Rangers - Whiter than Whyte

In a week when Rangers dominated the insolvency headlines, we can't resist looking through the papers to see if there any any lessons for small businesses and company directors in there. We turn particularly to the Herald  and the Guardian, as well as the eponymous @rangerstaxcase   

Firstly, when you are filing papers at Companies House, we venture to suggest you you should make some effort to get your name and date of birth correct. These are obviously something that Craig Whyte and Craig White both have trouble with – and the correct date of birth by the way is 18 January 1971, or 1969, or perhaps not.

 Secondly, if you are giving evidence in Court, do your best to remember what you are being asked about. You are not going to impress the Sheriff by saying you can't remember – or that it wouldn't have been anything important. Your ex-father in law can slag you off as “a man who doesn’t know the meaning of the word honesty” – people will be sceptical of what he says – but when Sheriff Ross opines that your evidence is “wholly unreliable” then the people with whom you may want to do business will sit up and take note. The decision, by the way is published at  http://www.scotcourts.gov.uk/opinions/CA327_10.html but forgive us if we quote a little here as it has replaced our usual book at bedtime. For example, of Whyte, the sheriff says

 88  “He was asked about [Tixway UK Ltd], and whether his wife was a director. He replied "I believe so". In my view it was hard to see why such a basic query should elicit such an indirect, equivocal answer. It was becoming apparent to me, by this point, that Mr Whyte was being careful to be as non-committal as possible in his answers. Whether this was due to the pressure of press scrutiny, as he alluded to in his evidence, was difficult to tell. It had, however, the effect of detracting from his evidence.

 And later

117 Mr Whyte's evidence as to the meeting was clear only on one point, namely that the defender was never to become the customer. On every other issue his evidence was vague and somewhat ambiguous. It was difficult to know, at times, whether his answers that he "had no recollection" of various points meant that events definitely did not occur, or that they might have occurred but he simply did not remember. His demeanour was guarded throughout, and his answers as short as he could manage. It is possible that he may genuinely have a poor recollection of the meeting, but that is double-edged - it means it is more difficult to accept his evidence when he seeks to be clear that there was "absolutely not" such an agreement.

 118 Significantly, Mr Whyte did not remember Snowcast credit limits being discussed at that meeting. However, all the other witnesses' evidence points to the Snowcast credit limit being the whole reason for the meeting. ... I cannot, therefore, accept that the Snowcast credit limit was not a topic of conversation - it must, indeed, have been the principal topic. That by itself casts further significant doubt over Mr Whyte's evidence

So it is hardly surprising the sheriff reached the damning conclusion: I reject the evidence of Mr Whyte as wholly unreliable. It is not possible to ascertain whether he is not telling the truth or is simply unable to recollect the true position, and has convinced himself that this arrangement is something that he would not have entered into. Either way, his evidence is contradicted by virtually every other piece of evidence. 

Thirdly, if you are going to be the saviour of a business (let alone a football club) then it is probably best to have at least some of your own money. Of course, at the time of writing we don't know where the Ticketus £24m has ended up – but it would not have difficult for Mr Whyte to have made this clear in one of his recent utterances. Instead, we remain baffled on both where the money has gone and why the administrators allow the “wholly unreliable” chairman to continue to hold court on the club website – unless of course he has guaranteed the funding of the administration and Duff & Phelps are closer to him than meets the eye. Perish the thought. And in a week when HMRC had a say in who was administrator of Portsmouth, they will no doubt have considered who they want to act (and who they want to fund to act) in this poison chalice.

We cannot help but see a similarity between Mr Whyte's antics holding up the cup at Ibrox and Robert Maxwell's antics handing our the medals at Meadowbank. At the time of the 1986 Commonwealth Games, when the late Cllr Cornelius Waugh was the vice-chairman of the Games Committee, he accused Maxwell of posing as “the saviour of the games” whilst only seeking personal publicity. The makers of the commonwealth games medals went unpaid. And now what price will Rangers pay for years of profligacy?

Finally, we note that HMRC's appearance at the Court of Session this week was brought about – not because of the disputed tax bill (be it £49m or £75m) arising from dodgy Employee Benefit Trusts – but because they had failed to pay any of the £9m of PAYE or VAT that had arisen since Craig Whyte's takeover in May. Was he perhaps playing “hard ball” with HMRC – threatening administration if they would not do a deal over the £9m current debt? We can confirm that HMRC don't take kindly to businesses that don't pay their tax. That said, they are often realistic about collecting arrears – and that includes writing off huge amounts in CVAs like the one the Rangers administrators will have to propose. No, what HMRC react to – and react to with some vigour – is to businesses that allow the amount due to HMRC to carry on increasing. You really have to be able to pay more than the current tax as it falls due before you can talk to them about a payment plan to reduce the overall tax debt. In that, at least, Rangers is no different from every other business in Scotland.