The preliminary hearings on what has become known as the ‘Fraudco’ trial will now resume on April 19 with only three individuals currently facing indictments. No-one is prepared to name the three, but we know that Craig White and Gary Withey are two of this trial triumvirate, with Charles Green almost certainly being the third. As opposed to his Wikipedia entry, or what you have read in the red top rags, it will be interesting to note what he stated in private when he was in the company of friends.
Mr Green had an inner circle of four executives in his board. He appointed himself as Chief Executive Officer, with Malcolm Murray as Chairman and Brian Stockbridge as Financial Director. Mr Murray had what was best described as a fractious relationship with Mr Stockbridge, which was exacerbated when he was filmed by the former FD being helped from his car in a ‘tired and emotional’ state. It was a particularly low blow by Stockbridge, which was seized upon by the agitators and posted on YouTube (pun intended). The fourth member of his pulling strings quartet was Imran Ahmad who initially had the title of Capital Raising Executive. Mr Ahmad avoided any indictments, and an invitation to assist Police Scotland with their inquiries, by boarding a plane to Pakistan with indecent haste.
Unlike the career criminal and the agitating barber’s model, Mr Green had a business plan A, B. C & D. Plan A of 13 May 2012, the Absence of liabilities, was to get the Club to a position where it had no debt. Plan B was a Balanced Book of shareholders where no single shareholder held more than 10-15% of the issued equity. Plan C, for Cenkos Securities, was to liaise with this Nomad to list the equity on the LSE Alternative Investment Market. Plan D for Departure was for his planned exit with 10% of the flotation price.
With such a thoughtful plan, what could possibly go wrong? The first thing that counted against him was that by his own admission he was not a Rangers man. The Rangers supporters don’t mind if you’re stupid, corrupt or even a criminal. All of this can be forgiven if you were brought up in the mean streets of Govan, Drumchapel, Easterhouse, Castlemilk or Ruchazie and that you can recite the names of the 1972 European Cup Winners Cup team by rote. Mr Green did not contract ‘Rangersitis.‘ He and Mr Ahmad were in it for a fast buck. I often wonder if Police Scotland would be as keen to pursue Mr Green if he had spent his short playing career at Rangers as opposed to Sheffield United?
Green’s initial projections were that by the middle of July, he would have built up a balance of approximately £30m. This was predicated on a CVA being successful and the Club remaining in the SPL. Neither of these projections were realised and accordingly the initial capital raised stood at circa £11m. From the £11m,
£5.5m had been paid to Duff & Phelps for the acquisition of the trading assets, all wages had been paid in full and other running costs met.
Additional investment has been promised and ‘placing letters’ received which guaranteed a further tranche of capital, with ongoing discussions with a range of other potential investors.In relation to the value of the Club, Mr Ahmad stated that he valued Rangers at £50m ‘all day long’ given the stature of the Club, potential future success and associated business opportunities. Mr Stockbridge confirmed that a series of different financial models had been prepared to take account of the various scenarios which may be played out. Each of these would allow the Club to survive and succeed, albeit there were different recovery periods depending on each scenario.
Mr Green then read out his list of existing shareholders, the bulk of these being in the form of ‘trust funds’. Mr Green stated that it was a transgression of FSA rules for the individuals involved in these trusts to be made public. However, in satisfying the SFA, two of their representatives, which were rumoured to be Mr Ogilvie and Mr Bryson (to keep matters within the family) had signed a confidentiality agreement and subsequently been given sight of the respective individuals.
It was noted that one such trust, Blue Pitch Holdings, owned 23% of the shares. As the other investors increased, this percentage would be diluted in line with the overall aspiration to have no single shareholder with an excess of more than 15%. Mr Murray
also confirmed that there had been a proposed investment which had not been accepted on the basis that the offer had come with the proviso that the donor received 50% of the shares and two seats on the Board. A compromise had been offered – partly in recognition of the overall aspiration to have no single person with more than 15%, however this had not been accepted. Mr John Brown tabled this offer but he would not disclose the men behind the £11m that was offered.
At this point in proceedings, some clarity was sought in regard to what had actually occurred at the SPL meeting. Mr Green opened the response to this question by indicating that he had come into the process of rebuilding the Club without appreciating the level of hatred that was being directed at the Club from all directions. This was not however going to cause him to deviate from his course. He was informed by Mr Doncaster, in a telephone call, that not all was as it appeared to be apropos the public declarations by a number of the Chairmen and as such he should contact these Chairmen to apologise for the actions of the old board. Mr Murray issued the public apology but at the meeting this steer by Doncaster was evidently a sham as no SPL Club wanted Rangers to survive and not one of them was prepared to publicly state they approved of Sevco Scotland’s petition for the RFC share transfer.
Mr Green and Mr McCoist had attended the SPL meeting and had advised those present of the hypocrisy being shown by all concerned in their assertion that as a “newco”, Sevco Scotland should not be admitted to the SPL. Yet despite being a “newco”, there was an expectation that they should still be subject to penalties and other sanctions for the actions of the “oldco”. Some might suggest that a more conciliatory approach would have been better received.
To gain approval to the first division of the SFL, one offer was to accept the withdrawal of 15 titles, which was of no little concern, and additionally the SFL wanted him to split the home gate receipts with the opposition. Mr Green realized that at that time the transfer bans issue had still to be resolved and if it remained in limbo and Sevco was not registered as a member of the SFA, his new Club could not play in Scotland.
He was advised by the SFA that whilst the acquisition of Bury and subsequent use of their place in the English League had been a consideration, this was not now possible since a rules change following the Wimbledon/MK Dons scenario. However, should the SFA refuse to register the Club to play in the SFL in Scotland, Mr Green threatened that he would apply to join English Football Association at any level.
Mr McCoist, who was also present at this meeting, stated that with the ten point deduction, the loss of European football and the loss of virtually the entire first team, with no transfer income, it felt like punishment enough and a new start in in SFL3 should satisfy most reasonable men.
It was also noted that whilst Mr Green had originally offered to pay off footballing debts pre CVA refusal, this would now appear to be at odds with the stance taken by the SPL whereby he was the CEO of a ‘newco’ and therefore had no rights. Mr Green also stated that the actions of the first team players who left had cost the club a minimum of £10m. This had been as a direct result of a clause that they had inserted in their contracts in the administration process which Duff & Phelps had agreed to and could have been predicted to have cost the Club so much at the expense of the personal gain of these individuals. The role of the agents was such that they had been touting these players since the ‘clause’ had been included and there was nothing that the new board could have done to preclude this eventuality.
In regard to the Title Deeds, Mr Green confirmed that a formal application had been made to HMRC in relation to stamp duty and an application made to have these formally transferred into the name of Sevco Scotland Limited. Mr Stockbridge confirmed that “placing letters” had been received which confirmed additional investment was coming into the ‘newco’.
So how did this narrative result in proceedings at Edinburgh High Court. An inkling can be gleaned by asking why the higher bid than the one made by Sevco was not accepted by Duff & Phelps? Did Duff & Phelps fail in their fiduciary duties? Would the indictments that have been temporarily deserted pro loco et tempore be revisited in a new format by Her Majesty’s Advocate Depute?
One question that seems to have been answered is that £6.75m of the £11m that was initially raised had to be repaid. I posit that this was a short term loan of £5.5m with an arrangement fee of £1.25m. When added to the escrow account of Duff & Plelps (£3.25m) you can identify Green’s initial claim of having £11m at his disposal.
However we were led to believe that Mr Green had more investment on its way and equity was transferred to these placees. At this point there is no transparency on what was raised by Mr Ahmad, the Capital Raising Executive, by way of payment for this equity. There is also the not insignificant £10.6m black hole in the money raised at the IPO.
I am bound by reporting restrictions to form a conclusion on the alleged culpability of Mr Green. Suffice to say that if we follow the money, we won’t go far wrong.