalba-You can add Kizshnasvili to the list of Souness transfers,after he left Poundland,again for an inflated transfer fee.