By Bob Duncan
A judge has ruled that the Scottish Football Association (SFA) acted beyond its powers in imposing a year-long transfer ban on Rangers FC and has overturned the sanction declaring it “unlawful”.
The ban was given, along with a fine of £100,000, after the club, who went into administration in February over unpaid taxes, was charged with bringing the game into disrepute, preventing the club from hiring any new players over 18 years of age for the next 11 months.
At the Court of Session in Edinburgh, Rangers challenged the ban averring that the SFA was ultra vires as the ban was not included among the sanctions listed in the SFA’s own regulations and Lord Glennie ruled that the decision should be reconsidered by the ruling body’s appeal panel .
The judge set aside the SFA’s decision and said he would send it back to the SFA appeal tribunal to look at it again in light of his decision, adding that this did not necessarily mean the club would escape with a lighter punishment.
Aidan O’Neill QC, for the football authorities, argued that the tribunal had sought to find a sanction which would fit the breach committed. He said it was clearly thought that the fine was “simply not enough, given the gravity of the issues”.
Mr O’Neill said that if their powers of penalty were restricted to sanctions such as suspension or expulsion then suspension would have to be looked at, adding that the current sanction allowed Rangers to continue to trade and play.
The ruling could see Rangers facing an even bigger penalty from the SFA which could result in the club being banned from all competition, including friendlies. If the SFA do not take what are considered adequate sanctions against Rangers, they may themselves face a challenge from either EUFA or FIFA, who could also apply stronger sanctions to Rangers, making today’s court victory by the club somewhat Pyrrhic.
FIFA are sure to take a dim view of the case, with its own rules forbidding clubs from taking their ruling national bodies to court.
Yesterday also saw the details of the creditor CVA published on the Rangers web site and there has been additional consultation with certain stakeholders.
Duff & Phelps’ joint administrator Paul Clark said: “The proposal will offer the best return for all stakeholders given the position the Club is in. If approved by the creditors, the CVA proposal will rescue the Company and finally enable it to exit administration.
“We had hoped the results of this consultation would have enabled us to publish the proposal today but administrative alterations mean the document will be published tomorrow.
“Rangers supporters should be reassured the CVA process is on track. The creditors’ meeting to consider, and hopefully approve, the CVA will be held on Thursday 14 June.”
When questioned on the morality of avoiding paying millions of pounds in tax, Clark said: “I certainly understand the point and of course this problem isn’t just with football clubs, the CVA is a legally-binding deal and it represents the best deal for HMRC and the other creditors and therefore whilst it might mean that some monies are written off by the taxman it really is the best prospect of recovery and therefore we very much hope and believe that HMRC will see the same viewpoint.”
Charles Green’s group have pledged £8.5 million with another £3.5 million coming from transfer fees due to the club. Litigation over Craig Whyte’s takeover deal could provide further funds at a later date. It has also emerged that this £8.5 million is being made available to the club in the form of a loan, which is repayable to Green (with interest) by 2020.
Even if the CVA is agreed, Rangers will not be able to exit administration until July 12th at the earliest, due to the 28-day cooling off period which follows acceptance of a CVA.
However, it seems unlikely that the CVA will be accepted as it offers creditors less than 10% of the £55 million owed, and the total will be reduced by Duff & Phelps’ administration fee of £5.5 million, which could be greater than the total available to creditors.
Also, the HMRC are unlikely to give their consent to the deal, particularly if rangers lose their upcoming appeal against the “big tax case”, which would increase the total owed by around £80 million.
A spokesman for Ticketus, one of the major creditors, told Newsnet Scotland that they would make no decision for the time being.
He said: “Ticketus is happy to confirm that we have received the CVA, but we are not commenting further while we review the documents and unlikely before the meeting of creditors.”
If no CVA is agreed, Green plans to push through a newco purchase of the assets which would leave him needing to apply to the Scottish Premier League to take the current club’s place in the competition. This option would lead to only about £1 million being available to creditors, and is permitted under the dual contract Green has signed with the administrators.