The Dunfermline MP labelled the Employee Benefits Trust scheme perpetrated by previous owner Sir David Murray as a “tax-avoidance scam”. Before aiming a broadside at present owner Craig Whyte claiming his borrowing of money from Ticketus on the back of fans money as a “most disgraceful act”.
The Dunfermline FC season ticket holder launched a scathing attack on administrators Duff & Phelps and Rangers football club for what he claimed as “theft” after both the club and administrators “refused point-blank to hand” over monies owed to Dunfermline Athletic in ticket revenue.
Docherty began by saying: “The origins of Rangers’ problems date back over two decades. In 1988, David Murray bought a majority shareholding in the club for approximately £6 million. Mr Murray invested heavily in building a team that could not only dominate the Scottish league, but compete with the best of Europe. Something that is often forgotten is that when Rangers, under Murray and Graeme Souness, were building their successful side, which would go on to win nine league titles in a row, English clubs were banned from competing in Europe, so Rangers were able to attract players from England who, to play in Europe, either had to move to Europe or travel north of the border to play for the old firm.
“The list of players at Rangers during the late ’80s and early ’90s was a “Who’s Who” of Bobby Robson’s England team. The names will be familiar to every English fan: Chris Woods, Terry Butcher, Trevor Sinclair, Gary Stevens, Trevor Steven and Ray Wilkins. They were great players in a great team. Rangers were able to use their dominance and ongoing success to attract some of Europe’s best players, such as Brian Laudrup and Paul Gascoigne.
“Unfortunately for the club, their ambitions were never matched by their income, and in 2004 those debts peaked at a staggering £72 million. However, in the next few years, Rangers reduced their debt to some £30 million by the end of the decade, according to their annual accounts.”
The Labour MP added on the background information to those in the chamber: “In 2010, Mr Craig Whyte confirmed to the stock exchange that he was in talks with Rangers’ owners about a takeover. In 2011, Mr Whyte formally bought the club for a notional £1, having agreed to take on the club’s debts. He promised Rangers fans that he would be able to service those debts.”
After the extensive coverage which continues to this day of the dealings behind the scenes conducted by Motherwell-born Craig Whyte, Docherty launched a broadside at the Rangers owner: “What is appalling about the Rangers situation, and has come to light in recent weeks, is that Mr Whyte did not have the money to service the debt.
“It has now transpired that in what I would regard as a most disgraceful act, Mr Whyte and cohorts borrowed money from Ticketus on the future sale of season tickets. In effect, Rangers fans paid for Mr Whyte’s ill-fated takeover; they are the losers, and I am sure that disgraceful situation will be recognised across the House.”
DUP minister Gregory Campbell asked the Labour MP if he agreed: “that if football clubs could allow fans a greater degree of controlling influence, à la Barcelona model….it might move us away from the insidious controlling influences of multi-billionaires who appear to use football clubs as playthings?”
Docherty replied: “The honourable gentleman is absolutely right. There are some good examples of that model in Scotland. I referred earlier to Brechin City which, as honourable members may know, had on its board Mr David Will, the FIFA vice-president for the British Isles, and a local lawyer, steeped in Brechin City.
“There are successful models of clubs, both large and small, where the shareholders are the fans. I hope that the Treasury will look at ways of trying to ensure that a fit and proper person test means not only that liars such as Mr Whyte are not put in charge of clubs, but that we can all have comfort in club finances for the future.”
A pretty damning indictment from the MP to say the least.
He added: “Thanks to the Scottish press, which has been assiduous in trying to get to the truth of this sorry affair, it has been particularly disturbing to discover in recent weeks that HMRC has been engaged in a long-standing battle with Rangers over what the Treasury believes, and I believe, is a tax-avoidance scam instigated by David Murray. If Rangers lose this ongoing court case, it has been estimated that the club will owe HMRC somewhere in the region of £45 million in unpaid taxes from over the past decade.”
More background information was added by Docherty to the chamber, in regards to the PLUS stock exchange suspending the shares of the club for failing to submit audited accounts, two games played by the Ibrox side and Black Monday when Rangers announced their intention to enter administration at the Court of Session and the eventual going into administration and points deduction.
The Labour MP continued: “Rangers entering administration has not simply changed the dynamic of the title race but has had a devastating impact on three groups of people: first, the staff—both playing and non-playing—of Rangers FC; secondly, the companies that are owed money by Rangers as creditors; and thirdly, the other 11 members of the Scottish premier league, which is the group that I wish to raise with the Minister today.
“No one should have anything other than sympathy for those who face losing their jobs at Ibrox, in particular those who work behind the scenes and are not millionaires, and who will not easily find employment in the current economic climate.”
The Pars supported added: “Two clubs in the SPL have claimed that they are owed money by Rangers for ticket sales, and I will explain their situation for the benefit of the House. Under the rules of the Scottish Football Association and the SPL, the total gate receipt for a league game belongs to the home club. It is standard operating practice for the away club to sell tickets for their end of the ground, but under the rules of the league, that money must be paid to the home team within seven days of the fixture taking place, minus any pre-agreed handling fee. The money is not the property of the away team, which is merely the handling agent.
“For games in the Scottish cup, however, ticket sales for the whole ground are split equally between the two clubs, minus any operating costs, and the home team get to keep any proceeds from hospitality, refreshments, or programme sales. Under SFA rules, the two teams that have sold tickets do not have any right to count those ticket sales on their balance sheets, as they are merely holding agents and the money is to be put into the pool of gate receipts for the cup tie as a whole. In other words, the two clubs are merely acting as agents; it is not their money.”
The passionate parliamentarian then rounded on the club itself and specifically the administrators Duff and Phelps: “When Rangers entered administration, the club and its administrators, Duff and Phelps, refused point-blank to hand either amount of money to Dundee United or Dunfermline, arguing that it should go into the pot of credited money. Let me be clear and send a message to Rangers’ administrators: that money does not belong—and has never belonged—to Rangers. Holding on to it is not only morally wrong, it is nothing short of theft.
“What makes matters worse is that members of the Rangers board of directors were in the directors lounge at East End Park on the Saturday in question. They looked their counterparts in the eye, and told them that on Monday the money would be transferred to Dunfermline Athletic by BACS payment. It is utterly inconceivable that on that Saturday afternoon, the board of directors, which included Mr Ali Russell, did not know that on Monday afternoon they would be filing papers with the Court of Session. For the two clubs involved, despite the support of the SPL and the SFA, it will probably take months to recover the money to which they are legally and morally entitled from Duff and Phelps.”
He ended: “The second category of club involves any club in Scotland—or elsewhere—that has entered into financial transactions with Rangers, for example over the transfer of players. We know that at least one club, Heart of Midlothian, stated that it is owed close to £1 million for the transfer of a player to Rangers. It is in a more complicated situation—one that you will be familiar with, Mr Betts—concerning the rule of football first creditors. As I understand it, Scotland does not have the same rules as England about football first creditors, but that is an issue of ongoing legal dispute between the clubs, HMRC and the creditors.”
The news last night that Dunfermline Athletic could only part pay the wages owed to players and staff for the month of February, would almost certainly anger the self-confessed Pars fan further.
In today’s First Minister’s Questions at Holyrood, Alex Salmond said: “Many of us realised that the position developing at Rangers will have ramifications throughout Scottish football. Dunfermline Athletic is one of the earlier incidents of it.
“I’d be delighted to meet Dunfermline Athletic to offer any help the Scottish Government can do. All the clubs in Scottish football are vital and valuable and we should be trying to assist and help them all where we can.”
Meanwhile, despite reports that Rangers would start making players and staff redundant today, such an action has been put back a further 24 hours as the players discuss their options with the PFA Scotland – with reports stating that some could be willing to take a pay cut to stave off the culling of the playing squad.
A statement published earlier read: “Duff and Phelps, the administrators of Rangers Football Club, advise there will be no announcement today in relation to staffing levels in any department of the club. Discussions are ongoing regarding potential cost-saving measures and announcements will be made at the earliest opportunity, most likely tomorrow.”
Under-fire club owner Craig Whyte, in self-imposed exile (or hiding) in London, told STV this evening: “Clearly I’ve got enormous sympathy for anyone who’s losing their job in this process. But, what I would say is, that Rangers were a company in enormous financial distress long before I came along.
“This is part of solving the problem to make Rangers a stronger business when it comes out of administration, which we are all working very hard to do.”