McCoist defends under-fire Whyte

ALLY McCOIST has expressed his support for the Rangers owner, Craig Whyte, at the end of a turbulent week for the Scottish champions.

Whyte has opened legal proceedings against the BBC in response to a documentary, aired on Thursday night, which made allegations about his business background.

Earlier in the week, two Rangers directors resigned, and a picture was painted in Edinburgh’s court of session of the latest fears for the club’s financial outlook.

“He’s been great, absolutely smashing,” said McCoist, the Rangers manager, of Whyte. “I spoke to the owner this morning as I always do and we had a good chat. We’ve got a good working relationship.”

The strength of that bond may be tested in the near future. A tribunal involving the club and Her Majesty’s Revenue and Customs (HMRC), relating to Employee Benefit Trust payments by Rangers to staff, is due to be heard next month. If Rangers lose the case they could face a bill reaching €56.25 million.

There seems little alternative to administration if Rangers come off worst in their tax battle. Whyte himself has edged ever closer to admitting such a point.

Gerald Krasner, an insolvency expert and former chairman of Leeds United, has experience of similar scenarios. “It is a fairly brutal business,” Krasner said. “Certainly, when Leeds went into administration under Ken Bates, it was local creditors, small companies and the likes of police who were the ones to lose out. The reality of administration is very painful. That said, if you come out the other end, people forget all about it.”

Whyte could, in theory, profit from such a chain of events. As Rangers’ secured creditor, he would be in a position to pick the club up directly from administration.

One financial expert, speaking anonymously, felt such a plan was “feasible”, adding: “Big, brand-name clubs [such as Rangers] will come out of administration a lot quicker than others.”

Whyte has, however, said he is doing all he can to avert administration. Nevertheless, he is in a win-win situation.

Should Rangers win the tax case, Whyte would control a business with no bank borrowing – an earlier €20.7 million debt has been shifted to his own company – and no longer a potentially ruinous tax bill.

Previous members of the Rangers board, who reacted with hostility to his buy-out of David Murray, believe Whyte’s motives at Ibrox are short term. If that is an accurate assessment, the 40-year-old would have been pretty sure he could sell Rangers on at a profit – regardless of the tribunal outcome – before agreeing to take over from Murray.

The resignations of the two directors, John Greig and John McClelland, constituted a public relations blow for Rangers. Both made it clear that they felt hampered and frustrated by Whyte’s management.

Greig is a former player perhaps most symbolic of the club. McClelland remains a respected figure in Scottish business. Both were part of an old regime that expressed concern about Whyte’s takeover in May; now, the old guard has been all but eliminated.

For now, Rangers must deal with €900,000 of their assets being frozen by two former club directors. Martin Bain, the former chief executive, was in court again yesterday pursuing an alleged breach of contract. Bain’s legal representative, Nicholas Ellis, referred to “what might be described as the parlous financial state” of Rangers.

A separate, unresolved, case between Rangers and HMRC could cost the club €4.8 million. Again the taxman has successfully ringfenced the money.

Whyte remains bullish. “I will not be distracted,” he said. “I knew when I decided to bid for Rangers that there would be pressures as well as plenty of people who would like us to fail. But despite that, and despite all the muck that is being flung at me and the club by the BBC and others, I am determined to see this through.

“I stepped up to the plate when Rangers was in serious trouble and having accepted the challenge there is no way I will be diverted now.”