Doubts surround Rangers' EBT defence

Chief football writer

Thursday 22 March 2012

RANGERS' defence that payments made to players via Employee Benefit Trusts were "discretionary" rather than "contractual" could be thrown out by a Scottish Premier League investigation, leaving the club open to wide-ranging punishments.

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Michael Grant

The SPL announced 17 days ago that it was investigating allegations that Rangers made payments as far back as 1998 without disclosing them to the SPL or the SFA. That would be in direct contravention of both governing bodies' rules but Hugh Adam, a former Ibrox director, has repeatedly insisted that the practice was commonplace until he left the board in 2002. The owner at the time, Sir David Murray, has denied any wrongdoing.

But Herald Sport understands that Murray's defence that the payments into EBTs were discretionary may not spare Rangers from a guilty verdict and punishment after the inquiry. The investigation is still in its early stages and is being handled by the SPL's solicitors, Harper Macleod, rather than the SPL executive. So far requests have been to Rangers' administrators, Duff & Phelps, for documents going back to 1998. Paperwork has been exchanged and the administrators have complied with all of the requests.SPL rules D9.3 and D.1.13 impose a prohibition on players "receiving payments for playing football or participating in an activity connected with football except where such payments are made in accordance with a form of contract approved by the SPL and require that all such contracts are submitted to the SPL within 14 days of being entered into".The essence of Murray and Rangers' defence is that the payments need not be covered by a routine football contract. But that is open to question and the investigation could take the view that it would be absurd to claim a player received payments, even discretionary ones, into an EBT for any reason other than "participating in an activity connected with football". The recent inquiry chaired by Lord William Nimmo Smith for the SFA completed its work in only 21 days but that covered only the nine months of Craig Whyte's ownership. The SPL inquiry covers several years' worth of alleged payments dating back 14 years, and the Harper Macleod team will be given far more time to assemble its evidence. Only when all the necessary documentation has been sourced will any attempt be made to interview the likes of Murray, Adam and other Rangers directors and players from the period covered.When Harper Macleod's findings are complete, the solicitors, along with SPL chief executive Neil Doncaster and secretary Iain Blair, will compile a report for the SPL board. The board consists of Eric Riley (Celtic), Stephen Thompson (Dundee United), Derek Weir (Motherwell), Steven Brown (St Johnstone), SPL chairman Ralph Topping and Doncaster himself. A decision will then be taken on whether the information provides prima facie evidence of any breach of SPL rules.If so, and given the seriousness of the allegations and their repercussions, the case almost certainly would be passed on to a specially-created three-man Independent Commission, probably chaired by a Law Lord. It would be the Independent Commission, rather than the SPL which would make a final ruling and also apply any possible sanctions to Rangers. Because the allegations are unprecedented for the SPL, the governing body may take legal advice before applying any punishment if Rangers are found guilty.Any potential punishments for a guilty verdict could be lessened if Rangers successfully argue that their breach of the rules was inadvertent, not willful, or was based on poor advice. The SFA has left the SPL to do carry out the investigation because it (the SFA) would be the appellant body if Rangers submit an appeal. But once the SPL investigation, and any appeal, is over the SFA could also lay its own separate charges at Rangers' door for breaking its rules by not disclosing payments.The whole process is expected to last for several weeks. Last night secretary Blair said the SPL was prepared to be patient while Harper Macleod worked with Rangers' administrators. "It is important that the investigations are being carried out by the SPL's solicitors and not directly by the SPL executive so there is a degree of independence and separation there," he said. "At the moment it would be inappropriate to make any pre-judgements on a) what the investigation might uncover or b) what decisions might then be taken about the next step in the process."What we have asked Harpers to look at for us going back over a period back to 1998. There may well be a significant amount of trawling back through old records to be done. We also have to recognise that while the administrators are absolutely working to co-operate with us they have a number of other priorities, court appearances and all the rest of it. So I think that while we want to reach a conclusion as quickly as we possibly can, it's more important that it's done thoroughly and properly rather than to any particular deadline we may apply. A deadline would become importantly only if there was any suggestion of a lack of co-operation, and there is absolutely no suggestion of that."

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Doubts surround Rangers' EBT defence

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