Peace – Not War


Subsequent to the “Worthington Report” I had a look at …

Comment on Peace – Not War by easyJambo.

Subsequent to the “Worthington Report” I had a look at Aiden Earley’s website:

One of the pages on the website contains the following comment about what will happen next. Watch this space.

Details concerning the arrangements for smaller shareholders will be published after commencement of legal action against the parties identified in the report; however, by way of guidance, the timetable for delivery of certificates in the new listed vehicle is not likely to take more than 90 days. It is expected that the first Letters Before Claim will be issued against certain of the main parties identified in the report during week commencing 19th December 2016, and legal proceedings issued two weeks thereafter. The Letters Before Claim and related information will be published on this website for the sake of transparency.

easyJambo Also Commented

Peace – Not War
I’ve had a quick read through the Worthington report.

It comes across as a fairly powerful rebuttal of (primarily) Tom Winnifrith’s claims.  However I am in no position to judge on the accuracy of either parties allegations.  Unless the arguments on both sides are tested in court they will remain just that, unsubstantiated claims.

The tenor of the report is to explain away Worthington’s business failings by way of an indiscriminate attack on each and every party that has criticised the company in the past.

I used to read a fair bit of Ton Winnifrith’s mutterings but, like JJ, I became wary and questioning of some of the claims made in his blogs.  I also got sick of TWs promotional material appearing in my email inbox day after day, so I ended up unsubscribing from his site.

I obviously know what has been discussed in court when I have been present. I would have expected that several of the claims made in the document, and previously elsewhere, could be considered to be in contempt of court in relation to the Fraudco proceedings, but the fact that they have been published outside Scotland may offer some protection.

Some of the legal claims against both the Oldco and the Newco have previously been dismissed both by BDO and the RIFC Board, while a judge has “sisted” one particular claim against the Oldco until after any Fraud trial. Personally I don’t see a lot of mileage in the claims, but I’m not legally qualified, so my opinion is not worth much. 

On balance I suspect that there an element of truth in at least some of the claims made in the report, but equally, so I would doubt that the company is squeaky clean when it comes to the business ethics of those involved with Worthington,  e.g. did we ever get to the bottom of Oldco’s alleged £250K payment to Banstead Athletic? 

Peace – Not War
Club 1872 has made a statement today……… (not about the roof though)

That they have terminated their agreement with Lionbrand, who had been supplying replica merchandise without Rangers IP.  I don’t think that it is much of a surprise given the influence that the club has over Club 1872

The agreement that the Club 1872 working group had with Lionbrand has come to end with the election of the new Board. Club 1872 would like to thank Lionbrand and those purchasing its products for the donations received to date.
Going forward, monies raised by Lionbrand will be used for other purposes and will not be donated to Club 1872.

Peace – Not War
I have enormous sympathy for anyone with mental health issues, but less so when it come to those who have sought to avoid paying tax.

It’s perhaps down to my left leaning politics, but virtually all those who took advice that it was ok to invest in these schemes were already earning much more than the average Joe.  It seems to be a widely accepted mantra that the more you earn the greater the desire to avoid tax, and the greater the opportunity to do so.

Look at the latest “image rights” fiasco, which allows top players to siphon off 20% of their contractual income into an offshore company. The players won’t complain about it as it reduces their PAYE tax liability, nor do the clubs as it reduces their NIC costs.  Isn’t it simply a redirection of earnings, which was the argument used by the CoS judges in the EBT case.  Let’s hope that the Supreme Court gives a clear and unequivocal ruling on what constitutes a “redirection of earnings” in order that such loopholes are closed.

Personally, I would make all tax avoidance schemes automatically illegal, unless the companies have written approval from HMRC for their particular scheme.

The most popular (and legal) tax avoidance scheme is probably the ISA, but even that requires a substantial amount of free funds in order to take full advantage of the current £15,240 annual limit. How much free funds do people on an average annual salary of around £28,000 have after paying PAYE, NIC and all their bills? 

Other widely used means of tax avoidance (probably more accurately “evasion”) are cash in the hand payments to tradesmen that don’t go through their books. Just consider how much better off our NHS and Social Services would be if everyone just paid what they were due. 

I’ll get off my soapbox.  11

Recent Comments by easyJambo

It Is Better To Offer No Excuse Than A Bad One
Allyjambo January 2, 2018 at 14:38
My one overriding memory of the Ibrox disaster was that of the five schoolkids aged between 13 and 15, all from the village of Markinch in Fife, who lost their lives.  I lived just a few miles away and was only 15 myself, at the time.

I remember those losses having a huge impact on the local Fife schools and communities.   

It Is Better To Offer No Excuse Than A Bad One
HOMUNCULUS DECEMBER 28, 2017 at 15:38
It doesn’t matter if it is paid to a trust or your aunt Agatha, you still have to pay the tax. I have no idea why they use the name Agatha, but they do. 
“Aunt Agatha” was used by the RFC QC Andrew Thornhill during the appeals process when discussing the redirection of earnings to a third party.

On a separate point about the share price.  The sale of Ashley’s shares to Club 1872 and Julian Wolhardt was used by King’s QC at the CoS, as an example of shares trading above the 20p price.

The TOP’s QC, however, countered that by claiming that Ashley wasn’t interested in the share price, but was insistent that he received £2m for his shares. To that end, it was pointed out that the price per share paid wasn’t 27p, 27.5p or 28p, but something to the second or third decimal place that ensured that the sum received was not £1,999,999 but a fraction over the £2m figure.  I can’t recall the exact fraction used, but the counter argument put forward seemed entirely plausible.

It Is Better To Offer No Excuse Than A Bad One
Homunculus December 27, 2017 at 22:39
EASYJAMBO DECEMBER 27, 2017 at 22:32
Is there a way of calculating how the issue of new shares reduces the value of the existing ones, or is it not as simple as that. I don’t imagine for a second it is. 
I cannot believe that the sale of new shares does not effect the value of those held by existing shareholders. That would surely be market capitalisation gone mad. 
It’s not as simple as the share price being reduced inversely proportionate to the number of additional shares issued.

The capital value (no of shares x share price) of the club is presently around £16m at 20p a share (80m x 20p), but given that the club also has £16m of debts, you could argue that a debt free club would be worth £32m (or 40p a share).

The value of the shares going forward would depend of the amount of debt written off and the number of shares issued in order to achieve that. e.g. if they double the number of shares to 160m in exchange for writing off half the debt.  The capital value of the club might go up to £24m, as it only has £8m debt, but the value of each shares would probably fall to 15p. (160m x 15p = £24m)

If however, they manage to double the share numbers, write off half the debt, but also raise £4m in new money, then the capital value of the club should go up by £4m (the new money). So you could see the capital value rise to £28m, but still with £8m debt. The share price might then be 17.5p (160m x 17.5p = £28m)

I hope that makes sense. It does to me, but the nuances of share numbers, to debt, to capital raised can easily be lost, if you don’t have an appreciation of where they are at just now, and where they might end up.

It Is Better To Offer No Excuse Than A Bad One
shug December 27, 2017 at 22:05
Great hard fought match tonight.
Sadly, that was two hours of my life I won’t get back.  There was nothing great about it and it was more of a borefest akin to many derbies of yesteryear.  Tom English described it perfectly as “Thud and Blunder”

It Is Better To Offer No Excuse Than A Bad One
Homunculus December 27, 2017 at 18:21
I take it all that has happened is that they passed the resolution allowing them to issue new shares. Those new shares have now been created.
This is them simply notifying Companies House that they have done that, Companies House records show how many shares have been issued.
That has to be done before they can actually sell them to anyone.
Purely a procedural matter I would have though. 
It’s not got as far as creating the shares. It’s merely confirmation that the Board has the authority to issue shares up to the specified limit.  That authority expires on the date of the next AGM.

The allotment of up to a nominal value of £1,086,376.01, means that new shares equivalent to 1.333 times those currently available can now be issued.  I’m sure that there will be a good reason for the number of new shares being set at that specific level, but I can’t think of one. 

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