• HMRC to vote against a company voluntary arrangement
• Forcing liquidation will allow HMRC to pursue £21m debt
HM Revenue and Customs has told Rangers it will vote against a company voluntary arrangement. Charles Green, who is leading the Sevco consortium aiming to acquire the club, confirmed the news on Tuesday morning.
HMRC's no vote is enough to deal a fatal blow to the CVA proposal and Green will now push ahead with plans to buy the club's assets and form a new company.
Green said in a statement: "I am hugely disappointed by the decision of HMRC not to support the CVA proposal and that disappointment will be felt acutely by Rangers fans across the world."
HMRC, which is currently owed more than £21m, believes its decision to force liquidation will allow it to pursue individuals for the debt. A statement from the tax authority read: "A liquidation provides the best opportunity to protect taxpayers, by allowing the potential investigation and pursuit of possible claims against those responsible for the company's financial affairs in recent years.
"A CVA would restrict the scope of such action. Moreover the liquidation route does not prejudice the proposed sale of the club. This sale can take place either through a CVA or a liquidation.
"So the sale is not being undermined, it simply takes a different route. Liquidation will enable a sale of the football assets to be made to a new company, thereby ensuring that football will continue at Ibrox.
"It also means that the new company will be free from claims or litigation in a way which would not be achievable with a CVA. Rangers can make a fresh start."
Rangers' administrators, Duff and Phelps, confirmed that a "binding" sale and purchase agreement with Green would now come into effect.
In a statement, the joint-administrator Paul Clark said: "As we have always stated, administrators have a primary objective to ensure the survival of the company and in this case, this would have been achieved through a CVA.
"It was with HMRC's approval, that a proposal was placed before creditors for consideration. However, it is the commercial view that the level offered within the CVA was not enough to merit departure from their normal policy of seeking a detailed investigation via a liquidator.
"However, we have been left in no doubt by HMRC the fundamental reason for the rejection of the CVA proposal is the historical non-compliance with tax liabilities by the former owners and directors of the club."
Clark said Green's consortium will move to acquire the club's assets immediately after the formal rejection of the CVA proposal at a creditors' meeting at Ibrox on Thursday morning. "That transaction will be completed within a few days," Clark said.
Green responded to the decision by saying: "I am hugely disappointed by the decision of HMRC not to support the CVA proposal and that disappointment will be felt acutely by Rangers fans across the world.
"Frankly, I do not see what benefit will be achieved by this decision. My consortium's offer for a CVA amounted to a total of £8.5m. Now that we will have to complete the purchase via the formation of a NewCo, the purchase price and therefore the amount available to creditors will be £5.5m.
"I can understand HMRC deciding that football clubs which do not pay their taxes need to be punished, but by effectively banning Rangers from Europe for three years all that will happen is that there will be less revenue generated by the club and consequently less money paid over to the taxman.
"I am particularly saddened by the fact that this decision will mean that small shareholders will lose their shares in The Rangers Football Club plc, something which we were trying to avoid happening. We will be exploring ways for the 26,000 shareholders who have lost their shares to subscribe for shares in the new company.
"The solemn promise I can make to Rangers fans today is that this club will continue as Rangers Football Club and will continue to play at Ibrox Stadium. We will be liaising with the football authorities at the earliest opportunity to establish our position regarding the SPL.
"I, along with my investors who believe that Rangers can have a bright future, will fight tooth and nail to ensure the club recovers from this catastrophic phase in its proud history. The fans deserve better and we will work tirelessly to realise their ambitions." Read More
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