Planet Football

The latest edition of Private Eye has a very well written explanation of the ongoing financial saga surrounding Rangers Football Club - which is long and detailed but  well worth the effort in the end.

I find it quite staggering that a public company can operate in this way - seemingly without repercussions - and that Rangers fans don't find a way to come together to run these people out of town.

Typical, just when you need an angry mob - they're all too busy doing something else. 

Planet Football

Rangers

It is ever harder to believe that the recent events off the pitch at the Glasgow club can be happening at a public company - even one that owns a footbal club.

Wihin days of the police arriving at doors connected to old Rangers saviour Craig Whyte, new saviour Charels Green and his adviser Imran Ahmad are out the rangers door and Green is looking to sell his shares to the brother of a man convicted of VAT fraud.

Meanwhile wyte, once disqualified from being a director, claims that he and Green were secret partners all along, together with Whyte's twice bankrupted business partner Aidan Earley.Whyte now threatens a legal claim on the 'oldco' Rangers assets acquired by the 'newco' Rangers floated last year.

Amid all this, a perhaos more important question concerns the potential pillaging of a pension fund controlled by Worthington Group, another listed company linked to Whyte and Earley. That is the same Worthington Group that is now backing threatened litigation by Whyte over the Rangers assets.

Worthington is a textile-turned-property business which was run until 2010 by Joe Dwek, well known in Manchester business circles since the 1970s. Back in the day, Worthington acquired another former listed textile business, Jerome Group, which had a large pension fund; in 2010 this had assets of just over £8 million. But again, like many similar old companies, that pension fund had a deficit of liabilities to pensioners over those assets of almost £3 million.

In 2010 both Whyte and Earley's older brother Wulstan moved on Worthington. Whyte and Aidan Earley had form for targeting struggling companies with pension fund cash. In 2002 they made moves on FII, the former Lotus shoe group. The pension trustees were so alarmed that they alerted the Companies Investigation Branch, which began making inquiries. The threat went away. FII collapsed in 2004, largely due to the pension deficit.

Regenesis Holdings (owned by Wulstan Earley) and then Whyte's company Libert Capital each built up big stakes in Worthington. Regenisis began buying in February 2010 and has 23 per cent by that August, when Liberty Capital revealed it owned 7.5 per cent. Dwek resigned from the board , which was joined by a nominee from Regenisis, Peter Townsend. 

Soon Whyte was looking to buy Rangers from Sir David Murray.That deal was completed in June 2011 with the involvement of Aidan Earley and the use of rangers' own funds, via an advanced ticket-sales deal of almost £18 million. Whyte has been ordered to repay that money to the ticket agency, Ticketus.

New Worthington chairman Anthony Cooke informed shareholders in July 2011 that the investment managers of the Jerome fund had been changed, that its low-risk bond holdings had been sold for £ million and that a 'significant portion' of the fund's £3.3 million cash was 'earmarked' for a specific investment.    

That was revealed in March 2012 to have been a far from low-risk loan to a near-bust Rangers. Somehow the pension fund trustees had agreed to effectively lend £2.95 million to Worthington shareholder Whyte. Even if this loan was to have been fully secured, it is hard to see how that was a prudent investment - especially for a pension fund that by March 2012 had a £3.9 million deficit and assets of only just under £8 million.

But at that time Whyte was desperate for funds to save Rangers, under siege from the taxman, from administration.

The £2.95 million, instead of being held to the order of the trustees, pending completion of the loan documentation, had been paid over by Rangers/Whyte's solicitors Collyer Bristow to the club before it collapsed into administration in February 2012. The money is now frozen and and the subject of litigation with the old club's liquidators and could go to pay creditors rather than pensions.

The pension fund trustees claim they acted on legal and independent advice that the proposed loan was appropriate. But who gave that advice, who the new investment managers were and who are the trustees all remain unclear.

In June 2012 Cooke, Townsend and a third director resigned, to be replaced by a photographer-turned-property man Douglas Ware and barrister David Simpson. Ware declared that he believed the Rangers loan had represented 'an attractive opportunity' for the pension fund and was in the 'best interests' of both the fund and Worthington., and that he was confident the claim to recover the money would succeed.

Such confidence is perhaps not surprising - Ware and Adian Earley go way back. They were both directors of Anglo European Holdings in 1993 and Ware was a director of FII, in which Earley and Whyte held shares, for three years before it collapsed in 2004.

Whyte and Liberty Capital sold down, if not out, of Worthington last year, but Ware and Worthington are still there to help. Worthington invested £250,000 in a brand-new Whyte venture, Law Financial, which is funding (with the help of a conditional fee agreement) the threatened legal action against Green and Ahmad.     

Law Financial was formed only on 12 March. Whyte is its only director. Meanwhile, barrister Simpson resigned this year, to be replaced by Richard Spurway, another former FII director.

Events at Rangers are serious. But the fate of almost half the Jerome pension fund should perhaps trigger their own investigation by City regulators into what has happened at Worthington, whose shares are, at just under 5p, a third of what they were last year."