Rangers Owner Used Future Ticket Sales to Fund Takeover

February 22, 2012

Glasgow Rangers FC owner, Craig Whyte has admitted he used the payment for future season ticket sales from Ticketus, the company backed by Octopus Investments’ Protected EIS, to complete the takeover of the club.

Last Friday Octopus released a statement saying it is working with the administrators of Rangers FC after one of its investments, Ticketus, was caught up in the debacle.

Ticketus paid £24m for tickets over the next three seasons’ games but Rangers’ administrators revealed the money could not be traced in the club accounts.

Whyte has released another statement revealing the season ticket income was used “to complete the takeover of the club” and that he is personally in line for repayment.

According to a report in the Herald Scotland, the statement said: “The arrangement with Ticketus was originally to provide additional working capital, as had been the case previously under the old board. My corporate advisers came to me with the proposition that it was entirely possible, as well as highly beneficial, to negotiate a deal with Ticketus that would allow us to complete the takeover and maximise working capital for the club’s day-to-day business.

“The Ticketus deal was by far the best way to protect the club given the circumstances, in that they have no security over any assets. The only person at risk from the deal is me personally because I gave Ticketus personal and corporate guarantees underwriting their investment; the club and the fans are fully protected. In terms of exposure, I am personally on the line for £27.5m in guarantees and cash.”

He was also keen to defend speculation he was using the deal or the club for personal gain.

“Any suggestion that I am trying to make a fast buck or have indulged in illegal manoeuvring is clearly ludicrous.”

It is feared that if Rangers is taken over, any future season ticket sales would be unavailable to Ticketus.

Last week’s statement from Octopus said: “Ticketus is one of the many entities into which Octopus Protected EIS invests. Ticketus has purchased tickets for Glasgow Rangers games for a number of seasons in advance, as it has done for a number of years previously with the club.

“Ticketus does not lend money; Ticketus is the owner of assets – the tickets. Octopus is continuing to work with the administrators and Glasgow Rangers on this matter. We have no plans to make any further comments at this stage.”

Administrators Duff & Phelps said they are trying to recover a £24m payment or loan from Ticketus for advanced season ticket sales which appears to have disappeared from accounts.

David Whitehouse, a managing director at Duff & Phelps, said at the time it was believed the payment was made to a parent company account rather than the club’s account, and they were checking with lawyers that have worked for the firm in the past , according to the BBC.

Octopus owns the £100m company Ticketus in its £500m Protected Enterprise Investment Scheme and used to hold it in its secure VCT, although the group confirmed this investment was closed a few months ago.

Octopus’ company literature described Ticketus as “an example of a VCT qualifying company that has the characteristics that we will seek for investments. All the investments we make are into companies with lower risk business models.”

by Ismail Uddin