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What Did Channel 4 Tell Us Tonight About Rangers? Anything New?

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A number of Scottish journalists had rubbished Alex Thomson’s earlier piece as simply repeating what they had published weeks ago. (This of course ignored the information published over a year ago by Andy here at Scotzine, by Phil Mac Giolla Bhain, and on the Rangers Tax Case blog.)

Alex Thomson, a veteran of war zones round the world had been surprised by some of the venom thrown in his direction, even being threatened by one journalist.

Whilst I am sure that, as a professional broadcaster and journalist, he would have done his work anyway to the full extent of his professionalism, he would not be human if there was even a tiniest desire to show that he was on the ball, and that he could break stories which some of those accusing him of being a “dupe” would not like.

The report concentrated on the EBT (Employee Benefit Trust) issue. This has dogged Rangers since before the Tax determinations were issued commencing in February 2008. It is likely to be the final heavy slab on top of the Rangers coffin.

What was new tonight?

Channel 4 had confirmation from Mike McGill, former director of Rangers and still a right hand man to Sir David Murray that not a penny had been repaid of the EBT “loans”. That does not prove anything of course, but it would seem to be rather forgetful of the Trustees if they had never remembered to ask for repayment of a “loan”.

Worse, indeed much worse, for Rangers were the documents Channel 4 had seen which referred to Martin Bain, when Chief Executive, and were passed to John McClelland as Chairman.

“…please pay Martin Bain £100,000 through the remuneration trust in respect of his bonus for the financial year to June 30, 2005,” ran one such letter.

One month later in July 2005 in another document, Martin Bain requested from The Murray Group Management Trust in Jersey a further loan of £100,000 “as soon as possible for the purposes of investment”.

On December 18, 2003 by letter he asks that his pay rise be paid through the club’s trust.

In that letter Martin Bain says it was suggested to him that “…any pay rise I got should be paid through the trust, obviously as a discretionary bonus as it cannot be contractual…”

He wrote too that “…my increase was to be non-contractual put through as a discretionary bonus as I do with players. Coaches and more recently John Greig.”

This is a public “smoking gun”.

It is well-known that Rangers operated EBTs. Indeed much of the public knowledge of the issue arises from details contained in Rangers annual accounts. However tonight’s programme helped shed some light on what the tax man’s case against Rangers has been about.

The exotic Paul Baxendale-Walker, self-proclaimed creator of the EBT “tax reduction” idea, and, quite literally, the man who wrote the book on EBT’s appeared. He indicated that Rangers used the strategy, but not as advised. The problem therefore is not that EBT’s were illegal per se, but that the way Rangers operated them allegedly was.

Finally Alex Thomson quoted another Martin Bain letter:-

“At the end of the meeting I gave her back the letter addressed to me from you that stated my contractual increase for her to shred.”

As Alex Thomson neared the end of his report he said, “Now what they were doing could well be perfectly legitimate but it’s questions like these upon which the tax case may hinge.”

We therefore have (a) an admission by the Rangers Chief Executive that directors, coaches and players were benefiting by means of the EBT’s.

We have (b) an acknowledgement that payments under them have to be discretionary.

We have (c) the Chief Executive writing to the Chairman, whom I presume was NOT a Trustee, asking for a payment.

We have (d) the Chief Executive acknowledging he had instructed an employee to shred important paperwork.

All of the above may well be entirely innocent. However, the first appearance is concerning, particularly for Rangers fans.

It might also be a coincidence that this came out today, just after Mr Bain dropped his claim against the club. Presumably the knowledge of the Channel 4 “problem” would have weighed on his mind in deciding what to do. It might explain why he dropped what seemed a court action with excellent prospects , to simply take his expenses.

When the First Tier Tribunal (Tax) issues and publishes its decision, then the full facts as determined will be made clear. From what is alleged here about Mr Bain, he and a number of other Rangers figures could well be caught up in its wake.

Indeed, it is possible that one of the only directors at Ibrox never to benefit by one penny from an EBT is….Craig Whyte!

Written by Paul McConville | Scots Law Thoughts

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