Background for Nimmo Smith decision

Will Lord Nimmo Smith’s SPL Commission report this week?  I’ve no idea, but as the day draws near it is perhaps worthwhile reminding ourselves of the relevant matters already established by the First Tier Tribunal, which, reportedly, Rangers ‘won’.  We will have more excerpts as the week progresses.

The decision was anonymised, so names, such as Mr Black, Mr Violet and Mr Gold are not the actual names of the people involved.

Excerpts from The Decision:

“159
The suggestion made on behalf of Rangers that Mr Black’s involvement did not extend beyond concluding an outline agreement and a specific overall figure, was not borne out in evidence. Given that the burden of proof rested on the Appellants, there was a dearth of evidence available to support the Appellant’s contentions about the nature and stages of the process of agreeing “deals” on the engagement of footballers. Mr Thomson referred to specific individuals. All sub-trust monies had been withdrawn as “loans” except in the case of Mr Gold’s sub-trust.

The side-letters, while not disclosed to the SFA, were in reality part of the player’s contract with the Club.

The players expected to receive the monies paid into trust. Mr Violet believed that the purpose of the Trust was to suit Rangers. So far as he was concerned, his lawyer had reassured him that the arrangement was legal. However, according to Mr Thomson, given that the burden of proof rested on the Appellants, it had not been shown that the side-letter benefits were other than part of the contract of employment of the players.

When recently the tax advantage of trust payments had ceased for Rangers, remuneration due to Messrs Maidstone and Mr Guildford was made via payroll. Rangers had promised to ensure that even if the trust arrangements ceased, alternative arrangements would be made to give the players their agreed net pay. That crucially was the underlying reality.

160
Mr Thomson complained that it was difficult to ascertain whether the player’s contract of employment started with both the disclosed contract and side-letter being signed, or at an earlier stage and then reduced to formal terms, since the taxpayers had disclosed only limited documentation.

The over-arching contract was the contract of employment and the side-letter was part of it. No explanation had been advanced for its being a separate document. The inference was obvious: it was secret and not to be disclosed.

161
Side-letters, of course, had not been registered with the football authorities, the SFA and SPL. The spirit of their rules was that the whole contract terms should be registered.

Suspiciously, no evidence was led as to who decided that the benefits in terms of the side-letters should not be registered.

Non-registration of side-letters was incompatible with both authorities’ policing and disciplinary powers. For example any fines imposed on players would customarily reflect the disclosed wage.

Nondisclosure would thwart the authorities’ powers.

163
On any view, Mr Thomson argued, Rangers could have sought a ruling from the SFA or SPL about disclosure of side-letters but, clearly, they had chosen not to do so.

There was a conscious decision to conceal their existence, and that extended even to the Club’s auditors.”

This evidence clearly establishes the conduct by Rangers in relation to side-letters and player contract registration, the SFA and SPL rules, and Rangers detrimental action on the football authorities powers.

More than this, the matter of concealment is addressed, from both football authorities and the club’s auditors.

While “suspiciously, no evidence was led as to who decided that the benefits in terms of the side-letters should not be registered”, the SFA president, who was a Rangers director when EBTs were introduced, declared himself “somewhat vindicated” by this decision. You may feel otherwise.

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