Personal statement by Dave King to Rangers supporters on the “Big Tax Case”
THIS statement is made in my capacity as a former director and shareholder of Oldco to provide supporters with the true position following the final tax ruling and to correct any false impression created by David Murray’s conflicting evidence in the Craig Whyte trial. It is unfortunate that we have already witnessed typical bouts of hysterical reporting from certain sections of the media and we should continue to ignore those responsible by boycotting their publications and outlets.
The Celtic board issued a statement agitating for a re-opening and reversal of the decisions previously made when, in fact, nothing has changed. It is disappointing that they have attempted to influence the footballing authorities to alter its historic football honours by calling on administrators and lawyers to achieve off the pitch what its teams failed to do on the pitch.
As an investor and board member during the period of the so-called benefit I can categorically assure all supporters that the Club received no benefit whatsoever. The opposite is true as the effect on the Club was wholly negative. It was charged huge sums for advice from other Murray Group entities and it bore the consequences when that advice proved inadequate. Every single player that was signed during that period would have been signed whether the Murray Group tax scheme was in place or not. The real beneficiary was the Murray Group.
All board members were aware during that period that we were often deliberately spending more than we earned and this was reported in the annual financial statements. The cash needed to fund any shortfall came from share placements, shareholder loans, and third-party bank finance. As David Murray was personally dealing with transfer expenditure, I sought assurances in a board meeting each year that he would stand behind any deficit that could not be immediately funded if he over extended in the transfer market. He gave these assurances and he honoured them until the Murray Group got into financial difficulty.
Put simply, the Murray Group tax scheme helped David Murray reduce his overall investment into Oldco while simultaneously reducing any reliance on increased third-party bank finance. The benefit went exclusively to David Murray and the Murray Group. Whether the scheme was in place or not, or whether it survived tax scrutiny or not, made no difference whatsoever to the playing squad of the Club during that period and hence had no impact on the performance on the pitch. We won all of our titles fair and square.
A good analogy of what happened at the time is the present position following regime change. As we rebuild the squad we are deliberately and transparently spending beyond our income. Once we commit to expenditure it is my job to secure the required funding. If I create a scheme (as David Murray thought he had) that reduced the amount of cash needed to support the Club then I would save on my required investment – but the Club and the player squad would be exactly the same.
For the avoidance of doubt, I am not looking at such a scheme. Given the negative consequences for the Club of such financial engineering in the past, I cannot conceive of any circumstances in which that might change. While I am Chairman, Rangers’ overspending will always be on a sustainable and robust basis and one that safeguards the future of our Club.
It is reassuring to note that the SFA promptly and correctly put out a statement confirming, against Celtic’s attempt to influence, that the final tax ruling has no impact whatsoever on the practical and legal findings already made. This is now another matter that we can finally put behind us.