Duff & Phelps deny that David Grier's role in advising Craig Whyte before, during and after his takeover last May precluded them from becoming the Court of Session-appointed administrators last February, but even a perceived conflict of interest should have been enough for them to reject the position.
Grier was a partner in the accountancy firm MCR, alongside Paul Clark and David Whitehouse, with the company bought over by Duff & Phelps late last year. The BBC Scotland programme last Wednesday night uncovered emails showing that Grier knew of a finance arrangement with the London firm, Ticketus, although he says he thought this was for working capital and that he did not learn that Whyte used the money to fund his purchase until months later.
The programme also revealed emails in which Grier was asked to backdate invoices to Ticketus, and minutes of a meeting he attended that is now at the centre of legal action that Duff & Phelps have raised against Whyte and Collyer Bristow, the legal firm he used during the takeover. One insolvency expert, who asked not to be named for professional reasons, insists that Duff & Phelps should never have taken the assignment in the first place.
"To my mind, there was never any doubt there was a conflict," the source says. "The reason being, the Institute of Chartered Accountants' rules are to do with public interest. If there is a perceived conflict of interest, that's as bad as a conflict of interest itself. This is a football club, so you know it's going to be a matter of public interest, therefore you have to be even more stringent on your conflict of interest duties.
"How can you be advising somebody on doing something and the next minute you're talking about suing the person you were advising? That's what happened here. [Grier] has got himself into a real fix now by making a public statement that he knew nothing about what the Ticketus money was being used for, then you find documentation that he was even invoicing them for his time, and he was at the meeting. That guy could be struck off, it's as serious as that. The professional rules are very stringent on this."
Grier's connection with Whyte was widely known, with Clark and Whitehouse being asked questions about it at their initial press conference last February. They also reiterated their position – that Grier's prior involvement with Whyte was not a conflict of interest – in the Creditors Report. Duff & Phelps are taking legal advice on the content of the BBC Scotland programme, while Grier is adamant that Whyte did not disclose that the money borrowed from Ticketus was used to fund the purchase of the club.
"If I was them and I'd got myself into this mess, I would stick to saying, 'I don't think there's a conflict for all the reasons we've given'," the source says. "I suppose they hope they can get the job over the line and that takes away the sting of whether there's a conflict or not: Rangers are saved, what's the problem? They could say, 'we don't believe there's a conflict, but now that one is perceived we'll do the professional thing and resign'. But I can't imagine they're going to do that."
Duff & Phelps's position could be challenged at the Court of Session either by a creditor, a director, or by the business itself, which is Whyte. Only a creditor would be likely to mount the challenge, but it is highly unusual, would require "a fairly aggressive" petition and needs "very strong grounds".
It would also be subject to the timescale of the court, and so could take weeks. However, the BBC Scotland programme could prompt concerns at the Institute of Chartered Accountants of England and Wales, who license the majority of insolvency practitioners south of the border.
"It might not come to anything unless somebody writes to their institute and says 'we believe they have got a conflict'," the source says. "But the profession has this thing about being seen to have the utmost integrity or people lose confidence and our standing, being a Chartered Accountant, counts for nothing. So they can be quite hard on you in terms of things like this."
However, David Roberts of Olswang, the lawyer who represented Bill Miller in his bid to buy Rangers, has defended Duff & Phelps, and described the situation they faced as "a firestorm".
"It's really very unfair to criticise Duff & Phelps," he said. "There is no way they are favouring Craig Whyte. No-one knew that Whyte was using the Ticketus money for the purchase price. He kept that as a closely guarded secret for months after the acquisition, as far as I could tell.
"Most of the clubs have a deal with Ticketus and the first thing you do when you buy a club is examine if you can get a forward-financing Ticketus deal to help with cash flow. David and Paul were doing a very good job."