Comment on Daft and Dafter by HirsutePursuit.
July 23, 2013 at 3:40 pm
I try to keep away from conspiracy theories but this one really takes the biscuit.
Consider some of the responsibilities assigned to Gary Withey in the workstreams document dated 5th October 2011.
SFA & SPL regulations
Ability of Administrator to transfer/sell membership;
Points deduction or worse
SFA & SPL regulations
Meetings and PR
Emergency window for the sale of players
Liaise with SPL/SFA regarding possibility of player sales to raise cash
Then consider the email from Rod McKenzie to Gary Withey sent 6th October 2011..
Rod Mckenzie [mailto:email@example.com]
06 October 2011 08:58
To: Gary Withey
Subject: Re: Today
I understand that everything is exploratory at this stage.I have briefed the Chief Executive on our call. He has indicated that if there is an appetite to pursue this route that an outline paper is prepared setting out the process that is being proposed to achieve the discussed end. The paper should include, as well as the structure of the proposed transactions,how it is proposed that the points we discussed on compliance with SPL Membership Criteria, ground registration and player registration both with the SFA and SPL, would be addressed.
Look forward to hearing from you.
…and the subsequent email from Gary Withey to Craig Whyte later the same day.
From: Gary Withey
Date: 6 October 2011 09:30
Subject: FW: Today
To: Craig Whyte
He wasn’t asked to brief anyone on the call, but it seems as though there is a willingness to assist. Regards Gary Withey
T (Direct) +44 (0)20 7468 7234
F (Direct) +44 (0)20 7468 7334
Consider then, the very strange construction of the LNS Commission’s remit and the apparent unwillingness to present a meaningful case in pursuance of the “charges” against Rangers by the very same Mr McKenzie.
Whatever Mr Withey told Mr McKenzie, it seems that he became so alarmed by the news that an immediate phone call was made to Mr Doncaster to apprise him of the situation. This news was something he obviously felt went beyond his level of decision making.
Since he appears not to be the type to “wing-it”, one would imagine that Mr McKenzie would have sought very detailed instructions on what strategy should be employed when “prosecuting” the case against Rangers. Naturally enough, his go-to person at the SPL Mr Doncaster (himself a qualified lawyer) would have been able to provide the necessary input.
I take the 5th October 2011 as the start of the process that produced the 5-way agreement.
I just wonder how much of Mr McKenzie’s case strategy at the LNS Commission was planned/agreed by Mr Doncaster as part of that 5-way agreement.
Daft and Dafter
Apologies for reposting and the length of this insertion. These posts are from several months ago; but I see that the UTT(T) has sparked some comment re the LNS Commission decision. I still think that the important point has been missed.
Everything Has Changed
“Is the registration of a player the only factor in determining a player’s eligibility to take part in a competition?
D1.1 Subject to these Rules, to be eligible to Play for a Club a Player must first be Registered either as a Professional Player or as an Amateur Player.
Does this rule or any other rule or article, suggest that registration as a player automatically confers eligibility?
No! Player Registration is simply a first step towards eligibility to participate in any competition that the club enters. There are, of course, other competition-specific factors: he could be suspended, cup-tied or be subject to any number of matters that could affect eligibility to participate in a given match.
Let’s be absolutely clear about this. The status of a player’s registration is an utterly bogus issue here. The question is only about the eligibility of players to play for a club in specific SPL matches.
Whilst it is true that a void registration would make players ineligible that is not the point here.
D1.13 A Club must, as a condition of Registration and for a Player to be eligible to Play in Official Matches, deliver the executed originals of all Contracts of Service and amendments and/or extensions to Contracts of Service and all other agreements providing for payment, other than for reimbursement of expenses actually incurred, between that Club and Player, to the Secretary, within fourteen days of such Contract of Service or other agreement being entered into, amended and/or, as the case may be, extended.
This rule cover registration AND eligibility. Even if the registration (though later found to be defective) cannot be revoked retrospectively, the eligibility of players to play in official matches is a separate matter.
The rules clearly envisage a situation were the non-eligibility of a player to play in an SPL match comes to light after a game is played:
D1.11 Any Club Playing an ineligible Player in an Official Match and the Player concerned shall be in breach of the Rules.
The rules DO NOT say that: an incomplete contract renders the players registration void and therefore – as a consequence of the non-registration – the player becomes ineligible to play official matches.
The rules DO say:
An incomplete contract means the player is not properly registered AND is ineligible to play in official matches.
The commission was certainly entitled to consider the issue of registration and (perhaps) – on the evidence provided – come to the conclusion it did. But the commission also had a duty to consider the issue of player eligibility as a stand-alone matter. That appears, in fact, to have been their remit.
Why it chose to fuse registration with eligibility I simply cannot fathom from the published decision.”
“On the subject of Rangers gaining a sporting advantage or not…
Rangers were charged with fielding a number of ineligible players after 23rd May 2005 – however, this charge was dropped by the SPL and its “prosecutor” Mr McKenzie.
Rangers were never charged with gaining a sporting advantage by failing to fully disclose players’ contracts. The early SPL rules did not state that failure to disclose would result in the relevant players being deemed ineligible. That rule did not apply until 2005.
The guilty verdict they delivered was simply for failing to disclose all details of players contracts. The sanction – a fine – was deemed to be appropriate because the commission did not see anything in the rules or in the particular circumstances, that suggested a sporting sanction would be appropriate for a non-sporting offence. No evidence was provided by the SPL “prosecutor” to suggest that non-disclosure of parts of a player’s contract gave rise to any sporting advantage.
As it stands, the payments that were not disclosed are perfectly legal; therefore, if the affected players were not ineligible, it seems obvious that no sporting advantage was gained.
In the absence of a guilty verdict in the BTC, the SPL commission was certainly within its rights to apply a non-sporting sanction for non-disclosure prior to 2005. In fact, it is difficult to see how a sporting sanction could be applied.
The idea that LNS came to a perverse decision in relation to the £250k fine is simply sucking the lifeblood from this blog. I think the question over whether or not Rangers gained a sporting advantage is totally missing the point.
Let me explain.
In considering a potential Conflict of Interest, Lord Hodge has decided to await the result of the Insolvency Practitioners Association’s report on the conduct of Duff & Phelps in their administration of Rangers Football Club plc. I believe this is right and proper. Until he knows the outcome of the IPA’s investigation, Lord Hodge does not necessarily know all of the relevant facts, so cannot safely deliver a verdict and (if necessary) an appropriate sanction.
BDO, in turn, are unlikely to make any financial demands on the new Rangers, until Lord Hodge has made his ruling. For BDO the potential, to claim that rangers’ assets were sold under value is much greater if the administrators are found to have had a conflict of interest.
If the SPL had been considering “sporting advantage” as part of charges of which they were found guilty- or even as an aggravating factor – the commission could not have begun before the UTT had completed its work and published its findings. Since the SPL decided to push ahead with the commission and have accepted the result of the FTT(T) (without the possibility that it could be overturned) we have to believe that the SPL did not – and never intended to – prove that Rangers gained a sporting advantage by failing to fully disclose its players’ contracts.
Pressing ahead with the LNS commission before the UTT has completely settled the legitimacy of Rangers’ EBT scheme, effectively ensured Rangers sporting achievements prior to 2005 would not be adjusted by this commission.
The point we need to focus on is not the correctness (or otherwise) of a £250k fine for non-disclosure. This sanction is demonstrably fair as far as I am concerned. There is no legitimate argument that I am aware of suggesting that the SPL rules – as they were written prior to May 2005 – demanded a sporting punishment for a non-sporting offence.
Non-disclosure only BECAME a sporting offence when contract disclosure became a condition of player eligibility in 2005. Therefore, I believe the only sporting sanctions the commission could ever have applied were in relation to the specific charge of fielding ineligible players after 23rd May of that year.
The commission (wrongly in my view) took this rule to take registration & eligibility to mean the same thing. They (wrongly in my view) took the view that improper player registration would not affect eligibility retrospectively.
If this site is to seek focus in relation to the commission, in my view we need to focus on:
1. Why the artificial fusion of registration and eligibility was left to go unchallenged.
2. Why the SPL – despite ostensibly laying the charges – did not provide sufficient effort to prove to the commission, that players whose contracts were not fully disclosed, were ineligible in accordance with the rules as they have existed from May 2005.”
 Evidence was given by Alexander Bryson, Head of Registrations at the SFA, who described the registration process. During the course of his evidence he explained that, once a player had been registered with the SFA, he remained registered unless and until his registration was revoked. Accordingly, even if there had been a breach of the SFA registration procedures, such as a breach of SFA Article 12.3, the registration of a player was not treated as being invalid from the outset, and stood unless and until it was revoked.
 Mr McKenzie explained to us that SPL Rule D1.13 had hitherto been understood to mean that if, at the time of registration, a document was not lodged as required, the consequence was that a condition of registration was broken and the player automatically became ineligible to play in terms of SPL Rule D1.11. He accepted however that there was scope for a different construction of the rule, to the effect that, as the lodging of the document in question was a condition of registration, the registration of the player would be liable to revocation, with the consequence that the player would thereafter become ineligible to play. He accepted that no provision of the Rules enabled the Board of the SPL retrospectively to terminate the registration of the player. It became apparent from his submissions that Mr McKenzie was not pressing for a finding that Issue 3(c), together with the concluding words of Issue 3(b), had been proved.
 In our opinion, this was a correct decision by Mr McKenzie. There is every reason why the rules of the SFA and the SPL relating to registration should be construed and applied consistently with each other. Mr Bryson’s evidence about the position of the SFA in this regard was clear. In our view, the Rules of the SPL, which admit of a construction consistent with those of the SFA, should be given that construction. All parties concerned – clubs, players and footballing authorities – should be able to proceed on the faith of an official register. This means that a player’s registration should generally be treated as standing unless and until revoked. There may be extreme cases in which there is such a fundamental defect that the registration of player must be treated as having been invalid from the outset. But in the kind of situation that we are dealing with here we are satisfied that the registration of the Specified Players with the SPL was valid from the outset, and accordingly that they were eligible to play in official matches. There was therefore no breach of SPL Rule D1.11.
 For these reasons we are not satisfied that any breach of the Rules has been established in terms of Issue 3(c), taken in conjunction with the concluding words of Issue 3(b) quoted above. This is an important finding, as it means that there was no instance shown of Rangers FC fielding an ineligible player.
I don’t know that what Mr Bryson is reported to have said is incorrect in any way.
Mr Bryson said that the SFA treat an incorrect registration as standing until or unless it is subsequently revoked. Mr Bryson, as far as I am aware, made no statement on whether being registered (correctly or incorrectly) automatically conferred eligibility.
It was Mr McKenzie who seemed happy to link registration with eligibility.He (Mr McKenzie) then “accepted” an interpretation of Rules D1.11 and D1.13 that meant registration (correct or not) conferred automatic eligibility until the registration was revoked. He accepted that the SFA had no power to retrospectively revoke a registration; thereby accepting that players could not been deemed ineligible retrospectively.
The problem is that the commission were tasked with making a decision of the eligibility of players – not about the validity of their registrations. Registration,of course,is a necessary condition for eligibility; but it is not the only condition.
SPL Rule D1.13, in effect from and including 23 May 2005 provides:
“A Club must, as a condition of Registration and for a Player to be eligible to Play in Official Matches, deliver the executed originals of all Contracts of Service and amendments and/or extensions to Contracts of Service and all other agreements providing for payment, other than for reimbursement of expenses actually incurred, between that Club and Player, to the Secretary [of the SPL], within fourteen days of such Contract of Service or other agreement being entered into, amended and/or, as the case may be, extended.”
The LNS commission dealt with the registration aspect of Rule D1.13 – but they did not make any decision on the direct effect of this rule on the players’ eligibility. They chose instead, with the compliance of Mr McKenzie, to wrongly conflate registration procedures with eligibility.
It was up to Mr McKenzie to make the case that Rule D1.13 applied to both the registration process and separately on a player’s eligibility to play in official matches. That being registered (correctly or incorrectly) did not automatically over-ride the eligibility aspect of D1.13.
Mr McKenzie could have, and should have, given copious examples of players who had been deemed ineligible retrospectively.
Mr Bryson is simply the wrong target IMO.”
Fair Play at FIFA?
“A witness is called to give evidence by answering the questions that are put to him/her. The opportunity to provide information beyond the scope of the questioning is generally very limited.
Mr Bryson was not called to construct an argument for the “prosecution” – he was there simply to provide the information that was being requested.
It is right & proper that LNS should have looked at the registration status of the players in question. After all, if they were deemed to have not been registered, they would automatically have been ineligible. Mr Bryson seems to have given his answers in that context.
Mr Bryson says that, as far as the SFA are concerned, a processed registration is treated as valid until it is revoked. There are, he says, no SFA rules that allow a registration to be revoked retrospectively. His statements, relating only to the status of a player’s registration, seems fine to me.
It is not right and proper that having decided that the players’ registrations were valid that the commission did not consider the other conditions of eligibility
Mr Bryson, as far as we know, was not asked and did not offer a view on the eligibility of a player whose registration was found to be flawed. He was not asked, as far as we know, if registration automatically conferred eligibility to play SPL matches. It would not have been appropriate to ask these questions because those eligibility criteria are described, not by the SFA; but in the SPL rules and articles.
Unless you believe that a valid registration automatically confers eligibility, there is nothing in Mr Bryson’s testimony that diminished the SPL’s case against Rangers. The problem was simply that the SPL’s QC failed to construct a logical & persuasive argument and present the case to the greatest effect.
My assumption is that Mr McKenzie would have been acting under instruction from Neil Doncaster when considering what arguments to put forward. I just think we should be asking why the case construction was so inept – rather than focusing on a witness whose testimony (on what we know) I find hard to fault.”
Daft and Dafter
FTC/19/2013 – The former Rangers Football Club Plc (now RFC 2012 – in liquidation)
FTC/18/2013 – GM Mining Ltd
FTC/17/2013 – Premier Property Group Ktd[sic]
FTC/16/2013 – Murray Group Management Ltd
FTC/15/2013 – Murray Group Holdings Ltd
Probably worth reminding everyone that – although the proceedings are grouped together, HMRC have appealed the FTT(T) decision separately for each company involved.
This is a significant departure from the FTT(T) which was started as a single case when all were Murray Group companies. The Murray Group no longer has an interest in the outcome as it affects RFC.
If the HMRC UTT(T) appeal finds against RFC, I find it difficult to believe that BDO would choose to take RFC to the next appeal stage. There is simply no financial upside and – even if the legal costs were externally funded – the appeals process would take the date of dissolution out of their hands.
Remember BDO were appointed as liquidators by HMRC.
Daft and Dafter
July 19, 2013 at 2:16 pm
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I’ve noticed a few posts this morning about locked-in shares Rangers AIM shares and I think it’s worth putting it into some kind of perspective.
There are 65.1 million RIFC Plc shares which have been issued. The directors + key employees (Ahmad and McCoist) hold 9.25 million shares. Without sight of the Cenkos lock-in letters signed by Green and Ahmad it’s difficult to know if there was any wriggle-room that would let them escape the lock-in now that they are no longer employees. I tend to think it might have been easier for Ahmad to escape the cuffs as he was never a director of RIFC Plc but that might not be the case.
It would also seem that the lock-in period for these 9.25 million shares could be 18 months comprised of an initial 12 months + 6 months orderly market lock.
There was also a now expired 6 months lock-in for 16.375 million of the 24.25 million Institutional Investor shares placed at flotation. Obvviously the fan shares approx 7-8 million from memory are fairly static.
Yes Eco, my mistake. Should have checked.
I had been working on the false assumption that the institutional investors were locked in for 12 months.
Who Is Conning Whom?
I am with you in most of what you say, but there are some important differences.
SFA Article 6.1 & 6.2 say:
Clubs or associations undertaking to promote Association Football according to the Laws of the Game and these Articles and other rules of the Scottish FA may be admitted as registered members, associate members or full members, subject to the provisions of Articles 6.2 to 6.7 (both inclusive).
6.2 A club or association shall be admitted as a registered member automatically by reason of its being admitted as a member of an Affiliated Association or an Affiliated National Association, or in the case of a club through membership of or participation in an association, league or other combination of clubs formed in terms of Article 18 and in the case of an association by being formed in terms of Article 18, provided it is not already an associate or full member. A registered member shall not be a member of more than one Affiliated Association or more than one Affiliated National Association. A registered member may apply at any time to become an associate member.
We are in complete agreement, I think, that SFA Article 6.2 made Sevco a registered member of the SFA from the date it was accepted by the SFL – 14th July 2012.
But, and I think this is important, the nearest the SFA get to insisting that a club has associate or full SFA membership is Article 6.2 which simply says, ‘A registered member may apply at any time to become an associate member.’
Note: no timescale applies… and no consequences (from an SFA perspective) if a club chooses to not make that application.
So I think we are on common ground that Article 6.2 was applicable as far as the registered membership was concerned – and Sevco did not take the opportunity to apply for associate membership by this method.
If we then go back to what the SFL Rules actually said:
6. REGISTRATION WITH SFA A CONDITION OF MEMBERSHIPA Member or Associate Member who is not already a full or associate member of the Scottish Football Association must make application to become a full or associate member of the Scottish Football Association (as the case may be) within fourteen (14) days of being admitted to membership of the League failing which its membership of the League will lapse, and in the event that the application is unsuccessful, its membership will lapse upon that decision being intimated to the League.
Now, if the SFL was being prescriptive about which SFA Article was to be used (to apply for full or associate membership), and that Article 6 was the only valid route, why mention full membership as an option. If ‘application’ is meant to mean only applications in terms of SFA Article 6, the only relevant option would be to apply as an associate SFA member.
No, the SFL rules are not prescriptive in the manner of that application. I think Rule 16 is clearly written to allow a transfer of associate or full membership from an existing club to a new club or entity under SFA Article 14.
In fact the only method by which this could be achieved is SFA Article 14
14. Prohibition on Transfer of Membership14.1 It is not permissible for a member to transfer directly or indirectly its membership of the Scottish FA to another member or to any other entity, and any such transfer or attempt to effect such a transfer is prohibited, save as otherwise provided in this Article 14. Any member desirous of transferring its membership to another entity within its own administrative group for the purpose of internal solvent reconstruction must apply to the Board for permission to effect such transfer, such consent not to be unreasonably withheld or delayed. Any other application for transfer of membership will be reviewed by the Board, which will have complete discretion to reject or to grant such application on such terms and conditions as the Board may think fit.
…which allows the board to grant an application for transfer of an existing membership on such terms as it sees fit.
Importantly, the discretion only applies to which terms and conditions to a transfer of a membership that already exists.
Having complete discretion on how or if that transfer (of full membership) took place is completely within the board’s power via Article 14.
What it doesn’t do is empower the board to create a new type of membership.
And, even if it does claim to have done so, I still don’t understand how the SFA ‘conditional’ membership would satisfy the SFL requirement for an application for associate or full membership?
Remember, this transfer application was an SFL requirement. The SFA had no interest in whether or not Sevco applied for associate or full membership.
It seems to me that the SFA and SFL approached the Sevco scenario in a similar way as they did when Inverness Caledonian were admitted (as a new club) in 1994.
Difference is ICT, the SFL, SPL and SFA all recognise that that club was founded in 1994.
As I said earlier with regard to the birth of Sevco, the deceit is not so much in what they all did, but in what they said and continue to say.
Who Is Conning Whom?
The new club (Sevco) was issued with written permission to use the name of a club in full membership (Rangers).
This was necessary because both existed as SFA member clubs at the time.
Who Is Conning Whom?
This was the nub of the ‘conditional membership’
10.7 Each club in full membership or associate membership shall in its Official Return register its ground and playing field dimensions and no such club shall remove to another ground without first obtaining the consent of the Board. Any club in full membership or associate membership wishing to make any alteration to its name, its registered ground or its playing field dimensions must first obtain the prior written consent of the Board. No club in registered membership shall adopt in whole or in part the name of a club in full membership or associate membership without the prior written consent of the Board.
Who Is Conning Whom?
The 14 day application deadline was an SFL requirement – not something that the SFA had any locus in considering.
As long as Sevco was a member of the SFL it was a member of the SFA.
It would have been up to the SFL management committee to decide if the application for transfer (rather than application for a new associate membership) met its requirements. If it did not, it would have been within its powers to revoke Sevco’s league membership. It is an arguable point, but there is no suggestion, as far as I’m aware, that the SFL league management committee ever met to even discuss the matter.
Nevertheless, I think you are saying that Sevco was no longer a member of the SFL at the time of the SFA statement – therefore needed this ‘new’ SFA membership category to play Brechin.
But how would any type of membership of the SFA help if it was no longer a member of the SFL? If its membership of the league had already lapsed or been revoked, another SFL EGM would have been required to try and vote the club back in. I’m 100% sure that did not happen.
On 29th July, Sevco must still have been a member of the SFL as the Ramsden Cup was only open to members of that league.
There was simply no mechanism for the club to rejoin the league in the available time. If it did not rejoin (and I’m as certain as I can be that it did not) then it cannot ever have been removed as a member of the SFL.
And as I keep saying, as a member of the SFL, it was also a member of the SFA.
The SFA’s deceit was not in its actions – but was in its words.
Don’t forget that the SFA had to consider the use of the Rangers name. The ‘conditional’ membership squirrel has been particularly useful in covering up the SFA board’s approval for Sevco to play Brechin under the Rangers name.
That, in reality, was the big announcement on that day. The rest was sleight of hand.
Smoke and mirrors.
Who Is Conning Whom?
The golf club analogy has been used before.
Dear old dad is a member of St Andrews (other golf clubs are available). To make best use of the facilities new members must apply to a ‘house’ that will give access to their respective lounges and bars. After 15 years of continuous membership Mon pere was awarded the status of ‘Gold Member’.
Gold Members have their own lounge and gain a range of additional benefits.
Recently poor old dad has become poorly and suggests that l join the golf club and take over his ‘Gold Membership’.
I join the club and, with a letter of agreement from sickly pater, apply for the transfer of his ‘Gold Membership’ status.
The committee meet and decide that I can only take on the enhanced membership status if old pop dies.
I tell them that father is on his last legs and won’t last the weekend.
As an existing member I can enter the club’s Saturday medal competition. On a conditional basis, they tell me I will be eligible to use the ‘Gold Members’ facilities. They issue me with a letter to confirm this arrangement.
They will reconvene in several weeks to confirm the transfer of membership status – assuming that by then papa will be gone. If he makes a miraculous recovery I must then apply to join one of the standard houses.