HM Revenue and Customs have refused to accept the Company Voluntary Arrangement (CVA) proposed by would-be owner of Rangers Football Club, Charles Green. He will not but the company’s assets for £5.5 million.
HMRC’s argument is that it cannot support a CVA proposal (where ‘pence in the pound- offers are made to creditors) in cases where there is evidence of non-compliance with tax regime obligations. Given their statutory obligations, there is an undeniable logic in HMRC’s position.
They say that putting Rangers into liquidation, which is now the case, offers best protection for the taxpayer.
Liquidation of the present company does mean that the new club will be free of debt obligations. Whether the fans will see a debt free participation in Division Three as what they had in mind is another matter. But who has ever listened to the piper fans who pay the tune? Perhaps this will change.
The result of liquidation is that the current Rangers company will cease to exist and the club will be banned from participation in European Football for three years.
This of course hits the financial prospects of the club in the form of the now inevitable new company (newco) for some time, with the earning power of European matches denied it.
HMRC has made it clear that it will be going after organisations and individuals who may have been involved in aspects of the club’s alleged non-compliance.
While this decision throws the situation at Rangers into the melting pot, it certainly fires a barrage across the bows of those who felt that HMRC would back down in the face of the popular will to see Rangers survive in a form as close to its current presence in the game as possible.
It certainly sends a ‘clean up your act’ signal to the money squirrels who have brought the business management of game into disrepute and and one of of Scotland’s two premier football giants into liquidation.
So at what level will the Rangers’ newco play? Canit continue to be the SPL? Or will its eleven fellow member clubs in the SPL vote to send it to the Third division?
An SPL Board meeting takes place on Monday at Hampden but the likelihood is that the decision will be made at the July AGM.
The debate will rage around the relative merits of the health of the game as a whole – with the presecec of a competitive Rangers in the SPL guaranteeing revenue for the game in television rights; and a level playing field for all in penalties for non-compliance in sports management,
These are diametrically opposed positions. Where might a compromise be hacked out? Expect one.