Sir David Murray hits back at Rangers ‘cheats’ claims

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By a Newsnet reporter
 
Former Rangers owner Sir David Murray has denied the club cheated during his stewardship after the Scottish Premier League appointed an independent commission to investigate alleged undisclosed payments to players.
 
Murray, in a statement, also accused the SPL of attempting to “retrospectively rewrite laws to incorporate items not previously covered”.

The commission will determine whether the club breached SPL rules in relation to Employee Benefit Trust (EBT) payments and arrangements for Rangers players between 2001 and 2010.

EBTs are benefit schemes where the employer deposits money in to a trust, which is paid out to the beneficiaries in the form of tax-free loans.  In many cases, the loans are never repaid.

Payments from an EBT should not be made on a contractual basis, as it would make them part of an employee’s salary and subject to tax and National Insurance.  Even payments, which are non-contractual, but made regularly can be deemed taxable.

HMRC claims that Rangers’ EBT scheme was a tax scam as it was contractual, and this forms the basis of the so-called “Big Tax Case”.  It also insists it has proof of this in the form of documents and emails between former directors at Rangers and players’ agents.

In 2010, HMRC issued Rangers with a bill for £35m in unpaid tax and interest, and £14m in penalties which Rangers challenged at the Court of Session in Edinburgh, but the verdict has not been announced.

BBC Scotland claims to have seen evidence, which was submitted to the courts, suggesting that 53 Rangers players and staff had side-letters giving undertakings to fund their sub-trusts with cash.  The broadcaster also claimed, in a documentary, that the biggest beneficiary from the scheme was Mr Murray himself – who allegedly received over £6 million, that included the biggest single payment of £1 million.

SFA rules state that all payments made to players in respect of their earnings from football must be declared by their club.

The SPL has already stated that there is a prima facie case to answer over EBTs and, if Rangers are guilty of breaking the rules over undeclared payments, the sanctions available include the stripping of titles, which Rangers manager Ally McCoist has already stated he would firmly oppose.

Murray sold his majority shareholding in Rangers to Craig Whyte for £1 in May 2011, before the club was forced into administration in February of this year over an unpaid tax bill accrued during Whyte’s tenure.  Failure to exit administration via a Company Voluntary Arrangement (CVA) meant the club was consigned to liquidation over the summer, before a consortium fronted by Charles Green purchased the business and assets of Rangers.

Charles Green has insisted he will fight for all of the oldco Rangers titles if they are threatened by an SPL probe.  He said: “HMRC has still to reach a decision or announce their decision.  I understand the SPL has put a panel together to look at this issue and we will contest it every inch of the way.

“The view of the club, the fans and indeed newcomers like myself is that those titles and those games were won fairly and belong to this club.  We will fight it to the finish.”

However, when asked about possible sanctions last week, Green had said: “What the majority of fans believe, in Scotland, is that Rangers may have won titles when they had a team on the field that otherwise they wouldn’t have been able to pay.”

Green himself is also under pressure to provide evidence after he claimed sanctions imposed on the Ibrox club were as a result of “bigotry”.

In his statement, Murray compared the plight of newco rangers with that of “bayoneting” a wounded soldier, and said: “The problems at Rangers have brought no credit to Scottish football and are a tragedy for the club and for all those connected with it and who support it.  They cannot be condoned and it is appropriate that there should be a proportionate penalty for the club for the events over the last year.

“However, I urge all those connected with Scottish football to bring this sad affair to a close – now.  Bayoneting the wounded is neither justified nor proportionate.

“Nevertheless, I cannot be anything other than angered at the suggestion that Rangers should be stripped of titles or other competition victories.

“This suggestion is an insult to the staff and players who achieved these successes thanks to skill, hard work and commitment and for no other reason. It is also an insult to the thousands of Rangers supporters who spent their hard-earned money to support the club they love.

“I hope that those presently in charge of Rangers show sufficient resolve when it comes to resisting this move, despite the incentives being offered to do otherwise.”

Turning to the allegations of cheating, Murray added:  “During my stewardship of Rangers no rules were breached or circumvented and I reject and resent any suggestion that anything was done which amounted to cheating.

“As was required of a PLC, all accounts were fully audited and made available to all entitled parties. All football rules were complied with. All enquiries from entitled parties or organisations were answered.

“To those who criticise certain actions undertaken on behalf of the Club, I suggest that they familiarise themselves with all relevant rules before they come to any conclusions or express any opinions.

“This is particularly relevant to the SPL rules where it would appear that there are efforts to retrospectively rewrite laws to incorporate items not previously covered.

“The SPL rules variously required disclosure of all contract of service matters and all payments from a club to a player.

“It would now appear that these are to be rewritten to incorporate non-contractual loans from independent third parties and other non-contractual matters.

“If this is the case then press comment over the past few years would appear to indicate that several clubs other than Rangers may well have fallen foul of the soon to be changed historic laws.

“It would also appear that the SPL is once again seeking to invest itself with a power of retrospective penalty beyond that prescribed in its own rules.

On the matter of EBTs, he said: “It should be noted that the tax treatment of these is an issue as yet unresolved and it is wrong to prejudge the outcome.

“It must be stressed that the tax tribunal will determine the appropriate tax treatment in respect of the arrangements operated. This is not a criminal matter and there is presently no question as to the legality of these schemes.

“Rangers agreed contracts of employment with its players (and staff). The EBT scheme involved the contribution of funds into an offshore discretionary trust managed by independent trustees. The trustees could and did make loans to individuals carrying interest with scheduled repayment dates.

“There was no contractual or beneficial entitlement to the funds on the part of any individual and the monies paid to EBTs were not “remuneration” in terms of any rules applying to the Club.

“Since 2001 when the EBT scheme was introduced, the amounts contributed were disclosed in the audited financial statements of the Club. These audited accounts were provided to the SFA and SPL as required.”

Murray added: “Rangers sought only to provide financial security for players (and staff) within the rules of law and football. To suggest that this amounted to cheating in the sporting context is an allegation which is without any foundation.”