Former chairman says SPL knew how Rangers' EBTs worked, and still granted licence

Sports writer

Wednesday 12 September 2012

Alistair Johnston, the former Rangers chairman, has defended the club's use of Employee Benefit Trusts and described the Scottish Premier League's investigation into player registrations at Ibrox as "a kangaroo court".

Custom byline text:

Richard Wilson

Johnston released his statement through the Rangers Supporters Trust yesterday, as the SPL's independent commission met for the first time.

The commission, chaired by Lord Nimmo Smith, was convened by the SPL because it believes Rangers have a prima facie case to answer for allegedly breaching rules in their administration of EBTs for 10 years under the ownership of Sir David Murray.

A first-tier tax tribunal is currently ruling on whether Rangers are liable for a £24m tax bill, with additional fines and penalties, for mis-administering the scheme.But Johnston says the Scottish Football Association knew the nature of the EBT scheme, and still granted Rangers a licence to play. He insists the SPL probe and commission is driven by the "vested interests" of rival clubs.His view is shared by Ibrox chief executive Charles Green, who has refused to attend the commission's hearings. Johnston has called for the SFA to halt the SPL commission."I can't sit on the sidelines and watch a miscarriage of justice," Johnston said. "The whole process has been established to satisfy a self-serving agenda in the SPL. The SFA is complicit in all of this because they have not had the courage to publicly acknowledge that they either ignored or did not really understand the well-publicised structure surrounding the relationship that Rangers FC had with certain of its players."I have been reviewing my files from around April 2011 relating to the annual routine of Rangers FC being granted a licence. Because of the publicity surrounding our club at the time, the SFA wrote to us asking for more details about the public speculation concerning our financial and tax situation. The latter obviously referenced the impact of the EBT schemes as creating a potential taxation liability. The club responded accordingly and provided details, as it had done in previous years, by declaring player salaries, bonuses, benefits, etc, but also payments made to a Remuneration Trust. "The SFA compliance officers must have known, both from the description and context of the reports, that such expenditures had some connection to player compensation. "However, without any further investigation at the time, Rangers FC received its SFA licence to compete in the 2011/2012 season. Rangers, therefore, were entitled to believe that they were not in breach of any SFA regulation requiring reporting of player compensation."Johnston took issue with accusations of financial doping by Rangers being able to sign more expensive players because they paid less tax. He feels the club's signing policy would have been no different without the EBT scheme, and instead credit facilities with the Bank of Scotland would have been increased."Our opponents maintain, illogically, that without the use of EBTs Rangers would have been unable to afford the quality of players that they fielded and thus gained an advantage over other clubs against which they competed," Johnston said. "The reality is that Sir David Murray, who was intimately involved in the architecture of these efforts to organise the business in a way to mitigate taxation which is totally legitimate and acceptable under all tenets of the law, would have signed and paid for these very same players whether or not EBT schemes were in effect."During most of the period under investigation, he as well as his company enjoyed a very mutually productive relationship with the Bank of Scotland. The Rangers Board consistently believed that if and when the debt reached a level where the bank became uncomfortable Sir David, as he did in 2004 when he underwrote a subscription for Rangers shares and thus eliminated much of the bank debt, would be able and willing to repeat this recovery effort."

Contextual targeting label:

Finance

Commenting & Moderation

We moderate all comments on HeraldScotland on either a pre-moderated or post-moderated basis. If you're a relatively new user then your comments will be reviewed before publication and if we know you well then your comments will be subject to moderation only if other users or the moderators believe you've broken the rules, which are available here.

Moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours. Please be patient if your posts are not approved instantly.

Former chairman says SPL knew how Rangers' EBTs worked, and still granted licence

Commenting & Moderation

MOST READ

SPONSORED LINKS

MOST COMMENTED