Rangers: Where has all the money gone?

Good piece in the Glasgow Herald this morning asking some searching questions about where all the money can have gone by the second week in February:

By all accounts, HMRC officials were on their way to serve papers to the Court of Session in Edinburgh on Monday, but Whyte beat them to it.

Speculation had been mounting this course of action from the taxman was linked to other unpaid bills and yesterday it was confirmed HMRC is investigating non-payment of £9 million in PAYE and VAT since Whyte took over in May 2011. Whyte disputes around 50% of this figure.

But this is nothing to do with the EBT case which has still to see its final findings made public. It could be nothing, it could be £75m … according to Whyte.

In an interview 10 days ago, Whyte said he had deposited the sum of £33m in a bank account in November 2010; these funds were for his proposed takeover. This would be the pot of cash to pay off debt to Lloyds, which when the deal went through was £18m, and also to inject working capital of £5m, allocate £5m for new players, £1.7m for stadium improvements and £2.8m to pay a historic tax bill to HMRC over a discounted options scheme.

On top of that, we know for sure he has raised £24.4m on future season ticket revenue through Ticketus, an off-shoot company of the London finance company Octopus. Whyte denies any allegation this money was used to pay off the bank debt.

We also know Rangers’ annual turnover in a season without any significant revenue from European football, as this financial year will be, is £35m.

From what’s apparent, the figures simply dont add up:

According to Whyte it costs £3.75m per month to run the club; so in the nine months since takeover those costs have been £33.75m.

If his £33m was used to fund everything he says it has, that still leaves the £24.4m Ticketus money and nine months of the £35m annual turnover, which is just over £26m.

So Rangers should have had cash at their disposal in the past nine months amounting to just over £50m, and you can throw the Jelavic money from Everton two weeks ago on top of that. Running costs over nine months have been £33.75m, which leaves around £20m in cash that does not appear to have been spent.

Meanwhile the Seventh Cavalry is trying to get itself organised

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  • Greenflag

    ‘which leaves around £20m in cash that does not appear to have been spent.’

    It’s probably resting in some bank account in one or other of the 100 plus crown colonies around the world 🙁

    Meanwhile Hartlepool sees unemployment increase by 25% with 16 applicants for every job .

    http://www.bbc.co.uk/news/business-17037635

    Will the lads from Lloyd’s or RBS or Credit Suisse support the next rescue plan or could Ranger’s be bailed out by the Scottish Government in the ‘national interest’ of course 🙂
    Anyway Whyte’s gapped it to London so he’ll nae be fussed .

  • Dec

    ‘Speculation had been mounting this course of action from the taxman was linked to other unpaid bills and yesterday it was confirmed HMRC is investigating non-payment of £9 million in PAYE and VAT since Whyte took over in May 2011. Whyte disputes around 50% of this figure.’

    Funny, in an interviewwith The Scotsman 10 days ago Whyte was disputing around 100% of this figure.You simply can’t believe a word that comes out of that man’s mouth.

    http://www.scotsman.com/scotland-on-sunday/sport/interview_craig_whyte_chairman_of_rangers_fc_1_2098205

  • derrydave

    One thing is for sure – Craig White is a man with a very chequered history and a man who has no problem with ‘being economical with the truth’. He has already denied a number of things in public which subsequently turned out to be true (for example the Ticketus deal), and has often misled the Rangers fans about what is likely to happen.
    Without doubt he is in this to make money, leave creditors empty-handed, and get out. This is his MO as can be seen by his past – one newspaper article mentioned 24 companies in which he has been involved being liquidated. He has been in court on numerous occasions related to his past dealings, and has been disqualified from acting as a company director for 7 years.
    He obviously has a plan for liquidation, with Rangers NewCo rising from the ashes – this has been his plan from day 1 I believe – hence his decision not to pay his taxes despite significant financing coming in to the club in the form of the Ticketus money. He must have hived the Ticketus money off into a related company – how he has done this however I am not sure ? If he in effect used the Ticketus money to pay off his loan to the company then he has lost his preferred creditor status and so how could he expect bring the company assets across to Rangers NewCo which he would set up ? Really not sure. Also, I’m sure Ticketus must have demanded some form of security before advancing a loan to a company in such obvious danger. Is Ibrox that security ?
    I would be very surprised if he got out of this without facing criminal charges. The taxman know who he is, and have had prior dealings with him – they are out to get him now, however time will tell how smart Craig White really is.

  • cynic2

    Many football clubs seem to either be giant ponzi schemes or, like newspapers, vanity projects for rich men with very deep pockets and large egos.

  • john

    Simple answer – On cr@p players. Rangers and Celtic were paying premiership wages to past it players. Celtic nearly went bankrupt in the nineties and were only saved by Fergus McCann. Rangers need someone similar straight talking with a realistic financial plan. What is it with most chairmen they make a fortune in various business ventures usually by being clever and as soon as they own a football club they seem to just lose their head and spend like there is no tomorrow. If Rangers and Celtic spent only a quarter of the money over the last 15 years would things be much different no they still would have been first or second in the league and shared all the cups. Both did get to a europa/uefa cup final fair play but both lost, Celtic had a fantastic home record in the champions league nearly winning all their home matches but then went on to lose every away match and as a result never progressed so hardly worth all the effort and money. Im glad this has happened not because I dont like Rangers but because football in general needs to learn an important lesson. My only fear is that Rangers being a well supported football team will be dealt with very lightly unlike any other company in a similar position.

  • Neil

    My only fear is that Rangers being a well supported football team will be dealt with very lightly unlike any other company in a similar position.

    I’d rest easy. I imagine the HMRC people will be as bloody minded and ruthless as they usually are.

  • dwatch

    If what has been coming out about Craig White in the press is true he seems to be a bit of a charlatan. After HMRC made a horlicks of the Harry Redknapp case over peanuts, and lost, HMRC are now out to make a name for themselves with Craig White and Rangers FC being the loser.

  • Barnshee

    “I’d rest easy. I imagine the HMRC people will be as bloody minded and ruthless as they usually are.”

    What planet do you live on?

    http://www.guardian.co.uk/money/2011/dec/06/hmrc-tax-deal-vodafone

  • There are many strands to this story and perhaps a political strand has yet to emerge.
    (I understand Hearts paid their tax bill last week……Salmond is a supporter).

    The Inland Revenue position is interesting. Heavily criticised over Mapeleys and various sweetheart deals, it has to use its resources sparingly.
    There are more smart-assed accountants than folks in IR Compliance Units.
    But in times of austerity the Tory led government (no friends of the Revenue) has to be seen to act.

    The public attitude is ambiguous. Not just a division between self employed and PAYE. But a man taking £100 wrongly in DLA benefit is reviled in a way that a multi million pound tax evader/avoider would not. Neat tax avoidance schemes such as those that Rangers used for its players might even be regarded as a necessary evil. But witholding PAYE contributions can affect ordinary people and that seems a step too far for Joe Public.

    The Revenues Compliance Unit are basically high-flyers who are underpaid and most use their training to leave the game-keeping trade and become head hunted as a poacher by the accountancy companies who used to sit accross the table in negotiations.
    Indeed trade magazines…..oops “professional” magazines routinely target Inland Revenue employees in their display advertisements.

    Targetted deals are therefore the name of the game. The most cost effective route.
    Thus convict a single high profile jockey of tax evasion and half of Newmarket gets on the phone to make a deal. Likewise high profile entertainers “getting off” might seem like a defeat until the long line of entertainers on the 19th hole of a golf club start making deals.

    Which means that the seeming defeat of the Revenue in Edinburgh yesterday will be an alarm call in a few boardrooms.

    There are clearly jig saw pieces which can be joined together in this case. But there is little new. There have been cases in England where spivs have ruined more than one club while managing to walk away.
    There are few Bob Lords, Louis Edwards and Tommy Trinders around in the 21st century.
    They were not all bad.

    But interestingly Terry Butcher the ex Rangers man at Inverness says that his club are owed money by Rangers in respect of a transfer.
    Do Rangers have Inverness over a barrel? Or vice versa?

    Will Inverness accept 25% to stay in business themselves or hold out and screw Rangers?
    The extent to which Rangers can influence other clubs to influence Rangers itself will be interesting.
    And will leave a very bad taste.

    The position is not merely that Rangers are a well supported team which will be treated leniently. Across the country there are big businesses who have their suppliers, creditors, local government and even the Inland Revenue over a barrel.
    After all………a small hospital could be built with £75 million ……….but it will be the job of the administrators to negotiate that (disputed but probable) liability downwards.

  • keano10

    The Sun Newspaper have today admitted hacking in to Ally McCoist’s phone and topping it up with a tenner… 🙂

  • Dec

    ‘Neat tax avoidance schemes such as those that Rangers used for its players might even be regarded as a necessary evil.’

    The kind of scheme Rangers operated, the Employee Benefits Trust (EBT), cannot be tied to contractual obligations e.g. salaries, appearance money, win bonuses, flute-playing etc which would normally be subject to PAYE and National Insurance contributions That is the point where the line is crossed between legal tax avoidance and illegal tax evasion.

  • redhugh78

    So much for Rangers annual ‘armed forces day’, seems the supposedly ‘quintesentially British club’ aren’t as loyal to her majesty after all.
    Couldn’t make it up.

  • farrochie

    Now where did that £24M go from Ticketus? Administrators can’t quite put their hands on it.

    http://www.bbc.co.uk/news/uk-scotland-glasgow-west-17067141

  • galloglaigh

    I found this today. It’s kinda funny!

  • USA

    From today’s press conference:

    In a press conference on Thursday, joint administrators Paul Clark and David Whitehouse also revealed that a £24million loan from Ticketus against season ticket sales did not go through the company’s accounts.

    On the issue of Ticketus money and HMRC, Whitehouse admitted: “That’s not common practice.”

    Here is a link to the whole article.

  • dwatch

    http://www.youtube.com/watch?v=-HyPCe73fdw&feature=share

    I think there is more involved in hanky panky than just Craig Whyte.

    “Rangers in crisis: More questions than answers after administrators speak out”

    RANGERS’ administrators last night attempted to play down their link to the takeover team which engineered Craig Whyte’s buyout.

    http://www.dailyrecord.co.uk/football/spl/rangers/2012/02/17/rangers-in-crisis-more-questions-than-answers-after-administrators-speak-out-86908-23754332/

  • lover not a fighter

    How have Rangers got away with this for so long.

    And how has it come to pass that so many flyboys and shysters are involved in football clubs.

    Or even worse and probably more accurately how have so many flyboys/shysters got to control so many banks and business’s.

  • farrochie

    Only one place to get the insider information. The Rangers Tax Case blog embarrasses the mainstream media with its investigations and knowledge of the inside.

    http://rangerstaxcase.com/

  • Charlie Sheens PR guru

    There’s a term in scottish football parlance for this less than enthusiastic pursuit of all things Rangers by mainstream media journalists. Its called “succulent lamb”.