My Guess is HMRC will continue to appeal. For a – The Scottish Football Monitor

My Guess is HMRC will continue to appeal. For a …

Comment on It Takes Two to Tangle by Barcabhoy.

My Guess is HMRC will continue to appeal. For a number of reasons.

Firstly , they have aleady invested signicant resource into this case . So far without getting the return they feel they are due.

Secondly , It is clear from the language used by their legal team, they feel not only was the Murray Group use of EBT’s illegal , it was accompanied by flagrant misrepresentation and deception

Thirdly, this appears to be a key case where a positive outcome for HMRC will in all probability result in significant amounts of collectable tax from business’ using similar schemes

Fourthly, and this one may be highly significant from a tactical perspective. MIH are in their death throws. Murray said so in his last annual report. MIH are not able , as has been widely reported, to fund the defecit in their staff pension fund. MIH based on this are unlikely to be around to pay for a legal defence.

MIH , as admitted by Murray, will cease to trade in the not too distant future. The normal course of events would be to appoint an administrator. However the way MIH is being run down smacks entirely of doing everything to avoid an administrator and then liquidator being appointed. MIH have lost £390 million in the last 4 years alone. Lloyds have converted close to £300 million of debt to utterly worthless equity. My guess is trade creditors, who only amounted to £4 million at last look, will be paid in full and a deal will be done with the bank in yet another inexplicable debt for equity swap, which will result in no other creditors and no justification for an administration.

MIH has the feel of a business that is desperately keen to avoid anyone having a look under the bonnet. The bank seem to be complicit in this , they may have as many reasons to keep the real picture from being investigated.

The question is would they be brazen enough to use even more taxpayers money to continue to prop up this charade.

As a seperate matter, there should be an independent investigation into the actions of Lloyds equity injections into MIH

Barcabhoy Also Commented

It Takes Two to Tangle
StevieBC says:
July 7, 2014 at 6:14 pm


I saw it. A nothing announcement from a business irrelevance .

It Takes Two to Tangle
Apologies in advance. This is long, but it sets out to show in detail how the SFA did not act on numerous red flags when dealing with Sevco Scotland.

I think its worth reminding the blog about matters i first wrote about on RTC and also in the early days on here. Others have commented also on a number of related issues, however I hear that the relevance is still significant, and the influence has not gone away.

Lets start with Chan Fook Meng (CFM) He was in charge of Orlit, who issued a winding up order served on Rangers. This was over disputed invoices totaling £400,000 . These invoices appeared to be a fee for services provided in raising funds. The winding up order never crystalised and the matter appeared to have been settled without recourse to the courts.

CFM had a connection to Charles Green, through Nova Enterprises. Green was Chairman in the company reported to be “owned” by CFM. Brian Stockbridge was also reported to have a connection to CFM when Orlit was known as Tembusu Investments.

The London Evening Standard reported in May 2011 , before any of this would be of interest to Scottish Football, that Rafat Rizvi was previously Chairman and CEO of Tembusu when it was listed on AIM.

This should have been red flag #1 for the Scottish Football authorities. A clear link between Green and a man on Interpol’s most wanted list

Another interesting fact about Tembusu is that the Chairman prior to Rizvi was Jonathan Rowland, who’s father David “Spotty” Rowland was the finance provider behind David Duff and James Gray’s disastrous ownership of Hibs. Rowland owned 30% of Hibs when Duff & Gray had control. The very real fear for Hibs fans was that Rowland was reputed to be happy to sell the assets and allow a merger with Wallace Mercers Hearts. Tom Farmer stepped in and that piece of madness was avoided.

That was Red Flag #2 for the Scottish Football authorities.

The Nomad at Tembusu resigned when Rizvi was found guilty of defrauding an Indonesian bank of $600 million. They resigned because although Rizvi quit his roles he was replaced by his wife and the Nomad believed Rizvi was still controlling the business. The new Nomad was Allenby Capital, which was founded by Imran Ahmad, with Brian Stockbridge on board at Allenby as well.

This is red flag #3 for the Scottish Football Authorities. There are now clear links between Rizvi and Green, Stockbridge and Ahmad, and between Rizvi and the guy who had been a significant shareholder and provider of finance to those responsible for Hibs darkest hour.

Next we have the intervention of Charlotte Fakes

The emails leaked by Charlotte Fakes seemed to show that initial funding for Sevco came from Rizvi.

View post on

View post on

Red flag #4 for the Scottish Football authorities

Next we have proof of the closest link possible between Chan Fook Meng and Rizvi. This link is through a trust called the Bunny Foundation Trust. This trust has been set up to benefit Rizvi’s family. Rizvi is the Settlor ( he puts the money in) and Chan Fook Meng is the Protector ( he ensures the trustees act as directed) .

When setting up this type of arrangement you really need a Protector in whom you have 100% trust . The Protector can make or break any or all plans if he goes rogue. When you have this level of trust then you have someone who could front anything for you, especially if there was very good reason why you would want to remain out of sight.

So now we have Red Flag #5 for the Scottish Football authorities.

Rangers supporters have been failed by Regan & Co with regards to ensuring Rangers , after a period of extreme trauma, would be in the hands of credible , untainted and honest owners who would play by the rules. After the behavior of David Murray and Craig Whyte the very least they were owed was an ownership group who wouldn’t deceive , rule break, cheat and tax evade. They were also entitled to expect owners who would’t risk further trauma by helping themselves to what should have been important working capital.

The Scottish Football authorities may have extended a helping hand with regards to the LNS scope of enquiry and the issuing of a Euro Licence, but they showed they were weak and ineffectual or disinterested in the matter of who was “fit and proper” as owners of a very important Scottish Club.

A recent interview with Mazan Houssami had Houssami claiming that he was the sole shareholder in Blue Pitch Holdings. He claimed never to have met Green, which must make anyone of an enquiring mind , ie not Regan, wonder how on earth he became aware of the investment opportunity. Remember Blue Pitch were in prior to the Aim IPO, so this was a private placing at that stage. Houssami has no connection to UK business’ of which we or companies house are aware.

It may or may not be true that Houssami never met Green, however if a Lebanese lawyer is the only shareholder in a company who own part of a company in Glasgow, it does not necessarily follow that he is the ultimate beneficiary.

Lawyers and clients are able to count on client privilege which keeps their dealings secret. It is entirely feasible, and not uncommon, for a Lawyer in some jurisdictions to have a contract to act for a client , under client instructions with all benefits and entitlements passing to the client, even though the lawyer is the sole shareholder.

Quite frankly i have a huge problem believing a Beirut Lawyer who never met Green is the ultimate beneficiary of Blue Pitch Holdings shareholding. Everything points to Rizvi, who has provable connections to Green , Ahmad and Stockbridge, as still pulling the strings. More than probably using his close friend and trust Protector Chan Fook Meng

Red Flag #6

This brings us to the Easdale’s. Now if I was a respectable Beirut Lawyer , with a genuine investment using my own money, who wanted someone to act as proxy , then i would use a respectable Scottish Lawyer or Accountant. What i wouldn’t do is hand that proxy to a local West of Scotland businessman, especially one who had spent time in jail for financial fraud.

Someone of an enquiring mind , again not Regan and certainly not Ogilvie, might question under what circumstances a Beirut Lawyer would even know a Greenock bus operator . Or in fact if they actually had never met.

Here is where logic takes me with this.

Blue Pitch and Margarita are ultimately beneficial to and controlled by Rizvi & associates through Chan Fook Meng having appointed Houssami as the investment vehicle. He wants someone on the ground who won’t be phased by threats from supporters or enquiries from the media. Green was fine, but he is getting off the scene having let his mouth run away once too often.

Rizvi / Chan Fook Meng gets Green to recommend someone for the role of Proxy who won’t ask too many questions and can see the “good side” of someone convicted of financial fraud.

Green has the very people. He had previously met the Easdale’s when he was looking for committed funding to support the IPO. He knew their background and their personalty and character , and deemed them perfectly fit for purpose . There is every possibility the Easdale’s have never met or spoken to Rizvi or Chan Fook Meng, in fact I think it extremely unlikely they have . All that was required was an agreement with Houssami.

We now have Red Flag #7 Any more and we would have the audience for a military parade day in Beijing.

Laxey have appeared on the scene as opportunist value investors. Nothing wrong with that. It is precisely what they are charged to do by those who’s money they manage, including their own. They get their way by installing a credible and honest CEO in Wallace, however the damage has already been done contractually by previous executives.

Nothing can happen moving forward without the agreement of BPH and Margarita . It appears to me to be checkmate. Either pay Rizvi , if indeed my logic is correct, and you can then unwind the contracts draining the lifeblood out of the club or accept the fact that they will, even with new equity raised, continue to get an incredible yield on the initial investment.

A forced insolvency event would be incredibly risky all round. And then there is the possibly tenuous , and possibly not , connection to the guy who saw Hibs as a property play.

Which of these red flags have the SFA investigated, any of them ? What answers have they received, and now that all these connections have been pointed out, as we know they monitor TSFM, and i suspect occasionally respond under nom de plume , will they ask the questions they haven’t already asked .

It Takes Two to Tangle
There is an interesting example of why English Football is an immoral basket case in a news story from today.

Lyle Taylor is reported to be signing for Scunthorpe after rejecting an approach from Partick Thistle.

Scunthorpe play in the 3rd tier of English Football . Thistle in the top tier of Scottish Football. The normal response is that SPFL top tier clubs (Celtic aside) can’t compete with even tier 3 teams from England.

That is wrong. What is correct is that English clubs continue to spend recklessly , with wages often outstripping total turnover.

Let me provide the financials to compare Scunthorpe with Thistle.

In the last 4 years Thistle have made a small profit each season. Unfortunately Thistle do not publish their turnover or wages figure ( as an aside i would criticise them for that) . However it’s clear Thistle are a well run club who live within their means. I would estimate their turnover at somewhere slightly north of £3 million as an SPL club , and as they make a profit each year then its clear they probably have a wages / turnover ratio of around or under 60%

Scunthorpe do publish turnover and wages data, however thats the only area you can give them any credit for.

Turnover in the last published accounts was £2.4 million . Wages were £3.02 million . The club lost £1.5 million last year and has lost over £3.5 million in the last 2 years. It has negative retained reserves and is only “solvent ” on the balance sheet thanks to the valuation attached to their stadium. ( Readers of this blog will be well aware of how that scenario usually ends)

In Summary Scunthorpe are a very small club who are spending vastly more than they earn. They are in a precarious financial situation, yet they still continue to outbid well run and solvent Scottish Clubs .

Scunthorpe are by no means unique in the lower tiers in England, in fact they are just doing what almost every other club does. They gamble that they can get a promotion, and bring themselves close to terminal decline in the process.

English football club owners collectively have to be one of the stupidest group of people on the planet.

Recent Comments by Barcabhoy

To Comply or not to Comply ?
A further point on Club 1872’s motives 

It’s logical. Although highly inappropriate for a CIC

King wants to avoid even having to make an offer , and lodging the £11M .
King wants to get to a position where he already has enough shareholders committed to reject, that 50% needed for the offer to go unconditional is impossible .
Club 1872 are the only option for that to happen 
He has effectively turned Club 1872 into his lackey
Takeover Panel might though react by including Club 1872 in the Concert Party , which would be the end of them
Although picking on a CIC much harder than taking on a known rogue like King

To Comply or not to Comply ?
As others have pointed out , it would be a significant risk for Club 1872 to buy out Blue Pitch , The Easdales and Margarita

Having borrowed significantly to do that , they would then immediately be diluted in the subsequent share issue as there would be no funds left to subscribe for the shares they were entitled to purchase

Why would they want to do that when King is under court order to buy out Blue Pitch and Co . 

In my view Kings number one priority is ensuring that the 50% acceptance level isn’t achieved . That;s his priority, it can’t possibly be Club 1872’s priority, no matter how craven and beholding they are to King

 Club 1872 have asked for permission from members to take up their entitlement and more in the rights issue. Having gone public with that it’s inconceivable that they would use that permission , if awarded, to take a completely different course of action by buying out existing shareholders 

I suspect the FCA would be all over that , and  their response to John Clarke  suggests they are already keeping a watching brief. Bear in mind the FCA are the enforcement body for The Takeover Panel, who are clearly determined to hold King fully to account 

Final point , given the hostility between King and the Easdales, I suspect they won’t do him anynfavours atball. If they sell ,and that appears likely, then i’m sure they’ll want Kings cash unless they got a better offer from Club 1872

To Comply or not to Comply ?
Is Dave King trying to gerrymander his way out of having to make an unconditional offer of 20p as ruled by the Takeover Panel

Right now he has to make an offer conditional on acceptances taking his concert party holding over 50%

Here’s how he might be able to prevent the offer turning unconditional, at which point he has to buy all the shares of those wishing to sell.

Thoughts on Club 1872 borrowing money to buy shares in a new share issue


I don’t know how accurate the story is that Club 1872  is going to take out a £2 Million loan

What i do know is that King does not want to pay for any shares as ordered by the Takeover Panel . Therefore it’s reasonable to believe he will look at any scheme to get round that issue.


Can Club 1872 ( A CIC )  borrow money ?
I believe they are able to , see guidance notes highlighted

 . A lender can take a charge on the equity they own in Rangers 

Companies and CICs can give a ‘floating charge’ that applies to assets, which fluctuate e.g., stock or debtors.

The floating charge hangs like a net above the assets charged. At the moment the charge is triggered or ‘crystallises’, the net drops and covers all the charged assets at that moment.

The floating charge is only triggered when certain conditions set out in the terms of the charge, or loan facility under which the charge was given take effect. 

There are currently 81.4 Million shares issued . Let’s assume the issue Club 1872 want to buy into  ( The Rights Issue) is also at 20p to avoid a conflict with the TOP .

Although there is doubt whether a rights issue is possible before Kings forced offer . However for this purpose lets assume it’s possible . Hirsute Pursuit might be able to clarify

Pricing shares at  20p and raising £6M in new shares = 30 Million new shares issued, making a new total of 111.4 Million issued shares 
If Club 1872 spend £3M on 15 Million shares they’ll own a total of 23.73 Million shares which is 21.29 % of the total issued equity 

If the total issue is 30M new shares and  If King and the 3 Bears are allowed to maintain their current %

( and there is debate over whether they can invest at all before satisfying the Takeover Panel )

then they could convert loans to 12 M shares . Between them and Club 1872 that would account for 27M of the 30M new shares. 
That would only require £600,000 to be raised by non connected shareholders 

The result would be that King , the 3 Bears and Club 1872 would control over 55% between them . That might bring a problem with @TakeoverPanel , as Kings previous statements on Club 1872 could be construed that Club 1872 should also be in the Concert Party 

Right now , on current equity ownership, if the following accept an offer from King of 20p then that’s enough to get over the 50% line and trigger the unconditional offer . 
Blue Pitch
If River and Mercantile accept as well then it will be well over at 55%
However if a rights issue predates the Mandatory, and it plays out the way i’ve suggested it could ,  then it’s not enough for Easdale, Blue Pitch , Margarita and River & Mercantile to sell. The 50% won’t be reached . There will need to be others and given most of them are fans with small shareholdings that may not happen 

So by having a rights issue before the Mandatory offer stipulated by the Takeover Panel , 

only offering new shares to those he knows won’t sell in the TOP offer , 
King can potentially avoid the 50% being breached .

Of course King could just deposit £11M in a UK account and proceed with the Mandatory offer instructed by the Takeover Panel & see how that plays out then have a rights issue to fund Gerrards requirements
That would seem to be straightforward for a guy who bragged about throwing in £50 M of his own money . 
However he’s had months to do that and has done absolutely nothing to date
I can’t imagine the Takeover Panel will be satisfied with a manipulated offer designed to fail

To Comply or not to Comply ?

I refer you to my questions 2 pages back . I’m still waiting for answers

To Comply or not to Comply ?

Do you believe that Rangers lied to the SFA , with regards to side letters attached to contracts with players who were EBT beneficiaries?

Do you believe that Rangers deliberately deceived the SFA and SPL with regards to the above 

Do you believe that Rangers received a sporting advantage because of their use of EBT’s 

SSL Certificates