It Takes Two to Tangle

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My Guess is HMRC will continue to appeal. For a …

Comment on It Takes Two to Tangle by Barcabhoy.

My Guess is HMRC will continue to appeal. For a number of reasons.

Firstly , they have aleady invested signicant resource into this case . So far without getting the return they feel they are due.

Secondly , It is clear from the language used by their legal team, they feel not only was the Murray Group use of EBT’s illegal , it was accompanied by flagrant misrepresentation and deception

Thirdly, this appears to be a key case where a positive outcome for HMRC will in all probability result in significant amounts of collectable tax from business’ using similar schemes

Fourthly, and this one may be highly significant from a tactical perspective. MIH are in their death throws. Murray said so in his last annual report. MIH are not able , as has been widely reported, to fund the defecit in their staff pension fund. MIH based on this are unlikely to be around to pay for a legal defence.

MIH , as admitted by Murray, will cease to trade in the not too distant future. The normal course of events would be to appoint an administrator. However the way MIH is being run down smacks entirely of doing everything to avoid an administrator and then liquidator being appointed. MIH have lost £390 million in the last 4 years alone. Lloyds have converted close to £300 million of debt to utterly worthless equity. My guess is trade creditors, who only amounted to £4 million at last look, will be paid in full and a deal will be done with the bank in yet another inexplicable debt for equity swap, which will result in no other creditors and no justification for an administration.

MIH has the feel of a business that is desperately keen to avoid anyone having a look under the bonnet. The bank seem to be complicit in this , they may have as many reasons to keep the real picture from being investigated.

The question is would they be brazen enough to use even more taxpayers money to continue to prop up this charade.

As a seperate matter, there should be an independent investigation into the actions of Lloyds equity injections into MIH

Barcabhoy Also Commented

It Takes Two to Tangle
StevieBC says:
July 7, 2014 at 6:14 pm

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I saw it. A nothing announcement from a business irrelevance .


It Takes Two to Tangle
Apologies in advance. This is long, but it sets out to show in detail how the SFA did not act on numerous red flags when dealing with Sevco Scotland.

I think its worth reminding the blog about matters i first wrote about on RTC and also in the early days on here. Others have commented also on a number of related issues, however I hear that the relevance is still significant, and the influence has not gone away.

Lets start with Chan Fook Meng (CFM) He was in charge of Orlit, who issued a winding up order served on Rangers. This was over disputed invoices totaling £400,000 . These invoices appeared to be a fee for services provided in raising funds. The winding up order never crystalised and the matter appeared to have been settled without recourse to the courts.

http://www.bbc.co.uk/news/uk-scotland-glasgow-west-21370477

CFM had a connection to Charles Green, through Nova Enterprises. Green was Chairman in the company reported to be “owned” by CFM. Brian Stockbridge was also reported to have a connection to CFM when Orlit was known as Tembusu Investments.

The London Evening Standard reported in May 2011 , before any of this would be of interest to Scottish Football, that Rafat Rizvi was previously Chairman and CEO of Tembusu when it was listed on AIM.

http://www.standard.co.uk/business/markets/city-spy-law-may-be-closing-in-on-runaway-rizvi-6400392.html

This should have been red flag #1 for the Scottish Football authorities. A clear link between Green and a man on Interpol’s most wanted list

Another interesting fact about Tembusu is that the Chairman prior to Rizvi was Jonathan Rowland, who’s father David “Spotty” Rowland was the finance provider behind David Duff and James Gray’s disastrous ownership of Hibs. Rowland owned 30% of Hibs when Duff & Gray had control. The very real fear for Hibs fans was that Rowland was reputed to be happy to sell the assets and allow a merger with Wallace Mercers Hearts. Tom Farmer stepped in and that piece of madness was avoided.

http://www.heraldscotland.com/sport/spl/aberdeen/chairman-reveals-how-he-won-control-of-hibs-1.600865

http://www.investegate.co.uk/article.aspx?id=20100122101109W2129

That was Red Flag #2 for the Scottish Football authorities.

The Nomad at Tembusu resigned when Rizvi was found guilty of defrauding an Indonesian bank of $600 million. They resigned because although Rizvi quit his roles he was replaced by his wife and the Nomad believed Rizvi was still controlling the business. The new Nomad was Allenby Capital, which was founded by Imran Ahmad, with Brian Stockbridge on board at Allenby as well.

This is red flag #3 for the Scottish Football Authorities. There are now clear links between Rizvi and Green, Stockbridge and Ahmad, and between Rizvi and the guy who had been a significant shareholder and provider of finance to those responsible for Hibs darkest hour.

Next we have the intervention of Charlotte Fakes

The emails leaked by Charlotte Fakes seemed to show that initial funding for Sevco came from Rizvi.

http://www.dailyrecord.co.uk/news/scottish-news/rangers-court-battle-charlotte-fakes-3159443

View post on imgur.com

View post on imgur.com

Red flag #4 for the Scottish Football authorities

Next we have proof of the closest link possible between Chan Fook Meng and Rizvi. This link is through a trust called the Bunny Foundation Trust. This trust has been set up to benefit Rizvi’s family. Rizvi is the Settlor ( he puts the money in) and Chan Fook Meng is the Protector ( he ensures the trustees act as directed) .

When setting up this type of arrangement you really need a Protector in whom you have 100% trust . The Protector can make or break any or all plans if he goes rogue. When you have this level of trust then you have someone who could front anything for you, especially if there was very good reason why you would want to remain out of sight.

http://offshoreleaks.icij.org/nodes/172905

So now we have Red Flag #5 for the Scottish Football authorities.

Rangers supporters have been failed by Regan & Co with regards to ensuring Rangers , after a period of extreme trauma, would be in the hands of credible , untainted and honest owners who would play by the rules. After the behavior of David Murray and Craig Whyte the very least they were owed was an ownership group who wouldn’t deceive , rule break, cheat and tax evade. They were also entitled to expect owners who would’t risk further trauma by helping themselves to what should have been important working capital.

The Scottish Football authorities may have extended a helping hand with regards to the LNS scope of enquiry and the issuing of a Euro Licence, but they showed they were weak and ineffectual or disinterested in the matter of who was “fit and proper” as owners of a very important Scottish Club.

A recent interview with Mazan Houssami had Houssami claiming that he was the sole shareholder in Blue Pitch Holdings. He claimed never to have met Green, which must make anyone of an enquiring mind , ie not Regan, wonder how on earth he became aware of the investment opportunity. Remember Blue Pitch were in prior to the Aim IPO, so this was a private placing at that stage. Houssami has no connection to UK business’ of which we or companies house are aware.

It may or may not be true that Houssami never met Green, however if a Lebanese lawyer is the only shareholder in a company who own part of a company in Glasgow, it does not necessarily follow that he is the ultimate beneficiary.

Lawyers and clients are able to count on client privilege which keeps their dealings secret. It is entirely feasible, and not uncommon, for a Lawyer in some jurisdictions to have a contract to act for a client , under client instructions with all benefits and entitlements passing to the client, even though the lawyer is the sole shareholder.

Quite frankly i have a huge problem believing a Beirut Lawyer who never met Green is the ultimate beneficiary of Blue Pitch Holdings shareholding. Everything points to Rizvi, who has provable connections to Green , Ahmad and Stockbridge, as still pulling the strings. More than probably using his close friend and trust Protector Chan Fook Meng

Red Flag #6

This brings us to the Easdale’s. Now if I was a respectable Beirut Lawyer , with a genuine investment using my own money, who wanted someone to act as proxy , then i would use a respectable Scottish Lawyer or Accountant. What i wouldn’t do is hand that proxy to a local West of Scotland businessman, especially one who had spent time in jail for financial fraud.

Someone of an enquiring mind , again not Regan and certainly not Ogilvie, might question under what circumstances a Beirut Lawyer would even know a Greenock bus operator . Or in fact if they actually had never met.

Here is where logic takes me with this.

Blue Pitch and Margarita are ultimately beneficial to and controlled by Rizvi & associates through Chan Fook Meng having appointed Houssami as the investment vehicle. He wants someone on the ground who won’t be phased by threats from supporters or enquiries from the media. Green was fine, but he is getting off the scene having let his mouth run away once too often.

Rizvi / Chan Fook Meng gets Green to recommend someone for the role of Proxy who won’t ask too many questions and can see the “good side” of someone convicted of financial fraud.

Green has the very people. He had previously met the Easdale’s when he was looking for committed funding to support the IPO. He knew their background and their personalty and character , and deemed them perfectly fit for purpose . There is every possibility the Easdale’s have never met or spoken to Rizvi or Chan Fook Meng, in fact I think it extremely unlikely they have . All that was required was an agreement with Houssami.

We now have Red Flag #7 Any more and we would have the audience for a military parade day in Beijing.

Laxey have appeared on the scene as opportunist value investors. Nothing wrong with that. It is precisely what they are charged to do by those who’s money they manage, including their own. They get their way by installing a credible and honest CEO in Wallace, however the damage has already been done contractually by previous executives.

Nothing can happen moving forward without the agreement of BPH and Margarita . It appears to me to be checkmate. Either pay Rizvi , if indeed my logic is correct, and you can then unwind the contracts draining the lifeblood out of the club or accept the fact that they will, even with new equity raised, continue to get an incredible yield on the initial investment.

A forced insolvency event would be incredibly risky all round. And then there is the possibly tenuous , and possibly not , connection to the guy who saw Hibs as a property play.

Which of these red flags have the SFA investigated, any of them ? What answers have they received, and now that all these connections have been pointed out, as we know they monitor TSFM, and i suspect occasionally respond under nom de plume , will they ask the questions they haven’t already asked .


It Takes Two to Tangle
There is an interesting example of why English Football is an immoral basket case in a news story from today.

Lyle Taylor is reported to be signing for Scunthorpe after rejecting an approach from Partick Thistle.

Scunthorpe play in the 3rd tier of English Football . Thistle in the top tier of Scottish Football. The normal response is that SPFL top tier clubs (Celtic aside) can’t compete with even tier 3 teams from England.

That is wrong. What is correct is that English clubs continue to spend recklessly , with wages often outstripping total turnover.

Let me provide the financials to compare Scunthorpe with Thistle.

In the last 4 years Thistle have made a small profit each season. Unfortunately Thistle do not publish their turnover or wages figure ( as an aside i would criticise them for that) . However it’s clear Thistle are a well run club who live within their means. I would estimate their turnover at somewhere slightly north of £3 million as an SPL club , and as they make a profit each year then its clear they probably have a wages / turnover ratio of around or under 60%

Scunthorpe do publish turnover and wages data, however thats the only area you can give them any credit for.

Turnover in the last published accounts was £2.4 million . Wages were £3.02 million . The club lost £1.5 million last year and has lost over £3.5 million in the last 2 years. It has negative retained reserves and is only “solvent ” on the balance sheet thanks to the valuation attached to their stadium. ( Readers of this blog will be well aware of how that scenario usually ends)

In Summary Scunthorpe are a very small club who are spending vastly more than they earn. They are in a precarious financial situation, yet they still continue to outbid well run and solvent Scottish Clubs .

Scunthorpe are by no means unique in the lower tiers in England, in fact they are just doing what almost every other club does. They gamble that they can get a promotion, and bring themselves close to terminal decline in the process.

English football club owners collectively have to be one of the stupidest group of people on the planet.


Recent Comments by Barcabhoy

On Grounds for Judicial Review
Fisiani,

Celtic aren’t employing a QC . The fans are. 

Celtic have direct access , as a member of both the SFA and the SPFL. They have already succeeded in a committment from the SPFL to a wide ranging enquiry . We await the terms of reference of that enquiry. However it will not include the potential to set aside the LNS enquiry, according to Rod McKenzie

Hence the need for the fans to ask a court to do so.The basis is LNS was not provided with relevent evidence of use of unlawful or irregular tax schemes . LNS , by his own words , said he proceeded on the basis that these schemes were lawful. He also stated that the SPL had rules to prevent breaches of Sporting Integrity and he found Rangers guilty of that , but not in a manner that provided Sporting Advantage.

Based on what was hidden from LNS plus what has been ruled on by the Supreme Court , that conclusion by LNS looks fundamentally flawed

The SFA have failed completely in their role as protector of the game. I have no doubt whatsever that Celtic want fundamental change there. However at this stage the fans don’t have a specific decision that the SFA have made , in regards to the Sporting Advantage , that was the subject of an independent panel, and therefore open to a JR request 
I agree that the non decisions described above by BRTH should be the subject and included in an SFA commisioned fully independent review . However as yet they have decided a 3 monkeys approach is all we are getting . Lets see if Celtic get enough support from other clubs on this one 


Launch of SFSA Fans’ Survey
1 The SPFL has guaranteed TV revenue for 3 years
2 Many clubs have record season book sales
3 Debt has been removed in most clubs
So ??
Why have SPFL clubs been silent so far , with the exception of Celtic , on the implications of the Supreme Court verdict
The argument is made that many are working hard just to make ends meet.
Fair enough , but when was that ever not the case in Scottish football.

 Are we to believe that there will never be an environment where clubs have an appetite to get Four-square behind the notion of Sporting Integrity ?

 
That can’t possibly be the case , otherwise why bother having a rule book .
Some clubs though are in relative robust financial health, their supporters have dug deep to help finance recent achievements.

 Don’t they deserve the respect , from club directors , of ensuring their club is treated exactly the same way as every club. Not every club bar 1

 
I’m looking particularly at Hearts , Aberdeen, Hibernian and St Johnstone. You have no excuses for silence , certainly not personal ambition for positions at the SFA or SPFL.
Do you really want your legacies to read :

 
I was scared to do the right thing in case we jeopardised some ticket revenue.
So I turned a blind eye to the actions of the authorities and 13 years of rule breaches by a member club “

 

That’s what you want to tell your grandchildren ?

If Clubs can’t speak out when they have guaranteed revenue, record fan support , are debt free and succesful , when CAN they be trusted to put Integrity at the top of their list of priorities…….or even on it .


Time for Scots Government to Take Bull by the Horns
LNS Though did comment on the Tax Case. He explicitly stated that as far as his enquiry was concerned the EBT’s were lawful and as such were not a breach of league rules
That is an important point. If the use of EBT’s in relation to their legality/lawfulness/regularity was a matter of no consequence , then LNS had no need to address them. The fact that he found it necessary  to comment on their legality is telling.
The only conclusion that can be drawn is that it is a breach of rules to use tax schemes which are irregular , unlawful , illegal or any of those categories 

Yet there has not been a single enquiry into these tax schemes. Is this because guilt had already been admitted by Rangers ? Is it because it would be impossible to come to any other conclusion that sporting advantage was gained ?


Time to Make Things Happen
Chill Ultra

How do you reconcile your statement that Res 12 was a board controlled project with the fact it’s only in the public domain because of the efforts of the requisitioners ? 


THAT Debate, and the Beauty of Hindsight
Here’s the challenge when it comes to sanctioning clubs for fan behaviour.

1 Minor Incidents can be hugely exagerrated through social media and press coverage.
Take the recent statement by Club 1872 blaming celebrating Celtic fans for Celtic players being attacked, racially abused and having dangerous objects thrown at them. Now even allowing for the fact that the statement was made by the Moron’s moron Craig Houston, it received disproportionate coverage in the msm, virtually none of it ridiculing the shameful nature of the statement.

In the same statement Houston claimed damage to Ibrox stadium in a pathetic attempt to equate half a dozen broken seats with the £80k of wanton vandalism deliberatley carried out by Rangers supporters at Celtic Park
Now anyone with a more than a single brain cell can see through Houston’s lies and bitterness, however his claims were published in the MSM and as far as i’m aware have not been ridiculed by journalists in the papers that published them. They therefore become unchallenged outside of social media, and down the line gain a currency of “fact” amongst those who don’t know better

2  Serious incidents can be downplayed by press coverage

Graham Spiers aside not many in the MSM are prepared to report on the large scale singing and chanting which breaks the law in this country. As another example take the Scottish Cup Final of last season. If you only got your news from the MSM , then you would believe all 11 Rangers players were attacked on the pitch . We know that’s a lie, and at most it appears a single player was the victim of a single attempted assault.
However the media have largely ignored the actions of a large number of Rangers fans who went onto the pitch intent on committing violence. Those who didn’t ignore it, enthusiastically bought in to Jim Traynor’s fabrication of a valiant band who were only intent in defending their players.  

There may be other incidents involving fans of other clubs which could be used to illustrate the points above. The issue though is we can’t allow the MSM to determine what is and isn’t a serious incident. Most journalists , i think, wouldn’t deliberately  mislead, but there are  clearly enough who would based on their track record


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