News broke this morning of a self-made millionaire who is set to lodge a bid for Rangers. According to early morning news reports, Craig Whyte is poised to sign a £32 million deal to buy the debt-ridden Ibrox side. He has reportedly been in talks with Sir David Murray for a number of weeks, with negotiations set to be completed by the end of the year.
An insider stated, “David Murray has always said he would only sell Rangers to someone he could trust and who could take the club forward. Craig Whyte is that man. He is a Rangers fan with the club’s best interests at heart and the financial muscle to make this deal happen. The deal is in the early negotiation stages at the moment but I understand that David Murray has met Craig Whyte and been very impressed by his vision of the way ahead.”
But talks are at an early stage, despite some of the headlines this morning, and a formal offer has yet to be made.
A statement released to the Stock Exchange read, “Craig Whyte notes the articles in today’s press regarding discussions between him and Murray International Holdings Limited with a view to him acquiring MIH’s majority shareholding in Rangers Football Club Plc. Mr Whyte confirms that he is considering making an offer for RFC and is in talks with MIH but that these are at an early stage and there can be no certainty that an offer will ultimately be made. Mr Whyte has not yet approached the board of RFC. A further statement will be made in due course.”
Rangers published their own statement which read, “The board notes the announcement released this morning on behalf of Craig Whyte. The board confirms that it has been advised by Murray International Holdings Limited that it is in early discussions with Craig Whyte regarding the acquisition of MIH’s majority shareholding in Rangers Football Club plc. The board will keep all shareholders informed of further developments.”
If the takeover is completed, the club’s debt, estimated at around £27 million would be wiped out, and an additional £5.5 million would be offered to the club’s shareholders, which Murray owns the majority of. It is also reported that Whyte would take over 75% of Sir David Murray’s shares, with his consortium partner Andrew Ellis holding the other 25% of shares.
And despite claims in the morning newspapers that manager Walter Smith would be handed a sizeable transfer kitty if the deal is concluded before the New Year. Reports in the media later published that, there will be no massive transfer kitty made available. A report by STV Sport stated that a sum of around £25 million could be made available for players over a period of five years.
Last night Rangers fans welcomed the proposed deal and claimed it was a boost their club needed. James MacMillan, secretary of the Rangers Supporters Association, said, “This is very welcome news for the supporters and the club. It’s early days yet and we’ve obviously heard things like this before, but this sounds very promising. It is something that the club needs and has needed for a while now. It’ll be great to clear the debt and start with a clean sheet. But there needs to be money spent as well, not only on the playing field but the in the infrastructure of the stadium as well.”
After four years of the club being up for sale, news of a new bidder entering the fray is welcome news to Rangers fans. However after numerous bids falling through, many Rangers fans will be waiting on Whyte signing on the dotted line before rolling out the
red blue carpet and unfurling the welcome banners.
So who is Craig Whyte?
Whyte was born and bred in Motherwell and is a Venture Capitalist, whose business interests are worth around £1 billion. At the age of 19, he managed his own hire plant firm, and by the age of 26, he was chief executive and owner of Vital Holdings plc, a group of firms involved in everything from office cleaning to heavy plant hire.
By 2000, he was living the life of luxury in Monaco, but returned to Scotland eight years later, splashing out £720,000 on Castle Grant in Moray.
What the Newspapers failed to Publicise
The tycoon fled Scotland under the shadow of a massive tax investigation. Amid a flurry of lawsuits and allegations with debts of around £4 million, Whyte moved to the tax haven of Monaco living the life of luxury, while his former employees and debtors tried to pick up the pieces back home.
He was once called, “the next Richard Branson”, and despite all the allegations, Whyte stated that he has a clear conscience.
He claimed at the time, “I don’t owe anyone any money – least of all the taxman. I know people said I was trying to run away from my problems, but I have nothing whatsoever to hide. I’m too busy getting on with my life to worry about people with an axe to grind. Yes, there were a lot of problems before I left Scotland. The Inland Revenue have not yet informed me if they have finished investigating, but as far as I am concerned, everything was sorted out before I left.”
When Whyte fled to Monaco, he left many of his companies close to collapse. In 1993 he bought Vital UK Ltd and built it up, providing services to the construction industry, retail stores and local authorities and it went into voluntary liquidation three years later with debts totalling £600,000.
A damning report by liquidators suggested that he had struck a secret deal to transfer the failing company’s assets to the Bahamas. The report also hinted that he had failed to register some of his employees for PAYE tax.
Whyte ended up at the High Court where his legal team admitted that he owed £3.5 million to a single creditor.
A spokesman for the liquidators said, ‘We have obviously tried to contact Mr Whyte on a number of occasions but we are informed by his lawyer that he is living abroad.’
A spokesman of Vital Holdings at the time, said Mr Whyte was unavailable for comment. The spokesman said he had issued a statement disputing the allegations made against him and declaring his intention to seek legal redress. He added, ‘I can’t say where Mr Whyte is at the moment, but he is speaking to his solicitors about this.’
While this was happening, some members of the 700-strong workforce from his network of companies threatened to riot over unpaid wages. And in a showdown, a number of staff staged a public protest at the company’s offices in Glasgow, with his money men forced to hand over the cash to workers on the spot.
He was also being pursued by a Glasgow woman over an unpaid industrial tribunal award.
But Whyte recalled later, “There were people who were jealous of me, and were out to get me. I was young and portrayed as successful, and rivals were envious. Everything was sorted out satisfactorily. The claim that I owed £3.5 million was a tactic by my legal team to help my case against people who were pursuing me.”
Whyte also rubbished claims that workers went unpaid, describing it as an administrative error. “It was all down to a change in the payroll system,” he says, “It was simply just a misunderstanding.”
Many of Whyte’s staff were members of the GMB Union and a union spokesman said, “It’s an absolute scandal. Our members are struggling to make ends meet, while Craig Whyte has his nose buried in the trough in Monte Carlo.”
When Whyte returned to Scotland he said, “I am debt-free and now own substantial holdings and assets in various parts of the world. There are no outstanding claims against me. I continue to hold property and assets overseas. The Inland Revenue is satisfied with my status and previous claims of debts proved completely false. I have never been declared bankrupt.”
What does the Future hold?
Well your guess is as good as mine. It could all work out well for Rangers under Whyte and Ellis. But then if there is a pattern that has emerged in the past, who says that it won’t happen again. And the potential takeover could fall flat on its face before the fans start to imagine how Whyte can spend his money on the club.
Published in Scotzine on November 18th 2010