SAFC are making the headlines for all the wrong reasons. Again. This time in the form of their CEO, Martin Bain.
Last week, the Daily Record front page covering the Craig Whyte fraud trial, declared:
Former Rangers executive Martin Bain got £360,000 bonus ‘for selling club to Craig Whyte’
So what do we know about the perma-tanned, former part time model, Martin Bain?
What’s his history? What was his involvement in this seedy affair? Was he complicit in any criminal conspiracy at Rangers? And are there any repercussions for his current role at Sunderland?
To answer these questions, we have to travel back in time to 1996 when Bain joined Rangers.
In 2006, Bain was the subject of (unfounded) bung allegations in a French newspaper which claimed that he had used £150,000 deposited in his Monaco bank account by a Serbian football agent to buy a £300,000 holiday home near Cannes.
More significantly, he was also CEO at the time that Rangers were using Employee Benefit Trusts (EBTs) to give players tax free loans. Whilst giving Rangers an unfair advantage when they were winning trophies, the EBTs were ultimately disastrous for the club.
Basically the EBT scheme allowed highly-paid staff to get money in loans from an offshore trust based in a tax haven, instead of getting it PAYE with 50 per cent income tax. The loans were never paid back.
We know Bain benefitted from this EBT scheme. Documents revealed by a Channel 4 documentary revealed that he was offered a £100,000 bonus from the trust for the year ending 30th June 2005. Just one month later in July 2005 in another document, Bain requests a further loan of £100,000 “as soon as possible for the purposes of investment”.
By May 2011, The Murray Group (who owned Rangers) were desperate to offload the Scottish giant to avoid the huge and growing liabilities that had occurred on Bain’s watch including the looming tax case challenging the use of EBTs.
Enter the Whyte knight in shining armour to buy Rangers. But what do we know about Craig Whyte?
Disclaimer – the background on Craig Whyte comes from my Glaswegian brother in law. The fact he’s a Celtic supporter whose business was left considerably out of pocket by Whyte’s company not paying their debts has definitely not clouded his judgement.
“Whyte is a c**t!
He had a business model. Buy in to a failing company; liquidate via administrators (always same one); sink the company; screw the creditors.
For example, he set up a hire business called Vital Plant which then became part of a holding company Vital Holdings. Familiar story. Went bust owing everyone including the tax man. He also wasn’t paying the security company staff National Insurance so they had no protection or redundancy when Whyte did a runner to Monaco.
He had massive debts everywhere and the revenue and VAT man were all after him. He was barred from being a director and his ban was either still in place or just up when he bought Rangers.”
So these were the impeccable credentials of the man that was seeking to buy Rangers.
As CEO, it was Bain’s responsibility to carry out due diligence on any prospective buyers. When asked at Whyte’s fraud trial if “due diligence” was carried out, former Rangers director Mike McGill admitted the club’s board did “very limited” investigations into Craig Whyte before his takeover.
Not only did Bain do very limited due diligence, he also received £360k on completion of the sale as highlighted by the Daily Record.
This raises questions about Bain’s honesty in my opinion. Was he complicit in the alleged fraudulent takeover of Rangers? Why did he receive £360k to ensure that the sale went through?
If he wasn’t dishonest, he was certainly incompetent in my opinion. It’s hard to believe that Bain didn’t know about Whyte’s background. “Everybody did” according to my completely unbiased brother in law, an impeccable source.
So Craig Whyte bought Rangers for the princely sum of £1 in May 2011. Things then quickly fell apart.
In February 2012, Whyte put the club into administration and much to the hilarity of the Green and White half of Glasgow, he sold his controlling interest in Rangers for £2 to a consortium led by Charles Green! (Come in Agents Green and Whyte).
Green offered creditors a settlement in an attempt to exit administration but this was rejected by the biggest creditor, HMRC and the club was placed in liquidation. The fall-out is well documented. The new Rangers were humiliatingly forced to re-apply to play in the Scottish Third Division and the club lost their EBT tax case to the HMRC incurring huge liabilities. Worst of all, they were eventually lumbered with Mike Ashley as owner.
He arrived at Sunderland in July 16 taking over from Margaret Byrne who resigned from her £636k post over her handling of the Adam Johnson abuse case (receiving a huge pay-off in the process).
There’s some striking parallels to Rangers. A club in financial trouble. A club that has tried to live beyond it’s means for several years. And a club with an owner desperate to sell.
Is this why Short brought Bain in? Because of his record with Rangers?
We will be watching with interest Bain’s efforts to attract a buyer for Sunderland in the summer.
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