05/04/2012 Newsnight Scotland

Tonight on Newsnight Scotland. Rangers' debts are even larger than

we thought, but despite that, the administrators are entertaining

three bids for the club. But are they really in a position to sell

Rangers to anyone? Also tonight, should the Lockerbie

prosecutor become a High Court judge?

And we'll be examining why politicians have been preparing for

the Easter break by making even more gaffes than usual.

Good evening. Well, it turns out that Rangers owe the princely sum

of �130 million - pretty small beer for, say, a major bank, but not bad

for a football club which the administrators say has three

bidders desperate to take it over. But is this scenario where there's

a beauty parade of would-be owners really the whole story? There's

been a change in language by the administrators over the last few

days. Less about an orderly exit from administration and more about

the very real possibility of liquidation. At the weekend they

referred to the toxicity of the business. Well, they weren't wrong.

Today's publication of the creditor list is a requirement of the

administration process. It tell as story of a business which appears

to owe money to just about anyone it has had dealings with. As things

stand, Rangers owe the company to which the current owner sold future

ticket income almost �27 million. The fans who coughed up cash in

advance, that's almost �8 million. Current tax liability is just over

�14 million. Adding in other unsecured liabilities that's �55

million. And crucially that figure doesn't include both ongoing tax

cases over whether Rangers avoided tax. The administrators estimate

the smaller tax bill at �4 million. What's become known as the big tax

bill at �75 million. When you add that little lot together you goat

the eye watering sum of �134 million. That's more than twice the

annual turnover of the club, nearly three times if they haven't

featured in European Commission. So apart from the tax liabilities

estimated at over �90 million, who else do Rangers owe money to? The

list is almost endless. Everything from �8,000 to the Scottish

Ambulance Service, over �1 million to Ran id Vienna, to just over �60

to a hire company. In a sign of just how much money the club's been

haemorrhaging, since going into administration in February, in a

period of six weeks to mave it took in �1 million in revenue but spent

three-and-a-half times that. So despite being in administration the

business was still spending more than it was earning, to the tune of

�2.5 million. Oh, and don't forget the advaitor fees - over �1 million.

-- administrator fees - over �1 million. The administrators are

poring over three perspective buyers but it is not clear what is

being sold and what the bidders are proposing to bite.

-- buy. Maureen Leslie is the director of

insolvency practitioners MLM Solutions with over 20 years

experience in this area. I began by asking her whether the situation

with the club is any clearer tonight. Not substantially. There's

still huge uncertainty about what the administrators can actually

sell. If they want to sell the club, they have to have Craig Whyte's

agreement to transfer or sell his shareholding. If they want to sale

the business and assets they don't require that. But as the report

makes clear, they don't have his consent at this point to any

transfer, and they are still discussing both options. It is not

clear what the bids that they've received are actually bidding for.

Whether they are bidding for the club or whether they are simply

bidding for its assets. This is a crucial point, because it is not

clear, these administrators are in a position to sell Rangers as a

going concern to anybody. That's correct, Gordon. You can see that

they themselves acknowledge that in the report they've published today.

They make quite clear that they do not have Craig Whyte's consent, or

agreement, to sell his shares to anybody. We don't know the details

of these bids that are coming in, but there is something surreal

about this. What is likely... People are talking as if there are

bids and the administrators will decide between one or the other.

One assumes these bids are all conditional on minor matters being

resolved, like what are you going to do about Craig Whyte and the

taxman? Absolutely. Any bid I would imagine is heavily caveated as to

what it is I'm bidding for, what it is I want to purchase. Until they

can resolve that issue of Craig Whyte's shareholding or his

attitude to that shareholding, they can't be clear. The liabilities, it

is interesting they've unincluded a substantial liability, that they've

recognised that there's a likelihood or a possibility that

the big tax case will go against them. That's been included in that

�135 million figure. But just to be clear, because again people are

talking about this as if this is a normal transaction where something

a up for sale, there are various bids and the administrators will

decide between them. But what we have here is administrators who it

is not clear have any right to sell anything, with bids that are

probably so heavily conditional that it is stretching credibility,

perhaps, to call in the bids in a meaningful sense? I understand your

point, but the administrators have the right to sell, they have the

right to sell the business and assets of Rangers Football Club.

They don't have the right to sell the shares without the

shareholder's consent. They have got the right to sell something,

but it is not their first preference. Their preference is to

sell the shareholding, to sell Rangers Football Club. Is it

credible that someone would want to buy this club? �130 million in debt.

You think it is still doable? sell the club? Yes. Without a CVA,

absolutely not at all. No-one would put money into funding such an

enormous debt mountain. They are looking for something a bit cleaner,

so there must be an agreed CVA I would imagine before anyone would

want to purchase the club. So given all we've been saying, is a CVA do

you think still doable? Provided �25 million is on the table and

even if the worst case scenario that they lose the big tax case it

would still give creditors about 12p in the pound which is not too

unreasonable a return to be rejected out of hand. So yes I do

think it is doable. If only �13 million is on the table perhaps

that becomes unattractive to creditors, but if HMRC win the tax

case it really does give them considerable voting power. I would

like to read something to you which is HMRC's policy on how they treat

voluntary arrangements. They refer to rejecting a voluntary

arrangement., "We are likely to reject a voluntary arrangement

where there is evidence of evasion of statutory liabilities or

payments of other creditors whilst withholding sums due to the Crown."

My understanding of HMRC's position in relation to EBTs they consider

that an evasion of your tax liabilities, so they have a stated

policy that. May lead them to reject in any case. So there would

be two issues, to be clear. One would be is 5p or 10p in the pound

good value for taxpayers? Yes. would be that these EBTs, and we

don't approve of them, and I suppose three would be the

publicity, do we want to be seen as the tax authorities to be letting a

very important Football Club away with this? Yes. It is a huge issue

for them I think. There's at least two other clubs currently in

administration, both in England. For HMRC they are going to have to

consider the message they are delivering not just to football

clubs but to other businesses that fail to pay their tax obligations.

Potentially the whole moral hazard issue of people saying, "Thank you

very much, I will take some of that 10p in the pound as well." Maureen

Leslie, thank you. Now, the man who led the

prosecution in the Lockerbie case is set to be appointed as a

Scottish High Court judge. Lord Colin Boyd was made Solicitor-

General in 1997, then promoted to Lord Advocate in 2001 He led the

Crown Office prosecution team throughout the Lockerbie trial.

It's reported today that he is to be one of a new round of judicial

appointments. Last month the SCCRC report into Lockerbie said one of

the grounds for a new Megrahi appeal was a suggestion that Colin

Boyd's prosecution team had deliberately withheld important

information from the defence team. Lord Boyd has denied the suggestion.

And at the moment, there is no live legal process in respect of the

Lockerbie conviction. I'm joined now by Steven Raeburn, editor of

legal magazine The Firm. Before we get on to Colin Boyd, for those of

us who are note in imminent take of being appointed as judges remind us

The process was revised about ten years ago. The Lord Advocate was

just appoint a judge, tap them on the shoulder and that would be that.

That was perceived to be a little bit too cosy. The arrangement was

overhauled. There's now judicial appointment board. The jobs are

advertised. Anybody who feels they have the qualifications can apply.

The applications are sifted and a recommendation is made. You have

been to be a QC, have you? You're not going to get very far unless

you're already in legal circles. The short answer to that is yes.

It's not limited to QCs. There's not a requirement, a constraint on

who may apply. The intention was to widen it from the usual coatery of

suspects. The whole point of the board was to broaden that all. Once

they've made the recommendation it goes forward to the First Minister,

who puts it forward to the Queen for approval. That's a formal

process. That's how it's done. is Colin Boyd a controversial

candidate? The short answer is yes. There's never really been a

controversial candidate since the judicial appointments board was

constituted. They have mostly been just acceptably waved through. For

the reasons that you mentioned in the report, and his stewardship of

certain cases, you mention the Pan- Am 103 case being notable for its

controversies. There was the legacy of the Chokar case which caused the

form of the double jeopardy legislation. What was his role in

that? He wasn't there at the Genesis of the problem. The

conclusion of that was that the entire prosecution process was

institutionally racist. It met to massive inquiries and soul

searching. He came in at the beginning of the Pan-Am 103 trial

and he was in tenure of the Shirley McKey affair, which led to a

further inquiry and apologise to the current Justice Minister and

the demolition of the fingerprinting apparatus and 78

recommendations to get that overhauled. So these three cases

really marked out his tenure in the role of Lord Advocate. He had

leadership of the prosecution service at that point. Where are

the murmurings coming from, is it within the legal community, if I

can call it that? There's been a lot of chatter about it since the

news was broken this morning. Yes, from within the legal community,

from all sides of the community, but also from those that are active

campaigners from the outside as well, those that have no direct

interest in who becomes a judge, but they have access to grain and

crosss to bear. To say he's controversial would be a fair

assessment. You were talking a minute ago about wide being the --

widening the list of applications, do any of the people who, all of

the people who have been suggested look like, there's a lot of people

you expect to become judges, don't they? It has been a problem that

the judicial appointments board, whilst it has done its level best

to have a transparent process instead of a gentleman's club

approach to the appointment of the Jew dishery, the actual --

judiciary, the actual cross-section of membership has not radically

changed in that time period. It may take a generation to bed in. It's

not had too long, too much of time to do it. It's only about ten years.

The roles don't come up so very often. There is an element of how

much has changed. The composition of the board, there are some lay

members, people from local Government, but there's the

sheriff's principal and senior members of the judiciary on that

board, some have close connections to local government and so on. The

composition really is not that different from the circles that the

Lord Advocate would have moved in in the old regime. Thank you.

Finally tonight, one of the happiest aspects of Easter is that

we're unlikely to hear much from politicians in the next week or so.

Not that they haven't been make a rish hash up in the run up to the

holiday break. Easter madness. Bunny rabbits

laying eggs and hiding them in the garden. That's what all about? And

politicians losing the plot. If the sybolism of Easter is baffling,

it's all about ancient fertility rites, so is the behaviour in the

party's search for credibility. They're on a kind of political egg

hunt. First the Conservatives. Trying to bat away doubts after the

Budget was monstered by the media. They're fighting to avoid the

perception of aloofness - too well off, too posh. Now possibly the

fatal charge of weakness as plans to monitor our electronic

communications and staged secret trials are tacked by coalition

partners. No wonder David Cameron's was asking for prayers this week.

Oh, I nearly forgot, there was the jerry can cock-up. David Cameron

spent time or six years trying to get rid of that posh boy image

around the schooling and the millionaires in the Cabinet, coming

together of the Budget, cutting the tax rate for those earning a great

deal of money. The donor sleaze crisis and talk of supers in

Downing Street, for �250,000 and then the fuel crisis and talk of

Gerry cans in one's garage. It just all added to that feeling of

actually same old Tories. I think in Scotland there's a shrugging of

shoulders, I'm not sure that anybody bought into the fact that

they were anything other than that any way.

Talking of happy bunnies, there was one of those in Bradford where

George Galloway, didn't he used to be a cat? Wiped the smile off Ed

Miliband's face. Instead of enjoying Tory discomfort the Labour

leader was forced onto the defensive. Galloway was the only

Easter bunny to claim his own Bradford spring. Miliband knows

he's struggling to convince voters that he has what it takes. He needs

to set out actually who he is, what he would do and why he's on the

side of ordinary working people. I think the by-election showed he has

a long way to go in terms of portraying himself as a credible

alternative Prime Ministerial figure and also said that his party

organisation message is in a bit of a mess. There is too a sense of

damned if we do, damned if we don't about the Lib Dems. Are they

clinging onto the coalition in hope that's it will all come good even

as 84,000 families in Scotland lose their tax credit. Junior coalition

partners get the became of what goes wrong. Very few of them, it's

very difficult to pull off the trick of identifying yourself with

delivering something that was good. It happened here in scoxed the

Liberal Democrats struggled to get any credit for free personal care

for the elderly or on ligs of tuition fees. The credit goes for

the big partner in the coalition pwhiel you're saddled with the mess.

The SNP, expecting to pick up all the biggest eggs until a candidate

spoiled the party with inappropriate remarks on the

internet and stole their headlines. There are too many of these

accidents now. The situation of a candidate in Labour's Lanarkshire

heart land attacking Catholic midwives in an area where they're

hoping town seat Labour, in a staging most where the Council

elections will be towards the referendum. They need to get a grip

of this stuff. Our politicians go into recess hugging their eggs and

hoping when they return the Easter madness will have melted.

madness will have melted. Tomorrow's front pages now: The

herald �134 million debt mountain looms over Rangers FC.