Tuesday, 17 July 2012
Scottish Corproate Financial Blackmail, again
As said at then and since, these banks were 'too big too fail.' The cost of closing them and the losses which would be incurred were deemed to great to bear, so instead £160,000,000,000 was handed to them in the way of guarantees. Half of this has now been paid back or withdrawn. The Government has also put in place legisaltion to ring-fence banks so that hopefully we do not get into the situation again of having Banks that are too big to fail.
By comparison, yesterday's vote by the Scottish Premier League is in financial terms a pittance in comparison. What is interesting though is the language used to defend the actions of Rangers Football club. The 'Newco' (Sevco) formed to takeover from Rangers wanted to stay in the Premier League and tried to hold the clubs to financial ransom - or at least make them overly aware of the consequences of not voting them a free entry. The fact that Rangers had over spent and effectively cheated for years using financial doping, the same way that RBS and HBOS has splurged on leverage, was neither here nor there.
In fact the new club, Sevco Scotland, have been at all the votes and trying hard to influence them - despite not being registered and by all rights the share that the SPL have should have been removed on the 4th of July. The clear financial implications have been spelt out, with 90% drop in prize money one of the outcomes. It is to the credit of the other clubs that they ignored this and voted to do the right thing by exiting Sevco and I hope they can deal with the consequences
It does not say much for the organisation of the Scottish game that such shenanigans are allowed, but the prospect of so much lost money tends to overide thoughts of principle - as my colleague Nick Drew often discuss on this blog. Players who have left under TUPE, improperly enacted, are even being threatened with being sued by the Newco (a very tenuous legal effort I was think) for example.
This is a sad episode, not that the story of my own team Leeds is much different south of the border, but it bodes ill for Scotland as a whole that such a sorry mess can engulf one of the Countrys best known institutions.
Finally, what for Scottish Independence? As regulars readers will know I am a big fan of this, living in London and wanting a smaller military role in the World for the the Scots going their own way makes sense, taking their mad socialism with them. But with many of their major private institutions wrecked by former Directors will this have an impact on whether the Scots people trust themselves to govern and regulate effectively under their own steam?