The financial issues faced by Scottish champions Rangers worsened significantly following the announcement by an Edinburgh court regarding the club’s intention to enter administration.
In a notification to the Court of Session in Edinburgh, the Glasgow giants have submitted paperwork indicating their desire to appoint an administrator.
Rangers, who have Socceroos utility player Matt McKay on their roster, are currently anticipating the outcome of a tribunal that may lead to a financial obligation as high as $72.66 million if they lose their case against British tax authorities.
The Ibrox club was compelled to sell their star forward Nikica Jelavic to Everton in the English league on the transfer deadline day last month, seeking to boost their finances. Owner Craig Whyte remarked on February 5: “This could be the most challenging few weeks in the history of the club.”
“I wouldn’t describe this as a crisis. Not at this point. However, we are indeed navigating the most difficult period in the club’s existence.”
Rangers and their fierce Glasgow rivals Celtic are the two most successful teams in Scotland, both in terms of trophies and supporter numbers.
While entering administration can often lead to the dissolution of a business, the thought of Scottish football without Rangers is unimaginable for many, given their esteemed standing.
In recent years, the ‘Old Firm,’ with their games being the premier events in Scottish football, have distanced themselves even further from the rest of the domestic league.
Currently, Celtic holds a four-point lead over Rangers in the Scottish Premier League, with Rangers maintaining a robust 19-point advantage over third-placed Motherwell.
There has been longstanding speculation regarding Rangers’ potential entry into administration, which, if validated, would incur a 10-point penalty from the SPL, severely undermining their title aspirations for this season.
The ongoing case brought by Her Majesty’s Revenue and Customs (HMRC) revolves around the previous use of employee benefits trusts (EBTs) prior to Whyte’s takeover from Sir David Murray in May.
Whyte acquired Murray’s shares for £1 and promised to settle the club’s £18 million debt owed to Lloyds Banking Group.
However, on the transfer deadline day of last month, Whyte disclosed that his Rangers administration had borrowed over £20 million against season ticket sales.
Additionally, trading of Rangers shares was suspended in January after the club submitted unaudited financial statements.
At that time, Rangers also revealed that Whyte was “disqualified from acting as a director of Vital UK Limited in 2000 for a duration of seven years,” which led the Scottish Football Association to request “clarification” about his current status.
The announcement of the impending administration on Monday coincided with Celtic’s declaration of a pre-tax profit approximately amounting to £180,000, having reduced their debt by £2 million during the latter half of last year to reach a total of £7 million.
In contrast, struggling English second-tier club Portsmouth is facing a 10-point deduction after their declared intent to pursue administration.
This would mark the second instance in as many years that the south coast club has entered administration.
Pompey is scheduled for a winding-up hearing next week due to an unpaid tax bill and has been unable to compensate their players and staff for January.
by Buford Balony
