A Sanity Clause for Xmas?


Artificiality . Seems like a good word to describe what …

Comment on A Sanity Clause for Xmas? by Barcabhoy.

Artificiality . Seems like a good word to describe what has been happening at Ibrox since 1998.

Synonyms for artificiality:
insincerity, deceit, dishonesty , disingenuousness, double-dealing hypocrisy.

All of the above ring true to anyone following the various saga’s of Rangers over the last 16 years.

Artificiality works both ways. Having Rangers , Hearts and Hibs ,given the size of their respective fan bases , outside of the top tier of Scottish football is an artificial situation , in as much as all 3 have never been outside of the top tier at the same time .

Equally the financial doping that took place at Rangers , and to a much lesser extent Hearts , resulted in more artificiality. The illusion of clubs able to outperform their peer group based on vision and good management rather than insincerity, deceit, dishonesty , disingenuousness, double-dealing and hypocrisy.

So whilst there is an inevitabilty about clubs with large fan bases competing in the top tier eventually and almost all the time, the most important duty of the SFA and SPFL is to ensure that artificialty can have no part of our game.

They have continuously ignored the damage that is caused by wreckless deceitful owners. From Brooks Mileson to a whole host of owners at Dundee to Romanov to most damagingly of all David Murray.

Yet , we have no indication that Financial Fair Play is immininent in Scotland. We don’t have the report promised by Stewart Regan which would provide key financial data on all Scottish Clubs. The authorities still seem paralysed by events at Ibrox, and consequently leadership and the best interests of the other 41 Scottish clubs are left hanging in the air.

Clubs who have commendably taken action to restructure and put themselves in a better place financially need to be protected. Why should their efforts at financial stabilty be denied their reasonable sporting rewards just because one club refuses to behave in a responsible manner.

Artificiality started when Masterton decided that the Bank of Scotlands money could be used to fund Murrays ego. The consequences of that are well understood, however the SFA & SPFL appear to have learned nothing and have done nothing to prevent similar artificiality in future.

What Scottish football needs is an environment where the vision and outstanding management of an Alex Ferguson , a Jim Mclean or an Eddie Turnbull is given the opportunity to outperform all opposition .

What it doesn’t need is to create an artificial situation where one club is allowed to continually behave in a financially wreckless manner due to a sense of entitlement .

So my hope for 2015 is that the regulators will do their job properly and introduce FFP for the benefit of the Scottish game and publish the financial data that they promised they would 2 years ago.

They could also start to reclaim the trust of fans by investigating the actions of Murray and Ogilvie over the last 20 years , publish their findings and take appropriate action. Until they do all of the above they are unlikely to be considered fit for purpose, and the game will run the risk of more upheaval

Barcabhoy Also Commented

A Sanity Clause for Xmas?
Excellent article by Ian Fraser in todays Sunday Herald. There are many questions to be asked of and by Politicians .

Why did Lloyds and Bank of Scotland behave the way they did with regards to Murrays failed business.

Article below

Sir David Murray’s metals-to-property conglomerate Murray International Holdings (MIH) died last week, going out not with a bang but a whimper.

Sir David Murray’s fortunes changed when his accounts were transferred to Lloyds’s business support unit. One of its first goals was to persuade Murray to offload Rangers
Sir David Murray’s fortunes changed when his accounts were transferred to Lloyds’s business support unit. One of its first goals was to persuade Murray to offload Rangers
MIH and eight subsidiary companies – Premier Property Group, PPG Land, Premier Burrell, GM Mining, Murray Group Holdings, Murray Group Management, Murray Outsourcing and MMH NSS – are to be liquidated by Deloitte. The insolvency practitioners will be seeking to retrieve as much cash as they can from the firms’ assets and debtors before shutting down the companies for good.

Since the credit crisis blew a massive hole in Murray’s business plans six years ago, his bank, Lloyds – which completed its disastrous acquisition of HBOS in January 2009 – appears to have treated him with kid gloves. It had few qualms about pulling the plug on other HBOS ­customers who had built up massive debts with HBOS, such as John Kennedy’s Kenmore, Jonathon Milne’s FM ­Developments and Ken Ross’s Elphinstone Group.

But Lloyds was prepared to give Murray five-and-a-half years to disentangle and dismantle as much as he could of his business empire, as well allowing Murray Capital, a new private concern of Murray and his son, David junior, to cherry-pick some of his most cherished assets. The reason for this unusual leniency from Lloyds was ascribed to Murray’s tough negotiation skills, and highlighting the number of dependent Scots employees in a diverse group.

In his pomp in the 1990s and early 2000s, David Murray was viewed as one of Scotland’s most successful entrepreneurs. He caught the eye of Bank of Scotland’s former treasurer and managing director Gavin Masterton, and the bank first lent Murray money in 1981. Bank of Scotland went on to lend him the entire £6 million he needed to buy Rangers FC in 1988. By 2008, as part of HBOS, it had provided him with £900 million of debt to bankroll his wide-ranging business operations, which once encompassed commercial property, coal mining, metals trading and football. This was despite the fact that, even at its peak, the turnover of Murray’s group ­holding company never exceeded £550m.

HBOS senior bankers including chief executive of corporate banking Peter Cummings and the late Ian Robertson, managing director of corporate ­banking, gave Murray what amounted to an open cheque book. Together, Murray and HBOS formed a complex web of joint-venture companies into which hundreds of millions of pounds of the bank’s money were poured. In most of these property deals, the bank was effectively lending up to 40% of the money to itself.

Robertson, nicknamed “Robbo”, was infamous for “Robbo rollovers” – deals by which the bank rolled over existing loans into newly created special purpose vehicles, effectively making bad debts disappear in a puff of smoke.

One banking analyst said: “Property assets that ought to have gone into ­insolvency, or into HBOS’s intensive-care unit – which would have required the bank to book a provision for bad debt – were instead rolled over.

The roll-overs are said to have compounded Murray’s situation after the credit markets crashed, complicating his business empire’s problems. However, one of Murray’s more astute moves in the past decade was to sell his Murray International Metals business for £119m in 2005.

From the mid-2000s onwards, having witnessed the success that the likes of Sir Tom Hunter were having in commercial property, Murray massively boosted his group’s exposure to commercial real estate, snapping up provincial shopping centres and office buildings from Edinburgh to London. The number of deals accelerated after Robbo’s successor, Ray Robertson, former head of real estate at Bank of Scotland Corporate, assumed day-to-day responsibility for his affairs at the bank. Both Robertsons had such faith in Murray and his Premier ­Property Group they seemed willing to lend millions with few questions asked, though it was the worst of times to be investing in and developing commercial properties.

Things started to go badly awry when Murray moved away from calculated risk-taking and started using HBOS’s loans for what looked more like reckless gambling. This coincided from 2005 onwards with the adoption of what HBOS insiders call “kamikaze lending to the great and the good” as it sought to grow its ­corporate loan book by some 20% per annum to compensate for a slowdown in other aspects of its business.

Even after property markets ­weakened, Murray seemed impervious to the risk of a property crash. One month after the global financial crisis started in August 2007, PPG had some £500m of development projects under way, including a 175,000sqft speculative office development in Glasgow’s Bothwell Street. MIH was going to be able to defy economic gravity thanks to what Murray described in the 2008 annual report as “the breadth and depth of the group’s diversified portfolio and management team”.

When HBOS collapsed under the weight of massive bad debts and a short-sighted funding model, and the bank succumbed to Lloyds TSB in September 2008, the game was up for Murray. He and other tycoons had been used to picking up the phone to HBOS and receiving hundreds of millions of pounds within hours. That all changed after Murray’s accounts were transferred to Lloyds’s non-core business support unit (BSU), whose goal is to maximise value from distressed borrowers.

One of the BSU’s first goals was to persuade Murray to offload Rangers, partly because the club was such an obvious drain on resources and partly as it was seen as a distraction for the hands-on Murray. One ex-bank insider said Lloyds simply wanted out of football clubs: “Rangers was just soaking up cash. You can’t build a football business on overdrafts and borrowing, but that is what Murray seemed to be doing.” Two-and-a-half years after ceasing to be Rangers’ chairman in October 2009, Murray sold his 85.3% equity stake in Rangers Football Club to Craig Whyte for £1. The club subsequently collapsed into chaos that continues to this day.

Lloyds continued to allow Murray to do two massive debt-for-equity swaps which, given the fact that MIH’s equity was by now as good as worthless, were essentially free gifts. The first, in April 2010, saw Lloyds write off £150m of debt in exchange for an additional 12% stake in the company. Conditions included that Murray must liquidate three-quarters of MIH’s commercial property portfolio by 2015; introduce greater transparency into his business dealings; and stop using cross-guarantees, by which healthy and profitable parts of his empire were used to support more anaemic parts like Rangers. Such cross-support makes it more difficult to hive off businesses to third-party buyers.

A string of ­disposals, including that of oil and gas business Premier Hytemp and three shopping centres (sold for less than half their purchase price), followed. Unusually, in what seems to have been a sweetheart deal, the bank allowed Murray to personally buy back his private equity business Charlotte Ventures, partly because the assets within it, which included a stake in bus manufacturer Alexander Dennis, were seen as too high risk for the bank. Murray said the purchase of the unit, later renamed Murray Capital, was “done arm’s length, at market value”. A second £118m debt-for-equity swap followed in March 2012, the negotiations for which are said to have been extended and heated.

Murray claimed the deal – which took the amount of debt that had effectively been written off by Lloyds to £268.5m – did not dilute the Murray family’s 70% voting power over MIH. Talking about the winding-down of MIH, Murray said: “This has been a consensual approach with the bank, and it has been an orderly, managed process. It’s not been easy – it could have been easier to walk away and not do it – but it was decided with the lender that we would work this out, and we have.”

There are major assets which remain unsold, including Response, the call-centre business. It lost a contract with BSkyB, but has since won one for Scottish Power. In another unusual move, Lloyds let Murray and his family, through Murray Capital, buy Murray Estates, which owns about 1200 acres of prime development sites across Scotland’s central belt for just £13.9m. In addition to Murray Estates, Murray Capital also snapped up other unwanted MIH assets.

The Murray Estates portfolio includes a 13-acre site at Ratho Station on the western edge of Edinburgh, a 26-acre site near Edinburgh Airport, a 300-acre site at Torrance Park in North Lanarkshire, the 135-acre Kingdom Park site in Kirkcaldy and the 675-acre Garden District on greenbelt land adjacent to the Edinburgh City Bypass near Gogarburn. The latter offers scope for a £1 billion development of 3500 homes, a showcase garden project called Calyx and a new community stadium. For many years Murray has been ­piecing together so-called “ransom strips” to the east of Edinburgh Airport’s approach road, with a view to galvanising a wider ­development project called the ­International Business Gateway.

Things are already moving fast for the some of Murray Estates’ development sites. In November, Fife Council granted planning permission for the construction of a £500m residential district at ­Kingdom Park over 20 years. The same month, pre-construction work got under way on a £60m mixed-use development for phase one of Torrance Park in Holytown.

In its 2013 annual report, MIH said funding difficulties meant it was unable to develop the Murray Estates sites itself. MIH added it had considered ­selling the land in a piecemeal fashion to other developers but then “received an unsolicited approach from the Murray family in spring 2013 to acquire the ­majority of assets in the portfolio of Murray Estates”. A spokesman for Lloyds said the Murray Estates deal included an “anti-embarrassment clause” which enables the bank to secure a share of the upside should Murray Estates’ projects come good, but declined to give details. The MIH 2013 accounts noted: “The ­transaction completed after protracted negotiations and was supported by advice from two independent firms of chartered surveyors … plus significant potential additional consideration based on profits realised over 10 years.”

Intriguingly, even though Murray Capital (formerly known as Charlotte Ventures) also banks with Lloyds, Murray made clear Lloyds did not fund the £13.9m acquisition. He added that the non-embarrassment clause is geared to enable the bank to get a bigger share of gains if projects are sold or developed quickly, saying: “It was put in place to stop us flipping things for a quick gain.”

Overall, Murray has been shown far greater leniency than other failed property tycoons after Lloyds/HBOS was bailed out and commercial property prices crashed. One ex-HBOS insider has suggested that it was because he was “one of great and good, like Tom Farmer and Tom Hunter”. All three have been knighted, with Murray receiving his – for services to business in Scotland – in June 2007. The source added: “Sir David never had the great fall, the humiliation that some of the other over-leveraged property tycoons were made to feel.” His businesses’ outstanding debt to Lloyds stands at up to £346.7m, and the bank has, to date, written off £268.5m through debt-for-equity swaps, which suggests that the collapse of his business has left a £615m hole in Lloyds’s accounts, and that two-thirds of the money Murray’s businesses borrowed has been lost. And because of the 2008 bailouts it is effectively taxpayers who are picking up the tab. Meanwhile, he has walked away from the wreckage of his failed group with some of its most promising assets under his belt.

It is perhaps unsurprising that Murray presents the winding-up of his erstwhile business empire as a sort of triumph. ­Writing in the MIH 2013 accounts, he said: “In the prevailing economic ­conditions since 2009, the delivery of the numerous asset disposals and debt-reduction programme represents a significant achievement and a very ­credible performance.”

He said: “It’s not been without some ­casualties but we’ve done the best we could. The proceeds from the disposals have been optimised, enabling us to secure ­continued employment for more than 95% of the group’s 2008 workforce and minimising losses to other stakeholders and creditors. One of the reasons we have come through this as well as we have is that we had some prime assets and some good trading ­businesses. All the small creditors have been paid in full and everyone’s been paid their redundancy.”

Lloyds refused to comment “on the grounds of customer confidentiality”, but others might see Murray, along with bonus-crazed bankers in rescued banks, as the ultimate pet of the sugar daddy state.

A Sanity Clause for Xmas?
The stench of hypocrisy is getting stronger and stronger every day now from King and the 3 Bears. In fact not only are they happily prepared to say just about anything for favourable publicity, they go against the principals they employ in running their own business’

Take Douglas Park for example.

His business has given Bank of Scotland security over every single asset of the company . All of the assets of Parks of Hamilton are pledged to the company as security for loans made by Bank of Scotland.

Security of this nature is standard business practice. George Letham’s business’ have provided identical securities on many occasions .Football clubs who own their own stadiums up and down the length and breadth of the UK have used their stadiums as security for loans .

Yet when Premier Property (owned by David Murray) had security over Ibrox, or when MIH themselves did or when Bank of Scotland held a floating charge over every single Rangers asset , did we hear outrage and condemnation .

No , we heard nothing and leading the charge of those who were completely silent and never said a word were the likes of Dave King, Paul Murray, and Douglas Park. Yet all of a sudden it’s now an abomination for Ashley to get security . Whilst David Murray ,the man who destroyed Rangers , gave and took security over Ibrox without a word of criticism.

The 3 Bears and King are at it. Their game plan is based on not much more than rabble rousing. Their hypocrisy and disingenuous statements are almost at David Murray levels.

The various fans groups should also have a serious look at themselves. None of them , not a single one, decried the securities given over Ibrox to Bank of Scotland by David Murray. They are also guilty of hypocrisy for condemning Ashley when they were silent over Murray and Bank of Scotland.

The personal ambitions of the 3 Bears and King, especially King , seem to be the obvious reason for their hypocrisy. The fans have some excuse , given the highly emotional time it is for them. However they really should be wary of who they take their advice from.

A Sanity Clause for Xmas?
Barcabhoy says:
January 7, 2015 at 12:27 am
54 3 Rate This

Richard Wilson claims Admin least likely option ………agreed

He also claims it’s unlikely Ashley will provide more loans ……..don’t agree, in fact i think it is by far the most likely option.

Lets see who’s right ……….


Seems like The Bampots were right .

Recent Comments by Barcabhoy

Dear Mr Bankier

I don’t know what background you have in underwriting . I have long experience of working with financial institutions, including underwriting my own clients when providing financial agreements dor them 

I’m telling you for an absolute fact that lending institutions DO NOT underwrite based on the background of minor shareholders who have no control or influence


Easy Jambo explained the circumstances of the suspected organised crime shareholders . They are not controlling shareholders and don’t have influence. They don’t tell Douglas Park or the Morgan Stanley partner what to do 


Kicking Rangers just because it’s Rangers isn’t credible , especially when the real reason that Rangers are not creditworthy is much more significant . King stating it in open court has to be put into the context of why the question was asked and  the explanation provided


The law may be interested in what happens to the proceeds of any shares sold , but that is an entirely different matter .  A business with 4 non controlling, non influential shareholders who potentially are organised criminals out of a shareholder base of 12,000 isn’t setting any alarms off . 

Kings’s cold shouldering if he doesn’t comply , or if he gets found guilty of contempt , those are matters that have significant implications for Rangers   

Dear Mr Bankier

That’s not the way lending institutions operate. They aren’t sensitive to local chitter chatter, in most cases they aren’t aware of it . The authorities only take action if organised crime is affecting or controlling the activities of the business. The business’ themselves have obligations not to facilitate money laundering if they suspect their shares are held by organised crime groups 


You are ignoring reality if you think this isn’t widespread. The attached report details the extent of infiltration of business by organised crime



In the UK 5% of all business’ infiltrated by organised crime were plc’s

In parts of Scotland greater than 14% of all business’ have been infiltrated by organised crime. I’d attach images to back this up if I knew how to 

Dear Mr Bankier


Thank you for the explanation. I think that's consistent with my comments on organised crime shareholders 


King is a convicted criminal. It's not surprising other criminals were also attracted to becoming Rangers shareholders 


The reality is that lending institutions don't go through a shareholders register before making underwriting decisions. They do receive Intel from financial bodies and if they have flagged up concerns over ownership , that would factor in lending decisions 


However the fundamentals at Rangers are so bad that they wouldn't even look at Shareholders before Red flagging any application 


Personal guarantees from credible stakeholders would be the only way that a loan of any substance would be approved on normal terms 


If a loan was sought for say £1M and security was offered that was genuinely worth far more , a lender of last resort might take a punt on penal terms , but security of that nature is limited, does not include the Stadium, and is a real desperate measure 

Dear Mr Bankier


I’d wager BP , Coca Cola, Apple and Microsoft are shares owned by the Russian Mafia.


The key isn’t whether a company has criminal shareholders but whether those shareholders have influence or can make decisions. 


Rangers have 10,000 plus shareholders. Having 4 who control less than 10% wouldn’t automatically result in an underwriter refusing credit . 


Especially when those shares were purchased when Rangers were a listed plc 

Dear Mr Bankier
Cluster One


I follow your logic, but i don’t think that having organised criminals as shareholders would of itself be a disqualifying criteria for a bank loan. 

I would imaging many of the worlds biggest companies have shareholders who are organised criminals. After all those types of individuals need somewhere to wash their money , and property now is coming under more scrutiny 

The problem would be if any organised criminal was a person of  significant control ( a PSC ) then bank funding wouldn’t be possible .


The bigger obstacle to a bank loan is the disastrous trading record and the fact that business is effectively insolvent if not for the revaluation of assets , which is what Murray kept on doing to enable him borrow even more . 


Revaluing assets such as the value of the brand and property assets based on rebuild cost rather than market value is allowable , but any credit lending officer of any substance ignores it when the company concerned are running up huge losses and are cash paupers. 


The question of how will you pay me back when asked by a financial institution isn’t going to be satisfied by “ Champions League money “ .

It isn’t going to be satisfied by offering assets as security at their claimed balance sheet value.

It isn’t going to be satisfied by trading losses year after year.

It isn’t going to be satisfied without a copper bottomed business plan showing trading profits with positive cash flow and even then any lender ,other than a lender of last resort , will want to see evidence in terms of actual results rather than forecasts 


and even with all of that ,


a lender of last resort , is likely to run a mile when the guy providing the loans currently is constantly in court for refusing to abide by instruction from the Financial Conduct Authority which is the effective enforcement arm of the Takeover Panel


And as an uncomfortable little aside . The UK doesn’t have an extradition treaty with South Africa


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