Resolution Statement – 13746-17 Whyte v Daily Record
Summary of complaint
1. Craig Whyte complained to the Independent Press Standards Organisation that the Daily Record breached Clause 1 (Accuracy) of the Editors’ Code of Practice in an article headlined “Feet under the desk office, a swift £18m”, published on 7 June 2017. The article was also published online in substantively the same format, headlined “Exclusive: Document reveals Craig Whyte pocketed £18m on day of Rangers takeover”, published on 7 June 2017.
2. The article reported that the complainant had purchased the Rangers Football Club (Rangers) for £1 and claimed that his “personal balance sheet rocketed before his feet were even under the desk”. It reported that the complainant “immediately pocketed £18million on the day of the Ranger’s takeover”, and that the assignation agreement signed by the complainant on behalf of his company Wavetower Limited, the bank, and Rangers, had demonstrated this. The article included an excerpt of the assignation agreement and sought to explain its contents.
3. The article reported that at the time that the complainant had purchased Rangers, it was in £18million worth of debt, owed to the bank. It claimed that the complainant had used £18million of Rangers’ money, raised from future season ticket income which had been mortgaged to a ticket firm, to buy its own debt and repay it to the bank in full. The debt was assigned to Wavetower Limited for consideration of £18million; this meant that Rangers’ debt was not cleared but rather transferred from the bank to Wavetower Limited. The article reported that the “floating charge” held by the bank was also transferred to the complainant, meaning that he became Rangers’ major secured creditor. It reported that Wavetower Limited was now owed £18million by Rangers, including interest of £962.29, charged by the complainant for the first day of the debt.
4. The article reported that Rangers had gone into administration since the time that the complainant had purchased it. It reported that the assignation of Rangers’ debt to Wavetower Limited was not illegal; however, it claimed that this added credence to the theory that the complainant’s intention was always to “plunge Rangers into administration”.
5. The article referred to Rangers as the complainant’s “cash cow” and included an image which listed other profits which he had allegedly gained following the purchase of Rangers. It was reported that the complainant had reneged on his pledge to pay Rangers’ outstanding tax bill of £2.8million; that the complainant had sold shares held by Rangers in another football club worth £244,000, and deposited the money in an account that only he had control of, “not Rangers”; and that another company, owned by the complainant, owned shares in Rangers, which meant that he could become a consultant on a salary of £60,000 per month. The word “ker-ching” appeared next to each claim.
6. The complainant said that he did not receive any funds from the purchase of Rangers, or a salary whilst he was its director. He said that the headlines and the article gave the misleading impression that he personally profited, or gained assets, from the purchase of Rangers and that it was inaccurate to describe it as his “cash cow”. He said that the inclusion of the word “ker-ching” next to the claims had sought to strengthen this impression. The complainant also expressed concern that the newspaper did not contact him for his comment prior to publication.
7. The complainant said that he did not receive £18million from his purchase of Rangers. He said that Rangers had entered into a transaction with the ticket firm to sell season tickets in advance, and had used this money to repay Rangers’ debt directly to the bank. The complainant said that Wavetower Limited’s involvement in the transaction was merely as a guarantor over Rangers’ obligations to the ticket firm, and that Rangers did not owe Wavetower Limited £18million. The complainant said that the debt could not have been assigned to Wavetower Limited as the debt had been repaid by Rangers and no longer existed; only the security – which did not capture any funds – had been assigned to Wavetower Limited. The complainant noted that the assignation agreement was a loan and said that his net worth could not have increased as a result of taking out a loan.
8. The complainant said that he did not charge Rangers any interest, and that no such fees were received by Wavetower Limited. He said that the £962.29 related to the amount due to the bank, and not to himself or any of his companies.
9. The complainant said that he did not renege on a pledge to pay a £2.8million tax bill. He said that there was no specified time limit on paying the bill, and that it was under appeal at the date of Rangers’ administration. The complainant provided a copy of the Share Purchase Agreement between Wavetower Limited and another company owned by the complainant, which sought to demonstrate this. He noted that the bill was received by Rangers’ previous owner, and that it was not a personal obligation.
10. The complainant said that the article gave the misleading impression that the proceeds from the sales of the shares that Rangers held in another football club had been deposited in his personal bank account. He said that the account was under Rangers’ name and ownership, and under his control only in his capacity as director of Rangers, as per normal corporate procedures and company law.
11. The newspaper did not accept that there had been a breach of the Code, and said that the article was an accurate report of the assignation agreement. It said that it was not misleading to refer to Rangers as the complainant’s “cash cow”, given that the basis for this claim was made clear within the article.
12. The newspaper said that it was not inaccurate to report that the complainant had "pocketed" £18million on the date that he purchased Rangers. It said that Rangers had repaid its debt owed to the bank, via Wavetower Limited, which was in turn granted a floating charge over Rangers to the sum of £18million. Rangers had an £18million liability to Wavetower Limited. The newspaper said that as the complainant was the sole shareholder in Wavetower Limited, he effectively became an £18million creditor of Rangers, increasing his net worth by £18million. It said that this sum was not an “actual” monetary gain - the £18million debt was transferred to Wavetower Limited and was now owed to the complainant.
13. The newspaper said that the assignation agreement listed the consideration of the debt as £18,000,962.29, which was the security plus one day’s interest, to which the floating charge related to. It said that this amount transferred as debt which was owed to the complainant by Rangers, and that this was an asset on the complainant’s “personal balance sheet”.
14. The newspaper said that Wavetower Limited was seeking to recover debt amounting to £18,000,962.29 from Rangers’ liquidators. It said that this supported its position that Rangers owed Wavetower Limited this amount, and that the complainant had an £18million asset. The newspaper provided a copy of a court judgment which demonstrated this. The complainant said that this claim was not pursued while he was a director of or shareholder in Wavetower Limited. He said that in any event, if the claim had succeeded, the money would have been due to the ticket firm under the guarantees.
15. The newspaper said that the complainant had been issued a tax bill of £2.8million six years ago which to date, has not been paid by himself or Rangers. It said that, as such, it was not inaccurate to report that the complainant had reneged on this pledge. The newspaper also said that the article did not state or imply that the complainant received a £60,000 salary from Rangers, but reported that this was a possibility.
16. The newspaper said that the proceeds from the sale of the shares held by Rangers, in another football club, were placed in a stockbroker client account which only the complainant had the authority to transfer funds out of, not Rangers. The newspaper provided an excerpt of an email from the stockbroker to the complainant, which it claimed had demonstrated that the complainant assumed personal control of the financial dealings of Rangers.
Relevant Code Provisions
17. Clause 1 (Accuracy)
i) The Press must take care not to publish inaccurate, misleading or distorted information or images, including headlines not supported by the text.
ii) A significant inaccuracy, misleading statement or distortion must be corrected, promptly and with due prominence, and — where appropriate — an apology published. In cases involving IPSO, due prominence should be as required by the regulator.
iii) A fair opportunity to reply to significant inaccuracies should be given, when reasonably called for.
iv) The Press, while free to editorialise and campaign, must distinguish clearly between comment, conjecture and fact.
18. The complaint was not resolved through direct correspondence between the parties. IPSO therefore began an investigation into the matter.
19. During the investigative process, the newspaper offered to publish the following clarification on page 2 of the newspaper, and as a footnote to the online article:
Following our coverage on June 7 about the takeover of Rangers by Craig Whyte’s company, Wavetower, Craig Whyte contacted IPSO and has asked us to clarify a number of matters: namely that he never received £18m at any time, he did not renege on a tax bill of £2.8 million because it was under appeal at the date of Ranger’s administration, he did not personally benefit from the sale of the Arsenal shares and he did not receive a fee of £60,000 per month.
20. The complainant said that this would resolve the matter to his satisfaction.
21. As the complaint was successfully mediated, the Complaints Committee did not make a determination as to whether there had been any breach of the Code.
Date complaint received: 09/06/2017
Date complaint concluded by IPSO: 22/11/2017