By Bob Duncan
Fans and creditors of Glasgow Rangers were dealt a further blow tonight following accusations of a serious conflict of interest on the part of the club’s administrators Duff & Phelps.
Claims of conflict of interest and failure to disclose pertinent facts were made in a BBC documentary, “Rangers: The Men Who Sold the Jerseys?”, which was broadcast on BBC Scotland tonight (Wednesday).
The programme made the claim that David Grier, a senior partner in Duff & Phelps, was actively involved in setting up the deal which allowed Craig Whyte to take over Rangers in May 2011.
Craig Whyte funded his buyout of Rangers using money from London finance company, Ticketus, to whom he sold the rights to most of the next three years of season ticket sales. This represented more than half of the clubs income stream for those years, severely lowering the value of the club and stifling its cash flow.
It was lack of cash flow which caused the administrators to be called in on the 16th of February this year. Duff & Phelps were Craig Whyte’s choice of administrator and were appointed by a court without opposition.
The BBC Scotland programme revealed emails which strongly suggest that Mr Grier was party to the Ticketus deal.
One email from Mr Whyte’s lawyer, Gary Whitney, to Mr Whyte and Mr Grier was entitled “Ticketus Draft” and concerned the takeover arrangements. This was sent some 3 weeks before the takeover was completed.
In another email, dated 24th of June, Mr Grier undertakes to produce an invoice to Ticketus, which will be dated 9th of May, 3 days after the takeover of the club.
Forensic accountant, Roger Isaacs, after being shown the emails by the BBC, stated that they “suggest that David Grier knew about the Ticketus arrangement.”
“And therefore, in those circumstances, given that he was a partner of Duff & Phelps, I’m surprised that that involvement wasn’t firstly disclosed, and secondly doesn’t give rise to the sort of conflict of interest that I would have expected to have precluded Duff & Phelps from accepting the appointment as administrators.”
Duff & Phelps have raised a legal action against Craig Whyte and his legal advisors, Collyer Bristow, alleging that they attempted to defraud the club of £25 million. This case is based on a crucial meeting which took place just before the takeover, at which Mr Whyte and Mr Grier both failed to declare that the Ticketus money was being used to fund the takeover.
Mr Isaacs added: “So this suggests that David Grier was in attendance at the very meeting in relation to which his partners are now taking legal action. Which if true, is one of the starkest conflicts of interest I’ve ever seen.”
In response to the allegations, David Grier made the following prepared statement:
“I categorically deny that at the time of the Craig Whyte takeover of Rangers, I had any knowledge that funds from Ticketus were being used to acquire the club.
“However we were party to discussions regarding Ticketus as a recognised source of short-term working capital. Material information was withheld to (sic) us.”
The administrators, Paul Clark and David Whitehouse, who were previously part of another firm, MCR, which was taken over by Duff & Phelps, deny any conflict of interest exists.
In a written statement, Mr Clark said: “I thought that MCR became aware of the full scale of Ticketus funding in July or August. I gave an honest answer to the best of my recollection as I had not been closely involved in the Rangers takeover work at the time.
“There is a world of difference between knowing that Ticketus was a potential source of working capital funding for the club … and knowing that funding from ticket sales had been effectively used to purchase the club.”
The programme also claimed that payments had been paid using the controversial EBT system to people with links to former owner Sir David Murray’s companies and suggested one payment of £1million had been paid to Mr Murray himself, something the former owner denies.
Former manager Graeme Souness was also alleged to have received £30,000 just before a transfer deal was completed, despite having left Rangers ten years earlier.
There were also payments made to former captain Barry Ferguson who received £2.5 million and former manager Alex McLeish also received a six figure sum. The BBC also revealed that SFA President Campbell Ogilvie, who when Rangers company secretary, was another who received payments from the controversial EBT scheme.
The EBT scheme is the subject of an on-going case brought by HMRC against Rangers, which if the club loses could cost the ibrox outfit £50 million.
Sir David Murray, who famously boasted in 2000 that Rangers would spend £10 for every £5 spent by Celtic, sold Rangers to Craig Whyte a year ago for £1, since then the club has been placed in administration.
Duff and Phelps struggled to find a buyer for the club which was eventually sold to a consortium fronted by former Sheffield United chief executive Charles Green.
Following the documentary, Duff & Phelps announced that they were considering taking legal action against BBC Scotland.