The dignified fellows who cheered Craig Whyte down Edmiston Drive in May 2011 as their saviour from bank imposed austerity now hate the very thought of him.
I get that. I really do.
However I believe that they should also fear him.
Craig Whyte didn’t make any real money out of his time at Rangers.
He made several serious miscalculations which we can explore on another day.
However financial enrichment is clearly why he got involved with the stricken club in the first place.
As has been stated here previously the legal claim he has prepared, but not executed, through the Worthington Group is certainly not guaranteed to win if it ever comes to court.
Any litigation is never a sure thing and that is why there was a contingent liability in the inaugural accounts of the Rangers International Football club.
It was a line in the sand for Deloittes and they would not have signed off on them if that proviso had not been inserted.
I understand that Charles Green was not happy about this and there was some toing and froing over the matter.
Anyway Deloittes got their way and it is there in black and white in the accounts.
“29. CONTINGENT LIABILITIES (continued)
“On 28 May 2013, a further letter before claim was sent to (inter alia) The Rangers Football Club Limited and Rangers International Football Club plc on behalf of Craig Whyte, Aidan Earley and (purportedly) Sevco 5088 Limited. The Board is of the view that the claims set out in the letter before claim are entirely unsubstantiated based on legal advice received to date by the Board and the outcome of the Investigation.”
At the time this did little more than raise a few eyebrows, but its pernicious effects will likely reverberate up the marble staircase for years to come. The fact is that now no one can assess the true net asset value of RIFC/Sevco until you put a value on the contingent amount.
It might be zero it might be £20 million.
Therefore if you can’t quantify the net assets of RIFC then no financial institution will lend them anything. At least conventional business lenders will not get involved.
So well done Deloittes because they are the ones who insisted on this contingent liability in the accounts and it really is a game changer.
To put this in some kind of perspective; if I sent a Letter Before Claim to the Apple Corporation saying that they owed me one billion dollars then there is zero chance that their auditors would put that in their accounts.
So dear reader why did Deloittes insist that the Sevco 5088 go into the RIFC accounts as a contingent liability?
The other problem is the preferred payment method of the Motherwell born billionaire.
A legitimate businessman-say a Fergus McCann type-might just write a cheque for the smallest amount that makes it worth Whyte’s while to agree to go away and stay away.
However, the way in which suave billionaire would probably want to be paid- in a way that is Ticketus-proof- means that it is only a chap of dubious character who would be party to such an arrangement.
Of course there isn’t anyone in the current regime at Ibrox who would even entertain such back channel payments.
The idea of dodgy offshore accounts or large sums of cash being stuffed into holdalls and sports bags is not how proper business people attend to their affairs.
The Craig Whyte Contingent Liability problem all but rules out anyone of probity as the next saviour of the Ibrox franchise. The next knights will almost have to be people who do not care about their long term reputation.
I believe that the act of buying the Ibrox outfit would involve some deal with Craig Whyte, if only to get rid of the contingent liability and make mainstream borrowing possible.
The people at Deloittes are to be commended for insisting that this contingent liability was put in the accounts.
It did, as has I have already stated, cause problems for Graham Wallace and Philip Nash in their attempts to raise finance in the City last month.
The value of the contingent liability is simply unknowable until the possibility of legal action is taken off the table by Craig Whyte and his associates.
Moreover until a number is put on it then it is impossible for any reputable institution to lend to RIFC.
The only option now for distressed financing for Sevco is truly distressing.
The type of chaps who would be ok about paying off Craigy boy in a manner that would suit him are not the type of people who you would want to be indebted to.
Moreover I’m sure Graham Wallace would not tolerate such a situation anyway.
As has been stated and re-stated here recently, only a credit line can save RIFC/Sevco from insolvency.
So Craig Whyte still exerts influence over events at Ibrox, but not in a way that those supporters could have imagined when they cheered him into the stadium almost three years ago.