“The company will pay any reasonable professional (including, without limitation, legal and accounting) costs and expenses properly incurred by the employee after the date of this agreement which arise from his having to defend, or appear in any administrative, regulatory, judicial or quasi-judicial proceedings by a third party as
a result of his having been chief executive of Rangers Football Club or the company.”
There has been no end of speculation, on social media, in regard to Green’s charges. I have consistently pointed out in three previous blogs, that Rangers/RIFC will be liable for the costs of Green’s defence. Rangers will not be able to hedge their costs with an insurer. No insurance policy will indemnify against criminal charges. The writ has been served, RIFC have responded in writing to the clerks at The Court of Session that they will respond to Green’s petition, and in these circumstances I would anticipate no more than a one-day hearing, with a decision on the same day. This hearing will be listed some time next week or the following week (5-9 October or 12-15 October) prior to the preliminary hearing at Glasgow High Court on October 16.
The QC that RIFC will instruct will make the case that Green engaged in an elaborate criminal enterprise, and that the costs of his defence are an annex of this enterprise. This defence will not be compelling. Green’s defence will almost certainly be on Rangers’ dollar.
The charges against Green are now in the public domain. The writ specifies the instruction of junior and senior counsel.
Junior counsel charge circa £1350 per day, plus VAT, to attend court. A fee of £600 + VAT per hour to take meetings with clients and instructing solicitors, is the norm. Over the course of a legal year (ten months) I would expect no less than £390,000 in fees.
I have touched on senior counsel in a previous blog. £3,500 per day would be the minimum, but costs of £10,000 per day are not uncommon. Note that Green’s compromise agreement includes the term ‘without limitation.’ This will be vigorously challenged in the Court of Session as the QC acting for RIFC will do his utmost to cap costs. I do not expect this challenge to be successful. Entry level for a ‘silk’ will be £840,000 inclusive of VAT. Instruction costs of £106,000 will take the annual total to £946,000. Should Green elect to engage a silk at £10,000 per day, costs including VAT will be £2.4m per annum with instruction costs of a further £106,000 as a minimum.
Then there are the costs of the instructing solicitors. I would expect a senior partner, junior partner and paralegal as a minimum at a cost £1200 per billable hour (inc VAT). Two thousand billable hours per annum could run to £2.4m
In my considered opinion, Green’s litigation costs, per annum, will be circa £3.74m – £5.3m. This year’s season ticket receipts (after VAT) are £7.3m. Green’ costs represent between 51.2% to 72.6% of our major source of income. Supporting Rangers for the next 3-7 years will result in 51.2p to 72.6p of our blue pound going directly to Green’s defence team.
For those who believe my costs are excessive, I would advise that they don’t include any expert or other witnesses that may be called by Green’s team. The charges extend to 20 pages of narrative. Whyte’s defence runs to 100,000 pages of narrative. There could be in excess of 250 witnesses, Each defendant will be cross examined by QC acting for the other 5 defendants. The Police Scotland case runs to 1,000 prima facie documents. The proceedings are likely to be the most high-profile criminal trial held in Scotland in recent years. My upper estimate of seven years may be ambitious.
Green/Sevco Scotland is accused of conducting a fraudulent initial pubic offering by which £22m was raised. Green/Sevco Scotland is further accused of fraudulently obtaining assets, from the IPO, and from administrators Duff & Phelps, to his/Sevco Scotland’s pecuniary advantage of many millions of pounds. He/Sevco Scotland is charged with acquiring equity capital in RIFC by fraudulent means. He is also charged with engaging in a conspiracy to commit fraudulent acts and transgressions relating to the Companies Act of 2006. Issuing a prospectus, listing assets that were obtained by fraudulent means, is an offence.
Imran Ahmad will be tried in absentia. If he remains in Pakistan, or chooses to shop in Dubai or lie on a beach in The Dominican Republic, he cannot be extradited. Ahmad could visit the majority of the Gulf states, Russia and China and remain untouched.
It’s important to stress that Green only spent £2m when buying Ibrox/Auchenhowie and the brand names/crests. £3.5m was raised from creditors by Duff & Phelps. Green then sold these assets to RIFC for equity capital. He then sold this equity capital.
If convicted. the custodial sentence will, in my opinion, carry a tariff of up to 30 years (Fraud Act of 2006 permits a maximum of 10 years per offence). If the sentences were concurrent, as opposed to consecutive, a convicted defendant would be sent down for ten years.
There is also the not insignificant matter of court costs. If convicted, these may be apportioned to the defendants.
I cannot over-emphasise the impact on Rangers finances. The fate of RIFC as a going concern is predicated on the decision of a law Lord at The Court of Session.