Alastair Johnston: EBT tax scheme use is not the same as financial doping

Alastair Johnston says David Murray (pictured) had finance in place to guarantee Rangers signings without EBTs.SNS Group

Former Rangers chairman Alastair Johnston has rejected claims that the Ibrox’s club’s use of Employee Benefit Trusts was “financial doping”.

The businessman believes those who claim that Rangers gained a sporting advantage from the use of the controversial tax scheme are mistaken, insisting that former Ibrox owner David Murray would have purchased the same players in any case.

"Our opponents maintain, illogically, that without the use of EBTs Rangers would have been unable to afford the quality of players that they fielded and thus gained an advantage over other clubs against which they competed” Johnston said, in a statement released through the Rangers Supporters trust.

"The reality of the situation is that Sir David Murray, who was intimately involved in the architecture of these efforts to organise the business in a way to mitigate taxation which is totally legitimate and acceptable under all tenets of the law, would have signed and paid for these very same players whether or not EBT schemes were in effect or not.

"The only difference being one which only has a financial consequence, i.e. it would have increased Rangers' reliance on bank debt.

A tax tribunal is yet to deliver a verdict on whether the EBT scheme was tax avoidance, while the Scottish Premier League is currently investigating whether the practice was in breach of their rules.

If the SPL’s commission finds that Rangers did not act within the regulations then they could take action, with the stripping of league titles among the options available.

Johnston said that any such punishment being applied because of a belief that Rangers were guilty of “financial doping” would be wrong. He insists that the club had the financial wherewithal to fund the signings without the scheme.

"During most of the period under investigation by the upcoming SPL tribunal, he [Murray] as well as his company enjoyed a very mutually productive relationship with the Bank of Scotland,” Johnston explained.

"The Rangers board, of which I was a member, consistently believed that if and when the debt reached a level where the bank became uncomfortable, Sir David as he did in 2004 when he underwrote a subscription for Rangers shares and thus eliminated much of the bank debt, would be able and willing to repeat this recovery effort.

"Whether or not he ultimately would have done so is now irrelevant, but what is clear is that 'financial doping' is not and could never be construed as describing a situation where a club extends its credit facilities with a recognised financial institution."

The former chairman, who left the club last year, said that the sequence of events that led to Rangers going into liquidation, was solely as a result of Craig Whyte’s management of the club’s affairs.

He added: "Keep in mind, which is not always clear in the molasses of misinformation that is currently circulating, Rangers went into liquidation and suffered all the penalties and sanctions of which we are now aware, solely because of Mr Whyte's failure to pay HMRC the withholding tax that the club collected during the short term of his disgraceful proprietorship."

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