McIntyre evidence, Res 12, 5-way agreement

For a football club to be licenced to play in Uefa competition it has to be up to date with social taxes.  The SFA oblige clubs to make them aware of any overdue taxes, but if this information is withheld, or falsified, the Association have no powers to act.

In evidence at the trial of Craig Whyte at the High Court in Glasgow on 25 April 2017, former Rangers director, Donald McIntyre, was cross-examined by another former Rangers director, Donald Findlay.

McIntyre was shown a document dated 2010 from HMRC to Rangers saying tax for PAYE and National Insurance was due on Rangers Discount Options Scheme (DOS), involving players Tore Andre Flo, Craig Moor and Ronald de-Boer was “payable in full”.

His evidence under oath was clear, Rangers accepted liability for unpaid PAYE and National Insurance claims in connection with the Wee Tax Case (DOS) in 2010, telling the court, they had “no choice but to accept liability” at that stage.

Despite this, the club submitted their licence application without informing the SFA of their overdue social taxes.  This enabled them to take Scotland’s Champions League qualification spot and for the chance to earn £20m.  If they were ineligible, Celtic would have taken the qualification place.  This is the issue raised as Resolution 12 at the Celtic AGM in 2013 by campaigners who sought to shed light on the incongruous eligibility of Rangers for European competition in 2011.  The SFA stonwalled the campaigners until McIntyre’s evidence was heard in open court.

Rangers DOS scheme for three players (Flo, Moore and Ronald De-Boer) was not subject to the SPL’s Lord Nimmo Smith Commission inquiry and has not, thus far, been investigated.

A condition of their SFA membership application, then Sevco (now Rangers) agreed to be liable for some of Oldco Rangers football liabilities and penalties.

Yesterday, the SFA issued a Notice of Complaint against Newco, which the club states relates to “the monitoring period subsequent to the grant of the UEFA licence.”  Adding, “This new Notice of Complaint neglects to properly capture the provisions of prior agreements made between the Club and the SFA.”

The “prior agreements made between the Club and the SFA” likely refer to the Five Way Agreement, between Rangers, Sevco, the SFA, the SPL and the SFL.  This agreement attempted to isolate the new entity from certain activities of Oldco Rangers last majority owner, Craig Whyte – known as the “CW Exempt Acts”.

The Five Way Agreement, however, does not protect Newco from what is referred to as “CW Enduring Acts”.  Specifically, “The SFA, Sevco and RFC hereby agree that on Completion Sevco shall, other than with respect to the CW Exempt Acts, become liable and responsible for the purpose of imposition of sanctions by the SFA for any and all acts and/or omissions of RFC and/or Rangers FC.”  The Five Way Agreement was not a blank cheque.

A CW Enduring Act, among other things, includes “corruption, fraud….. or any matter similar in its reprehensible nature…… which acts or omissions are of at least equal gravity to those found to have been committed by or engaged in by RFC”.

Newco’s initial defence against the Notice is likely to be that this crack at a £20m Champions League slot is not of sufficient gravity to be determined as a CW Enduring Act.  By bringing the charge, the SFA compliance officer clearly believes differently.

A few notes:

We only have Newco’s statement yesterday to indicate what the Notice applies to – they suggest the monitoring period, and then, only after 6 May 2011, the period in which Craig Whyte had majority ownership (although Dave King was still a director).  The statement was not entirely coherent (a different Notice of Complaint was issued 8 months ago but has been dismissed?).  It is also possible the statement was written in haste, and confused a written agreement with the SPL, not the SFA.  I would not put too much emphasis on this statement.

There may well be a Sandy Bryson, waiting in the wings to offer an innovative interpretation of the rules that absolves Rangers from all sins.  On the positive side, there is no Campbell Ogilvie to protect in this case, and the SFA have been happy for Craig Whyte-related issues to stick.

It is clear that the only issues Newco can be charged with during the period from 6 May 2011 until liquidation, are CW Enduring Acts – and they are “reprehensible [in]nature”.  If the charge stands there cannot be a token punishment.  I expect a multi-year European ban.

It is hard not to be cynical after Bryson, but this issue has persisted for so many years and has not gone away.

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