‘Nuclear missile’ tax bill could have ruined Rangers
RANGERS directors discussed placing the club in administration months before Craig Whyte took over, a court heard yesterday.
The Ibrox board had a meeting in March 2011 as they faced up to the possibility of being hit with a huge bill by HMRC.
The so-called ‘Big Tax Case’ – with a potential £50million bill – was yesterday described as ‘a nuclear missile’ heading towards the club.
It led to serious discussions about administration as it was claimed Rangers ‘could not contemplate’ that size of debt.
Details of the meeting emerged during Whyte’s trial at the High Court in Glasgow.
He denies a charge of fraud and a second allegation under the Companies Act in connection with his 2011 takeover.
Former Rangers finance director Donald McIntyre was in the witness box for a second day, where he was cross-examined by Donald Findlay, Whyte’s QC. Mr Findlay put it to him that Rangers’ ‘potential liability’ to HMRC was in excess of £50million.
Mr Findlay told the court: ‘A nuclear missile heading towards the club in the form of the “Big Tax Case”… like an Exocet, nothing could be done to stop it.’
Mr McIntyre replied: ‘Time will tell. Counsel told us that we had a very good chance in the case.’
Mr Findlay further described it as a ‘potentially terminal event’ for the club.
He later asked Mr McIntyre when he first learned ‘the board was discussing the possibility of administration’ for Rangers.
Mr McIntyre said he could not be ‘specific of a date’ but that the ‘subject would have cropped up’.
Whyte went on to purchase Sir David Murray’s controlling stake in the club in May 2011. Mr Findlay added it appeared the board had discussed administration ‘several months before the Whyte deal’ concluded.
The court went on to hear of a meeting of Rangers directors in March 2011, which focused on money owed to HMRC, with a
‘A potentially terminal event for the club’
number of possible scenarios for the club. One was the possibility of Rangers going into administration.
Mr Findlay suggested there appeared to be a ‘pious, pie in the sky’ approach by some on the board to any liability. He said: ‘Since Rangers could not afford to pay, the Revenue may go, “Oh well, never mind”?’
Mr McIntyre replied: ‘No, I am certainly not of that opinion.’
It was earlier claimed that Sir David had described the Whyte bid for the club as ‘the only show in town’.
Mr Findlay asked Mr McIntyre: ‘Did it become abundantly clear that Murray would do virtually anything to secure the deal with Mr Whyte?’
Mr McIntyre said: ‘I would not put it like that. I don’t think a deal would have been done under any circumstance.’
Whyte, 46, is accused of pretending to Sir David and others that ‘funds were available’ to make all stipulated payments to acquire a ‘controlling and majority stake’ in the club, including clearing an £18million bank debt and £5million for the playing squad.
The case continues.