SCOTLAND'S rugby community heaved a huge sigh of relief last August when the long and bitter row over the ownership of Edinburgh's professional rugby team appeared to end. But Scotland on Sunday can reveal that the sale of the assets of the former E
dinburgh Rugby Limited, now known as Deltex Holdings Ltd, has not been completed and the transaction has all but collapsed.
As a result, Deltex Holdings has gone into administration, allegedly owing tens of thousands of pounds to a number of individuals, companies and traders in Scotland. In addition, the Scottish Rugby Union says it is owed more than £28,000 for image rights fees which it has paid to six Edinburgh players.
It has been revealed that neither the SRU nor its subsidiary company, SRU plc, but a third SRU-controlled company called The Murrayfield Experience Ltd bought some of the assets – principally the name and "goodwill" of Edinburgh Rugby – from Bob Carruthers and his partners.
Documents at Companies House show that The Murrayfield Experience Ltd's sole director is SRU chief executive Gordon McKie. In its last year of trading, 2005-06, the company made a profit before tax of £791,000 on a turnover of £2,932,000, but on April 30, 2006, its assets were transferred to Sodexho, now Prestige Scotland.
The last annual accounts were filed on July 26 last year. They stated: "It is not anticipated that The Murrayfield Experience Limited will trade in the future." Just 11 days later, The Murrayfield Experience Ltd bought the name and some of the assets of Edinburgh Rugby Ltd, which duly changed its name to Deltex Holdings so there would be no confusion with the new Edinburgh team.
The Murrayfield Experience Ltd agreed to pay a total of £250,000 at the time of the deal, even though its annual accounts showed it had no appreciable assets or employees.
Some £60,000 of the £250,000 was set aside in a trust account jointly held between Deltex and The Murrayfield Experience Ltd, specifically in order to settle outstanding claims against Deltex. Only when the remnants of that account are paid can the sale of Edinburgh Rugby Ltd's assets be considered complete, and it is understood that Deltex went into administration because the trust account money was withheld.
Scotland on Sunday was contacted by two Deltex creditors confirming that they were owed five-figure sums. They were not aware of the existence of the trust account and despite having contacted the SRU, were not told of its existence, despite its purpose being to pay outstanding claims.
A creditor, who asked to remain nameless, said: "We were sent a letter last August by the SRU which said that they had not acquired the assets – there was no mention at all of The Murrayfield Experience Ltd. We were told we should send our claim to a Nick Lewis at Warwick Media, which is one of Bob Carruthers' companies. But that company denied any liability. We feel the SRU has at least a moral duty to recompense us."
The Murrayfield Experience Ltd is also involved in image rights payments to six Edinburgh players. Last week, a mysterious website appeared on the internet featuring Mike Blair, Allan Jacobsen, Hugo Southwell, Craig Smith, Ben Meyer and Simon Webster, with details of the sums they have been paid, ranging from £2,259.62 (Smith) to £6,778.85 (Blair).
The website also contains a link to Save Scottish Rugby, which claims to be "the campaign to return the game to the clubs". The SRU said last night they did not wish to comment on the website.
The story has emerged because, last week, Scotland on Sunday revealed that the country's most capped player, Scott Murray, had taken both Deltex and the SRU to an employment tribunal. That claim will now be sisted – set aside temporarily – until the administration period is over.
The administrator of Deltex Holdings is Tim Heaselgrave of the Till Morris Partnership in Warwick, near the home of Deltex's largest creditor – "by a country mile", as one source put it – who is Bob Carruthers. Sources close to him say he took "a six-figure bath (loss]" because of his abortive attempt to run Edinburgh's pro rugby team.
Deltex administrator Heaselgrave said: "I am still gathering information and I am not in a position to make any comment at this stage." Bob Carruthers said: "On legal advice, I am making no comment."
The SRU's director of communications and public affairs, Dominic McKay, last night confirmed that The Murrayfield Experience was the SRU's former catering arm, the only "corporate entity" available to the Union last August when speed was required for the deal.
With regard to the image rights payments, McKay confirmed there was a claim against the £60,000 trust account saying: "Scottish Rugby has established the liabilities and paid members of staff concerned directly. Scottish Rugby awaits reimbursement from the established fund."
On the SRU's directions to creditors, McKay said that they had used the Warwick Media address provided by the former Edinburgh Rugby Ltd. Asked whether the SRU had a moral duty to recompense people, he said: "Scottish Rugby injected significant levels of capital into Edinburgh Rugby Ltd to enable them to meet their liabilities. We trust the administrator will look carefully into how these funds were utilised."
McKay added: "Our board and council have been and continue to be fully briefed. The Murrayfield Experience Ltd as a subsidiary of Scottish Rugby falls under our normal governance structures."
The full article contains 938 words and appears in Scotland On Sunday newspaper.
