Rangers on road to ruin from the start of takeover

The full, shameful diary of how Craig Whyte helped propel Rangers into a £140million debt nightmare was laid bare yesterday.

Administrators detailed step-by-step the deals and failings that have taken the club down a path towards fiscal armageddon.

The report, which was published ahead of a proposed meeting of all creditors, reveals that more than £93million is being claimed by HM Revenue and Customs.

The figure is mainly owing to the infamous big and small tax cases that Whyte inherited.

But since taking over the club in May last year, Whyte has amassed debts that made the previous regime of Sir David Murray look austere.

Excluding the tax cases, Whyte piled up £55.4million in debt.

And since the club went into administration six weeks ago, they have run up extra debts of £2.5million, with administrators’ costs of around £500 an hour further emptying coffers to the tune of £1.2million so far.

The report by administrators Paul Clark and David Whitehouse reveals that Whyte simply chose not pay VAT and PAYE bills from month to month – running up a bill of more than £14million.

Ironically, their own report points out that Duff & Phelps – then known as MCR BC – were engaged by Whyte’s Liberty Capital investment firm to help him buy Rangers.

The money owed to the company Whyte used to finance his takeover, Ticketus, is now sitting at £26million.

It was the Record who exposed Whyte for using advance season ticket sales to buy the club.

He denied it until the evidence was too overpowering. That fact is again underlined in yesterday’s report. It details how, around the time of Whyte’s takeover, in May 2011, Ticketus advanced £20.3million to a client account maintained by Collyer Bristow – Whyte’s legal firm.

That account was in the name of the RFC Group. In other words, the club Whyte was about to take over. The sum covered future revenue from season ticket sales. As we now know, this was the cash advanced to Whyte to help him buy Rangers.

Whyte finally stepped through the door at Ibrox on May 6 last year after previous owner Murray promised fans the new buyer would be a fitting successor. Murray has claimed that all “due diligence” was done.

The report goes on to lay out how Duff & Phelps were engaged by Whyte’s Liberty Capital to provide advice to the company’s management team – effectively helping Whyte in his business dealings for the time he was running Rangers until the point he took the club into administration.

Early indications were that Whyte would stump up £30million of his own money for the club but he finally paid a nominal fee of £1, with the deal passing the club’s debts to him.

Whyte claimed he would personally settle the £22million debt to Lloyds Banking Group, the thorn in the club’s flesh that had made it toxic to many buyers.

He also declared on May 10: “At this moment in time, there is no liability to HMRC.”

He was very wrong. On May 25, we reported on a boardroom cull that saw chairman Alastair Johnson and director Paul Murray sacked. Then chief executive Martin Bain and finance director Donald McIntyre were also suspended.

Both men went on to take legal action to freeze club assets.

After the boardroom bloodletting, it became increasingly clear Rangers were in a growing financial mess.

The report details how a financial overview that rang warning bells for the taxman was presented by MCR BC on June 13.

HMRC were appraised of the situation and it was clear Rangers “would be unable to continue to trade in the medium term without the introduction of third party funds or shareholder support”.
It also states that an offer of an interim payment of £200,000 was made to HMRC and further time was requested so the club could come up with an offer on the small tax case.

At the same time, Rangers were paying Ticketus for the deal hatched by Whyte to help take control of the club.

They handed over £3million to the firm, and a further £5million would be paid in September.

That was the month that saw Rangers legend John Greig’s 52-year association with the club end when he quit the Ibrox board along with ex-chairman John McClelland. They had been frozen out of the Whyte regime.

On October 18, the Record reported how Rangers kicked the BBC out of Ibrox over a documentary about Whyte. It revealed he was banned from being a director for seven years.

A Rangers statement branded the documentary “a muck-raking exercise”. But what was to follow made the documentary look tame.

The Duff & Phelps report details how, in November 2011, they were engaged as a firm by Rangers, having taken over MCR BC “to review the options available should (Rangers) become insolvent” and advise on further dealings with the taxman.

The report insists the firm were not asked to provide advice to directors on their personal responsibilities to Rangers, or the club’s creditors.

Within weeks – on December 1, 2011 – Whyte admitted he was once banned from being a company director and said the dispute with the taxman was a “dark cloud” over the club.

Fans raged in January when star striker Nikica Jelavic was sold to Everton for £5million, as detailed in the report.

But the biggest bombshell was delivered by the Record on January 31 – when we revealed how Whyte sold off four years of fans’ season ticket money to help fund his Rangers buyout.

We also told how high-ranking HMRC officials were investigating alleged non-payment of VAT since Whyte gained control.

This was all painting a vivid picture of how Whyte was running Rangers.

On February 7, we revealed that Whyte had entered into a bizarre- tie-up with English minnows Banstead Town – a deal that saw £250,000 of Gers’ cash disappear. On February 10, Whyte’s reputation suffered a devastating blow when he was ordered to cough up £93,000 to settle an unpaid bill with a roofing firm.

A sheriff branded his evidence “wholly unreliable” – like everything else he has said since “buying” the club.

Rangers went into administration on February 13, with the Record revealing the next day that the action was forced by failure to pay VAT and PAYE.

It was then the Record also revealed that Whyte had been working with David Grier, of Duff & Phelps, even before he bought the club – a story vindicated by yesterday’s report.

A crooked ex-associate of Whyte had earlier warned us that he would already have an
administrator lined up while he promised fans he would lead the club to glory.

By February 22, defiant Whyte declared: “I don’t do walking away.”

Three days later, his associate and fellow director Andrew Ellis washed his hands of the disgraced wheeler dealer.

On March 3, we revealed that Rangers had to slash running costs by £1million a month to make the club sellable.

On March 8, Paul Murray told us he was serious about buying the club,outlining how he’d held late night talks with administrators on behalf of his Blue Knights consortium.

On the same day, it was revealed that Rangers would be ruled out of Europe next season. As the criticism of Sir David Murray for his handling of the club prior to handing it over to Whyte grew, on March 14 he told the Record: “I was duped.”

Many fans have refused to buy his excuses.

The club’s battle for survival took a huge twist on March 24 when Ticketus insisted they “won’t do walking away” from the £24.4million they handed Whyte.

A legal bid to have the shamed owner’s infamous season ticket deal declared null and void was thrown out of the Court of Session in Edinburgh.

On March 30, we told how former chief executive Martin Bain dropped a hold on £480,000 of club money.