Todays Record Article

[chilledbear 16]

http://www.dailyrecord.co.uk/2012/01/31/rangers-owner-craig-whyte-admits-he-sold-four-years-worth-of-season-tickets-to-keep-ibrox-club-running-86908-23728301/

 

CRAIG WHYTE sold off four years of fans' money to help fund his Rangers buy-out, it was revealed last night.

And Record Sport can also reveal high-ranking HMRC officials are investigating alleged non-payment of VAT since Whyte gained control of the club last May.

Current director Dave King and former board member Paul Murray have been quizzed by the tax authorities as part of their enquiry which has revealed £24.4million has been borrowed against future season-tickets sales.

Tranches of tickets over four seasons have been sold to Ticketus, a London-based group linked to Octopus, and it's claimed this deal helped finance Whyte's operating costs after the takeover.

Whyte himself last night confirmed he had sold off the tickets but denied he used the money to pay off Lloyds Bank. He insisted the £18m for the bank came from one of his companies.

When Whyte took over Rangers' debt was £18m to Lloyds Bank and their wage bill had been reduced to £14m but it is believed the club could owe much more than that.

It's thought the current debt is £21m to Ticketus plus £5m VAT on the ticket deal. But there could be other bills due and of course Rangers are awaiting the final verdict on their £49m EBT (Employee Benefit Trust) tax case.

Last night Whyte insisted the Ticketus deal was normal practice for clubs and his spokesman said: "The suggestion that the Rangers takeover was funded through financing arrangements on season tickets is categorically untrue.

"Rangers FC is no different in that it has a working capital facility with Ticketus, as have many, many other clubs. It is a common arrangement in football. This facility was in place at Ibrox long before the takeover."

The EBT ruling is due within weeks and if Rangers lose they will be facing financial meltdown.

Their debt could then be in the £75m region with liquidation a stark reality.

But many now fear Rangers could be tipped over the abyss and into some kind of insolvency even before their Judgment Day over the tax case.

 

Rangers fans put their faith in Whyte believing he would get rid of the club's debt and also provide transfer money for manager Ally McCoist, who has been an impoverished bystander during this transfer window.

But the Ibrox club's support will be shocked by the detail of invoices and letters now in the revenue's possession. It is claimed these show Whyte sold off massive chunks of Rangers' future season-ticket sales.

And former board member Murray believes the takeover wouldn't have been possible without the fans, even though they had no idea future tickets had been sold off to raise extra cash.

Murray said: "These documents prove to me that Rangers fans have actually paid and will continue to pay for the sale of their club."

He added that HMRC have told him they are also due VAT, as much as £5m, on the deal with Ticketus and insists he has seen details of letters and invoices held by HMRC.

Murray claims that in one of the documents, a letter dated March 8, 2011 and signed by Whyte, it is alleged he made it clear that through Wavetower, his bid vehicle at the time, he would be entering into a deal to sell the season tickets to a company called Ticketus.

They are part of London-based Octopus, a perfectly legitimate lender who grant immediate loans based on future ticket sales. Record Sport managed to speak with most of the people who were on the Rangers board at the time of the takeover and they insist they knew nothing about the sale of season tickets. In fact they tried to ring-fence supporters' money.

The papers, which are being pored over by HMRC officials, are said to reveal borrowing against ticket sales for seasons 2011-12, 12-13 and 13-14 that Whyte was able to raise £24.4m.

Then on June 27 he was hit with the first of his repayment bills from Ticketus, who were demanding a total of £9.5m, their share of that summer's season-ticket sales. Whyte could only come up with £3.5m cash and to fill the shortfall mortgaged off part of season 2014-15 to the value of £6m.

Opening in March last year Murray claims the detail contained within HMRC's file is extensive and explosive.

This is the timetable and interpretation of events: March 8, 2011: A letter from Liberty Capital (one of Whyte's companies) is signed by Whyte and addressed to Ticketus.

In the letter Whyte confirms the intention to sell Rangers' season tickets to Ticketus.

April 7: Lawyers on behalf of Ticketus deposit £24.4m into a Collyer Bristow (lawyers for Whyte's bid) client account. A further £2m was placed in the same account from a company called JLT Benefit Solutions with £1m from the Merchant House Group, a firm of corporate finance specialists with whom Whyte is closely linked.

May 9: An agreement was entered into between Ticketus and Rangers to sell the season tickets.This was just three days after the takeover date of May 6. The bank was repaid the £18m.

June 27: Ticketus raised an invoice to Rangers seeking first repayment of £9.5m on their agreement. Rangers paid only £3.5m of that amount in cash and borrowed £6m more from Ticketus by selling another portion of 2013-14 as well as a portion of season 2014-15. Analysts stress there is nothing illegal in selling future ticket sales. In fact, it is common practice in British football, although the problems encountered by Leeds United and Newcastle United, who both borrowed too often and too much, are proof of the dangers.

Whyte has never declared the deals with Ticketus although HMRC documents suggest he has cashed in on fan loyalty.

The tax officials quizzed Murray and South African-based King, who was on conference call, as recently as last Friday morning.

They insisted they had no knowledge of what had been happening and Murray, who last year offered to take the club off Lloyds' books and invest £15m in the team in a last-ditch attempt to prevent Whyte from getting the club, said he couldn't believe what he was reading when presented with the HMRC file.

"HMRC asked for a meeting at the end of last week to find out what knowledge I, having been a director of the club at the time, had of these transactions prior to the takeover," Murray said.

"I knew nothing about this and although I have been questioned by HMRC and seen some especially revealing documents which are in their possession, it is still very hard to take in what has been going on.

"Collyer Bristow were acting for Craig Whyte during the takeover and I have been shown their client account, from the opening of it until today.

"I've also seen all invoices from Ticketus to Rangers and Rangers to Ticketus supporting all these actions.

"I can't believe Rangers have been handed over in this way.

"Remember also, the Independent Board, set up to make sure any potential buyers were capable of making the purchase and then funding the business, asked repeatedly where Craig Whyte was getting the money.

"He said it was from his own personal wealth and through Liberty Capital, which he insisted he owned 100 per cent, in the British Virgin Islands.

"Plans were being made to sell off future ticket sales but the directors were never told. This was all being done behind our backs."

King was also shocked to learn of the seasonticket sale and said: "Securitising season tickets is a valid seasonal funding strategy to smooth cash flows within the year - but no longer."

Whyte's spokesman added: "The takeover team instigated discussions with Ticketus prior to the takeover because the relationship with Rangers was already in place and the new owners wanted to continue it.

"They were clear from the outset they wanted to ensure there were robust working capital provisions in place that could deal with the many financial challenges the club faces.

"The takeover was funded by one of Mr Whyte's companies. Several months before then - and long before any discussions with Ticketus - Mr Whyte was asked to provide proof of funds for the takeover and he did that to the satisfaction of the previous owners, Lloyds Banking Group and professional advisers."

[GovanAllan 0]

Never a dull day in the Rangers family.

[ascender 352]

So, cutting through all the hyperbole and sensationalism, is this as bad as it sounds or is it just a businessman borrowing against future projected profits?

[franker 3]

To be honest, this news does not surprise me. Whyte has never demonstrated he had any substantial personal wealth, has refused to provide visibility of his business success and what could be gleaned of his business career, it was only a matter of time until a story like this surfaced.

 

The question for the supporters and in particular the Assembly and Trust is what are their options ?

[GovanAllan 0]

So, cutting through all the hyperbole and sensationalism, is this as bad as it sounds or is it just a businessman borrowing against future projected profits?

 

Will leave that to the Gersnet Accounts, but was interesting to here Paul Murray get tore in about dealing with ticketus and how bad it is but then we find out the last board also used them for cash flow.

 

Something stinks in the state of Denmark problem is I have no idea where the smell is coming from.

[GovanAllan 0]

To be honest, this news does not surprise me. Whyte has never demonstrated he had any substantial personal wealth, has refused to provide visibility of his business success and what could be gleaned of his business career, it was only a matter of time until a story like this surfaced.

 

The question for the supporters and in particular the Assembly and Trust is what are their options ?

 

You have to ask why would he use his money (if he has any) when he can use someone else's.

[biggordy 0]

How long has CW been in charge !!!! A tad early to talk about VAT returns doncha think.

Another mad phil production methinks.

[Bluedell 5,679]

It's strange that Paul Murray has so much information for someone who is no longer a director. Presumably a lot of it is commercially sensitive and therefore I'd suggest HMRC have no right to show him this.

 

I see the article is claiming that the wage bill had been reduced to £14m when whyte took over. The wage bill was £24m in the previous year, so I'd be interested to know how the club managed to get £10m off the wage bill in the 2010/2011 season. If that's crap, you have to ask what else in the article is crap.

 

If it true then it is deeply concerning. It's extremely bad business to mortgage your future income as was shown in the case of Leeds and I'm highly sceptical that it's common-place for clubs to take income from 3 years forward in advance as is suggested.

 

If and when the accounts are produced, they will make interesting reading and it should become fairly clear as to how much truth there is in this.

 

I agree with Franker that both the Assembly and Trust should be on to this immediately.

[Bluedell 5,679]

How long has CW been in charge !!!! A tad early to talk about VAT returns doncha think.

Another mad phil production methinks.

 

VAT returns are normally done quarterly.

[Darthter 542]

It's strange that Paul Murray has so much information for someone who is no longer a director. Presumably a lot of it is commercially sensitive and therefore I'd suggest HMRC have no right to show him this.

 

Found that kinda strange as well.....

 

Why would HMRC show an ex-director documents/communications between 2 companies that he has no connection with ie Wavetower & Ticketus??? Sounds a wee bit dubious to me.