Roscommon Child Abuse Case

Ireland has been stunned by the “Roscommon incest case”.

People have been incredulous at the details of the case.

A mother-of-six from County Roscommon was sentenced last week to seven years in prison after being convicted on ten counts of incest, sexual abuse and neglect of her children.

Because the mother was sentenced under 1908 legislation she could only receive a sentence of 7 years.

A man convicted of the same offences could face up to life imprisonment.

Circuit Court Judge Miriam Reynolds said there was room for future legislation to be drawn up to deal with the actions of the woman.

‘Had this being a case of a male person being convicted – a much longer sentence would be allowed under more recently amended legislation. A man convicted of incest can be jailed up to a maximum of a life sentence,’ she said.

The woman’s six children were aged between six and 15 when the offences took place over a six-year period at the family home.

The woman cannot be named for legal reasons.

The court was told yesterday that the six children were not fed properly, suffered from head lice and were beaten and abused on regular occasions.

The Health Service Executive said tonight it had appointed a senior manager to carry out a preliminary review of the circumstances surrounding the case.

The investigation would establish the facts and inform any further decisions, according to a spokeswoman.

‘This review has already commenced and is being carried out by a senior manager from outside the Roscommon area,’ she said.

A Garda who investigated the case has praised the bravery and determination of the six children.

Sergeant John Hynes said great credit was due to every member of the family who brought the offences to the attention of the authorities.

He said the children had been adversely affected by the trauma but were receiving counselling on an on-going basis.

Minister for Health and Children Mary Harney has said the case was probably the most appalling case of abuse that she had ever read.


The reportage of this case has been, as I opened one of incredulity.

I was interviewed on the radio show “The Right Hook” on the day the story broke.

The producers on the show contacted me and asked me to take part on the show because of my journalism on the issue of child protection and the fact that I am an ex-social worker.

When I was making some notes to guide me on this live radio interview the first two words that I jotted down on the pad was

“Groundhog day.”

That is what happens, I thought, when a serious systemic problem that everyone knows about is not tackled.

We get to re-live the same events over and over.

I was interviewed by Ivan Yeats, the former Fine Gael TD on the radio show “the Right Hook”, on the day that the Roscommon case broke.

Ivan opened the interview by stating that he was “shocked and disturbed” about the details of the case.

I told him I didn’t share his shock, because the word “shock” implies surprise.

I was not surprised at the details of the Roscommon case.

The following day in the Irish Independent child protection expert Shane Dunphy asked:

“How could professionals, who testified that they visited the home of this family twice a week — a home reportedly infested by rodents, littered with rubbish and rotting food, where children were only given dinner twice a week (perhaps on the days these social workers called) — miss what was happening right under their noses?”

That is simple Shane social workers are not professionals.

I know this because I was a social worker for over a decade.

Social workers cannot be struck off unlike a medic, a solicitor, a nurse or a teacher.

Social work does not pass any objective test of being a profession.

Out with the state structures social workers have no economic value.

There is no private practice in social work. The idea that a person would seek out a social worker and hire them to avail of their skills is, quite frankly, bizarre.

In the free market social workers have no value because no one would hire them.

Social workers are neither properly trained nor skilled at what they are supposed to do on our behalf.

There is no agreed knowledge base for what social workers do that can be verified as having any validity.

There is no social equivalent of, say, the Glasgow Coma scale the gold standard for all receiving medic s when the patient has a head injury.

What is taught on social work courses is a mishmash of feminist ideology and simplistic leftwing “explanations” of human behaviour.

My own experience as a social work student in Swansea University in 1989, as a practice teacher in Glasgow in 1995 and a social work lecturer in the University of Ulster, for an academic year in 1998, has taught me that social work courses are stuck in a mental universe that ordinary people would not recognise.

Subsequently we have people in posts that cannot fulfil the core function for which the state pays them, protecting children who are at risk.

The Irish government are well aware of these facts. I know. I told them.

I wrote to Minister Barry Andrews last year to relate my experience of the state’s state run child protection services. The letter was a two-page critique of the structural issues and systemic failures at the heart of Health Board run services there was also an implicit offer to help. After waiting two months for a reply I was informed by letter from the minister’s office that my letter would be passed to the HSE and, the minister was sure that, the contents of said letter would be very helpful.

Mary Harney has asked for a full report from the HSE on the Roscommon case.


What does she need to know?

She knows everything she needs to know about the child protection services and has done so for several years. The child protection service in this state is not fit for purpose. Roscommon is no aberration.

The children in the Roscommon case were caught in a perfect storm of incompetence, indolence and ideology.

The kids were being neglected, but no one moved to act decisively to safeguard the children. The “parent” was a female so, in the feminist mindset of social work, was “oppressed” and was therefore deserving of social work sympathy.

As a female she would not be suspected of being a sexual predator. In the social work worldview women cannot be guilty of such crimes, but clearly they can be.

There will be other Roscommon cases. There are, undoubtedly, other children currently enduring agonies and those children are known to the child protection services yet they are not removed.

It is easy to hide behind the constitutional protections of the family or complain about the intervention of pro-family religious groups.

To focus on these issues takes the public’s gaze away from social workers who resist providing a 7/24 service and instead prefer to work office hours for their own convenience.

Like Letterfrack and Goldenbridge everyone knows what the problem is, but nothing has been done heretofore.

Moreover nothing will be done because these children are less important that the interests of these well-paid public servants.

Had the Roscommon case happened in Britain then, at the very least, senior people in the social work system would pay with their jobs.

In the “Baby P” case three people from Haringey council either resigned or were sacked.

Who will resign in Roscommon?  Who will be sacked?

One definition of stupidity is doing the same thing over and over and expecting a different result.

If anyone in our government is surprised by the Roscommon case then they are not fit for purpose either.



I have not approved several comments over the past few days (one tonight specifically was out of order and has prompted this response).

If such comments were made in, say, print journalism then they would be actionable.

In 20 years of being in print I have never cost any publciation a penny in legal fees.


I would not dream of writing such defamatory statements. 

A basic rule-worth reiterating-is play the ball dont play the man.

I have no problem in approving comments that take a 180 perspective on my views.

It is heartening to see a robust debate taking place between posters-this is exactly what I had hoped for when the site was  comment enabled .

However please stick to the topic, debate the issue, and dont indulge in ad hominem attacks.

They will not be approved.






The people’s choice

This week marks the 90th anniversary of a democratic revolution that would, in time, dismember the biggest empire the world had seen since the time of the Mongols.

In the Mansion House in Dublin on the 21st of January 1919 the democratically elected representatives of the Irish people met in session.

The winners of the 1918 election in Ireland, Sinn Fein, had stated that they would not attend the British parliament in London if elected. Instead they promised to meet as a parliament for all of the people of Ireland if they were elected.  This they did.

 Of the 105 Irish constituencies 73 went to Sinn Fein. A landslide in anyone’s psephology.

28 Teachta Dala met in Dublin. Another 40 Sinn Fein TDs were either in prison or deported.  At its first meeting the Dáil issued a Declaration of Independence, declared itself the parliament of the Irish Republic and adopted a short constitution.

For those who had voted Sinn Fein and gave their allegiance to the new parliament the significance of the First Dail was clear.

The British authorities on the island now had no legal legitimacy.  That included the police-the Royal Irish Constabulary.

A group of volunteers in Tipperary took the Dail at their word.  They intercepted a cartload of gelignite en route to a local quarry at Solohead beg. Two policemen were escorting the cart. In the eyes of the volunteers the RIC no longer had any legitimacy.

The RIC men were called on to surrender, they refused and brief gunabttle ensued. The men who shot them who went onto become legends in the War of Independence including Dan Breen and Sean Treacy considered that they were acting against a force without legal authority (the RIC).

In the Michael Jordan film “Michael Collins” there is a scene to depict the rural guerrilla war where the local volunteers with Collins leading them storm an RIC barracks. As the IRA enter the burning barracks Collins announces to the coughing RIC men “You’re being relieved of your duties lads!” Collins was a minister in the provisional government. He considered that he was acting with the democratic mandate of the people of Ireland.

The creation of the First Dail was not lost on other subject peoples in other parts of Britain’s empire. That was especially true in India.

It is pleasing for me to see the event being appropriately celebrated in Dublin this week. Hopefully this means that revisionism has reached its zenith and that Irish people can start to have amore accurate view of our history, no matter how difficult and painful that history has been.












Ibrox “racist” banner criticised.

“The banner is undoubtedly racist. I think many familiar with recent events surrounding anti-Irish racism would opine that the banner is a derivation of the Famine Song’s motivations, only expressed visually as opposed to vocally.”


By Phil Mac Giolla Bhain

An ex-Republic of Ireland international and anti-racism expert has slammed the official inaction at anti-Irish racism in Scotland after the most recent stunt by supporters of Glasgow Rangers.

At the recent old firm match in Glasgow Rangers supporters unfurled a banner with a bus on it imploring that the city’s Irish community should go back to Ireland.  The banner was made by “The Blue Order” the Ibrox club’s official fan club.

Continue reading “Ibrox “racist” banner criticised.”

Murray International Holdings

By Ray McKinney.

Murray International Holdings:

It happens a couple of times every year- a headline heralding another great performance followed by a few paragraphs that cite a series of impressive statistics. It is one of the UK’s best oiled PR machines in overdrive again. Scotland’s serious newspapers, The Scotsman (Edinburgh) and The Herald (Glasgow) seem to be locked in a mortal duel to curry most favour with one of Scotland’s richest men, Sir David Murray, founder of Murray International Holdings (MIH) and owner of Rangers Football Club. While the trials and tribulations of one of Glasgow’s football giants generates much public interest, it is MIH- Scotland’s oft acclaimed ‘largest’ privately held company- from which Murray’s position of esteem was created.

While the fawning sports writer coverage of the 1990s has given way to gentle probing of his stewardship of one of Glasgow’s sporting behemoths, the business pages of Scotland’s 4th estate seem oblivious to the biggest story in Scottish business in decades. For Murray International Holdings Ltd is heading for almost certain disaster. It is time for someone to yell “iceberg, straight ahead!”, and like the eponymous Titanic, it seems that momentum and circumstances are conspiring to leave few paths for salvation for the RMS Murray. It is a road to ruin which places the future of one of Britain’s best supported football clubs in grave danger.

This would seem like a staggering claim. Sir David Murray has carefully cultivated his brand: entrepreneur; mould-breaker; friend of Sean Connery and other celebrities; vineyard owner; benefactor to several worthy causes; a brilliant visionary who sees what is coming next ; and a man of action who successfully navigates dangerous waters where lesser men would tremble. All of this might be true, and it makes it especially difficult to believe that Sir David heads a conglomerate on the brink of collapse. Yet, by every meaningful business measure, that is exactly where his business empire sits today. While English football fans have seen a trickle of famous name clubs downsize into irrelevancy, for most Scots the idea of an enfeebled Rangers FC seems incredible, and its disappearance is just unthinkable. However, the changes that will be wrought throughout society by the credit crunch and recession are only just beginning to be felt. With the sun setting on his business empire, a clear and present danger over the future of his football division exists. As a subsidiary of Murray International Holdings, the fortunes and future of The Rangers Football Club are inextricably tied to those of its parent company.


The story of David Murray’s introduction to Scottish football is the stuff of Scottish folklore. A rugby player before a horrendous car crash resulted in both legs being amputated above the knees, Murray’s football ambitions had been limited to lowly Ayr United. After his attempts at buying this minnow were spurned, his friend Graham Souness, then manager of a Rangers team which was filled with English internationalists and sweeping all aside domestically, brokered an opportunity for Murray to buy the club from Lawrence Marlborough. At a price of £6m and the assumption of another £6m in debt, Murray effectively paid £12m for Scotland’s most successful team of the 1990s.

Marquee signings such as Paul Gascoigne, and continued dominance of Scottish domestic honours, helped burnish Murray’s image as a man with the Midas touch. He could do no wrong. He was a visionary who would lead Rangers out of the parochial battles of Scottish football and to “the next level” of European success. Scotland’s sports media tripped over themselves to write even more gushing homilies to this genius. It is now widely accepted that the wheels started coming off the Murray bandwagon as Rangers’ great rival in the east end of Glasgow came roaring back to life. In the late 1990s, facing a resurgent Celtic, freshly manned with visionary leadership of its own and now providing on-the-field competition, Murray upped the ante. In a combination of bombast and high-stakes poker that would be become very familiar in the coming years, Murray signaled to Fergus McCann, his counterpart at Celtic Park, that “for every fiver they spend, I will put down a tenner “. Murray would back up this claim, laying down £12m for Tore Andre Flo and a succession of continental stars. That these high priced superstars would flop in Europe was a financial disaster, but that they allowed Celtic to halt their league championship run at nine in a row was to breathe life into a domestic league long barren of real competition.

The rest of the football story is well documented. Both sides of the Glasgow divide have passed the mantle of success back and forward with Celtic proving to be the more dominant side in the last ten years. Murray’s enthusiasm for the game has appeared to ebb and flow. Periodically starving his club of investment and then using the credit lines of MIH to try to close the gap with Celtic. No custodian would think that bouts of starvation followed by feeding from a vat of caviar would form a sensible nutrition program for children entrusted to their care, but this is how Sir David has managed Rangers FC in the last decade. His mood swings regarding Rangers betray the ‘tells’ of a gambler who knows that he is running out money. He cannot afford to double down, but he does not want to crystallize his losses- forever admitting that the venture has been a failure.

Murray has been trying to make a graceful exit from Rangers for the last 3 years. Many times he has stated that it is time to hand over the reins to someone else. That no sale has taken place should be a matter of concern to Rangers supporters. Despite Sir David’s claim of being seconds from putting pen to paper on a sale (only to ask at the last minute what the new, unnamed buyers’ plans for the club were, and for the answer to have fallen short of what he thought best for Rangers FC), Rangers do not make an attractive purchase for anyone but the best heeled of ardent fans. If you include his initial purchase price, accumulated losses, and the opportunity cost of capital (i.e. how much he could have made just leaving his money in a unit trust) the honour of being the custodian of The Rangers Football Club will have cost Murray a sum approaching £200m. Such a fact can be skimmed over when discussing such issues with Scotland’s sports media, but men of sufficient means to even get to the table to discuss a purchase will also know how to calculate the cost of ownership. Owning a Scottish Premier League club is hardly the dream of you average Middle East oil baron or a Russian oligarch, so it would seem that Rangers’ savior must come from within the ranks of their existing fans.

The story of the credit crunch is now familiar. Banks lent outrageous sums of money to people who had no means of repayment. The banks’ managers got to pocket their inflated annual bonuses without much concern as to what would happen should these loans not be repaid. As the inevitable defaults on bad home mortgages mounted, financial institutions, from prestigious investment banks to the retail savings institutions on your High Street, began to fail at an alarming rate. Those banks which survived were propped up with government loans. Public funds are being used to plug holes in balance sheets created by private profits. (It is a bizarre world when events can offend the sensibilities of the right and left of the political spectrum at the same time). The first wave of the credit crunch hit home owners hard. This next shoe to fall will be commercial loans. Companies like MIH who borrowed too much and now face mountainous repayment schedules at a time when profits- if they exist at all- will be wafer thin. It is against this background of the credit crunch and a deepening recession that we examine the accounts of Murray International Holdings Ltd. It is a story of reckless lending and irresponsible gambling supported by illusionary profits created by the legal smoke and mirrors of flexible accounting rules.

MIH: the business
Sir David Murray made his money in the metals business. This is clearly a business which Murray understands, and his survival to date in this difficult field is worthy of respect. This is a pretty simple business: buying large quantities of raw material from steel mills and cutting to size for local customers. It is a stock-on-the-shelf and distributor company in a field that generates notoriously low profit margins. It is also deathly dull. Hence a man who feels that he has achieved something in life and wants his true genius to be widely known would feel the attraction of owning what was then Scotland’s best supported and most successful football club. With his brilliance acclaimed with great regularity in the newspapers, it must have been frustrating to have to live within the financial constraints imposed by such a low-profit business as steel. While you want from the sidelines, others- lesser beings no doubt- were fast accumulating great fortunes in other businesses: the temptation to expand into the UK commercial property market at its peak will likely prove to be the undoing of Murray International Holdings.

In principle, there is nothing wrong with a business using debt in moderation. Through the wonders of the corporate tax codes, interest on debt is tax deductable- and this increases the free cash flow available to the owners of the business. Debt is often referred to as ‘leverage’ because it has a multiplier effect on shareholder value during good times. However, it also multiplies losses- and significantly increases the risk that the company will go bankrupt.

Bankruptcy most commonly results when a company has defaulted on its debt obligations- payment of interest on time and/or repayment of the principle per the agreed schedule.

A business with very stable earnings, such as an electricity utility, can afford to take on quite high debt burdens as the chances of their earnings dropping unexpectedly is quite low. More cyclical companies, such as those in the commodities business for example, need to ensure that they can always pay their bills and their banks even in their worst possible year.

In absolute terms, the growth in debt at MIH is frightening. By January 2008, Murray increased MIH’s total borrowings by a staggering 14.7 times its January 2000 number (to £773.4m from a more respectable £52.7m). In the same time period revenues grew by only 3.6 times and operating profits by only by a factor of 1.2.

Business analysts will often look at the ‘capital structure’ (the ratio of debt versus shareholder money that is funding the business) to understand the level of risk that is associated with a business. When we look at MIH’s capital structure, we do not need advanced finance qualifications to see the danger. With a debt : capital ratio of 85%, the shareholders of MIH have only £15 at risk for every £85 that the banks have at stake.

This would seem like a great way of running a business. Get the banks to take more risk than you do, but you get to keep the all of the profit after you pay back the bank. However, interest payments loom like the grim reaper over every heavily indebted business. As can be seen in Figure 1 below, MIH has gone from a manageable 50% debt : capital ratio to its current 85% level within 8 years.

 MIH Debt : Capital 

Lots of management consultants and finance professors made fortunes and reputations extolling the virtues of corporations loading up on debt. That was pre-credit crunch of course. However, even those who believed in the end of the ‘boom-bust’ business cycle would have still told you that extraordinary levels of debt could only be justified by extraordinary profits.

A closer inspection at the profitability of MIH will show that Murray’s decision to pile up debt did not even produce the minimum gains which would have been expected. Indeed, Murray would have been far better placing the borrowed money in a high yield savings account.

 Net Income / Sales

Operational Failure?

We can see that MIH is not especially ‘profitable’, but this analysis would be incomplete without discussing how other low margin businesses make their businesses make sense. Most retail businesses share MIH’s situation- selling commodity goods which buyers can purchase from any number of alternative suppliers. The best retailers- such as WalMart in the USA- understand that success in this business is not necessarily achieved in profit margin but in operational excellence. Just as debt is a ‘lever’ which multiplies profitability, asset-turnover (i.e. total assets / sales) works the same way. This involves many elements, but the ones of most interest in the case of MIH are ‘stock-turns’ and ‘Cash Conversion Cycle’. These are basically measures of how fast a business can turn the money it spends into cash received from customers. By any measure, MIH’s deterioration in performance turning costs into cash tells the story of the walk to the cliff edge for this company.

Inventory : Stock Turns

(click table above to view enlargement)

Inventory (or ‘stock’) levels have skyrocketed while the efficiency measure ‘Stock Turns’ has plummeted. This means that MIH is piling up money on its ‘shelves’. This money earns no return while it sits in inventory. Much of this inventory increase has come from Murray’s dive into the UK commercial property market which began in to show up in earnest in the 2005 accounts. £250m of the £307m inventory is attributed to development properties. Once started, MIH has to continue with construction. These developments continue to absorb cash for construction while the sale prices and rental values on which the investments would have been justified even just a year ago will look laughably naïve in today’s market.

Real Profits?

While discussing the nuances of inventory, it is worth mentioning a curious effect of accounting rules. A company which is struggling to break even can reduce its expenses booked to a given year by creating inventory: cutting steel to length regardless of whether a customer has asked for it; building offices which no one needs… expenses which would have been booked to the profit & loss account in that year are capitalized and show up as an asset instead of an expense. (When the goods are eventually sold, the expenses are then recorded). Cash is still hemorrhaging, but the company gets to make press releases about another profitable year instead of having to explain red ink to an increasingly worried bank manager or to a bewildered media. Such ‘earnings management’ practices are common amongst struggling businesses. In most cases, there is nothing illegal about it, but bankers and financial analysts should be alert to such issues.
Cash Flow:
The effect of massively increasing inventory in MIH is best explained through cash flow. While many are baffled by the many seeming contradictions of accrual accounting, everyone understands cash. It comes in. It goes out. You can count how much you have today.

MIH’s statement of cash flows tells the story of the gamble that is being played out:

Cash Flow

(click table above to view enlargement)

Cash from Operations reflects the real flow of cash resulting from the ordinary activities of the business- buying and selling metals, leasing office space, and of course from selling season tickets to football games in the south side of Glasgow.

Cash flow related to investments reflects spending which may take some time to yield a return: inventory; machinery; buildings; etc. The difference between Operations and Investment cash flows, if positive, is the free cash flow available to the owners of the business. If Free Cash Flow (plus cash on hand ) is negative, it represents a funding gap that can only be closed by selling more shares in the business or in borrowing more. Since 2000, MIH has had an accumulated Free Cash Flow of -£543.3m. This is a period which will be looked upon by economic historians as a gilded age. If you could not make money then, you will almost certainly not have survived the recession that followed. To lose such vast sums in an age of plenty, and to have gambled on UK property at the peak of the market, does not bode well for the future.

Debt Repayment Schedule:
MIH had to pay £55.8m in bank interest on its bank debt in the year up to 31 January 2008. Indeed, Sir David has had to borrow the money to meet MIH’s interest payments in six of the nine years between 2000-2008.  (It is akin to putting your American Express bill on your VISA card).  For a company bleeding cash, meeting such interest payments would be tough enough.  However, the vultures who circle those who are ailing in the financial desert will be taking to the air upon realizing the debt repayment schedule which Sir David Murray faces.
In the coming year (to January 2010) MIH is scheduled to repay or refinance £406.9m to its creditors.  In the current financial climate banks are not taking on high risk debt (or refinancing it) without a commensurate level of compensation in the form of interest and guarantees.  If Sir David survives this recession, he may find that he owns a lot less of MIH than he did before it started.

When a business is successful, it will often generate profits beyond that which need to be reinvested in the business. These excess profits will begin to accumulate and it is in the shareholders’ best interests that this excess money be returned to them in some fashion- often as dividends. There is nothing wrong with a profitable business paying a dividend to its shareholders. It may seem surprising given the condition of MIH’s financial health that David Murray has continued to pay himself (and all shareholders) a dividend while having to borrow the money from the bank to do so. Since 2000, the Murray family have received £34.4m in dividends from MIH despite the fact that the company has had an aggregate negative free cash flow during that time. All of these dividends can be said to have come directly from bank financing. That HBOS has not imposed covenants to prevent their money going to a non-value added activity (i.e. dividends do nothing to help repay their loans) seems surprising. The bank’s faith in Sir David Murray, the man, must exceed their concern over the company’s stated finances.

Factors Affecting Survival:
Sir David Murray’s reputation as a successful businessman and much of his personal fortune is at stake. His fate is to a large extent out of his own hands now. There are several exogenous factors which will drive events:
Lloyds-TSB attitude to high risk debt: With over £730m of loans at state- secured against assets such as Ibrox Stadium and MIH’s property and steel inventory, the bank could be forced to acknowledge write-downs of £300-400m. If, as seems likely, that MIH is but one of many over-leveraged companies struggling to stay afloat in a sea of bank debt, the banks may prefer to delay avoid or at least delay foreclosures. Their own balance sheet worries may make keeping MIH, and others like them, on life support in the hope of a quick economic recovery and getting repaid in full. To start taking write downs on commercial bad debt may trigger another wave of bank failures.
Steel Prices: Global steel prices went on a roller-coaster ride during 2008. Starting the year at a reasonably stable historical price of about $630/tonne, leaping to $1100/tonne in July, and then collapsing back to $630 (and still falling) by year end, such dramatic price changes make life almost impossible for a steel stockist like MIH. Firstly MIH had been winding down steel raw materials inventory in previous year, so it will be unlikely that the company was able to exploit the price leap by selling off the shelf materials at the elevated prices of July. MIH will more likely have been paying the higher price for raw materials and getting squeezed by end users who would have been fighting price increases tooth and nail. How Murray played this commodities bubble will have been very important to the longevity of his business. While it is theoretically possible to have traded this market perfectly and to have made a small fortune in the process, many more will have- like home buyers in a rising market and fearing that if they don’t buy soon, they might never get in- bought as much inventory as possible for fear that it will cost much more later. Without any statement from Sir David as to how he played this market, we can only guess as to how this will have affected MIH. However, what is certain is that companies with inventory on their books purchased at or close to the peak will not be able to sell it at a profit today. The outlook for steel stockists is further darkened by the drop in thermal coal and iron ore prices in recent months, and the fact that the global steel industry is operating well below capacity. This means that the cost of steel may remain low for several more months. In the meantime, to raise cash stockists will have to sell inventory at a loss (based upon LIFO- Last In First Out accounting). This would represent the reversal of the benefit MIH will have seen while building inventory. Now, many stockists will be liquidating inventory at a loss to raise cash to survive. If the various government stimulus packages across the world do indeed generate enough steel demand to lift prices again by mid-2009, then there is some hope for Murray’s steel business.
UK Commercial Property:
However, prospects for UK commercial property are not good in anything like the timeframe Murray needs. Working only with MIH’s public record financial reports, we do not know what the margins that MIH was hoping to achieve on its property investments, but it also seems likely that MIH would have to recognize losses on these investments to generate any life giving cashflow. Actually recording a loss may remove the tissue behind which the bankers have been able to hide their embarrassment at allowing this situation to reach this state.

What Would Happen To Rangers?
In the event of an insolvency filing by MIH, the administrator appointed will have as his principal duty recovering as much value for the creditors (i.e. the bank)as possible. British insolvency cases tend to move quickly, and those subsidiaries for which a willing buyer cannot be quickly found will be liquidated. Collapsing commodity prices are not just affecting Sir David Murray, but billionaires found themselves to be mere millionaires in a matter of a couple of months in the autumn of 2008. This is no time for executive toys. Fortunes have to be remade and energies focused in areas with a reasonable chance of making a healthy profit. That Sir David has spent so prolifigately at Rangers, yet failed to achieve proportionate success or profitability does not make this an attractive business. That Murray has become a lightning rod for many of the frustrations of a fan base who feel that he has betrayed their club’s “traditions” will not help. Indeed, taking on the figurehead role of a club once famously described as a “permanent embarrassment and an occasional disgrace” will be unlikely to whet the appetite of many of Scotland’s wealthiest people. In the event of an MIH bankruptcy, if a credible buyer does not come forward quickly- with an offer that would pick up a sizeable part of the £26m in bank debt and other debt obligations assigned to Rangers FC, then the closure of one of Scotland’s most famous institutions cannot be eliminated as a possibility.

It is unlikely to come to that. Given how little money would be raised in a liquidation (Rangers’ stadium being worth almost nothing to anyone except Rangers), the bank might accept a very low figure for the club. Glasgow City Council might help a prospective consortium of buyers by purchasing the stadium and leasing back the ground to the club- thereby releasing funds to operate the club at least in the medium term.

Whatever happens, it is a cautionary tale for football fans everywhere. When the media, sports and business alike, fail to fulfill their watchdog role, then problems are left to turn into a cancer. There are many questions that must be asked about how Sir David Murray’s hubris and gambling instincts have been allowed to place so many vested interests, not merely in football, in major jeopardy.

Click any of the following table to view in full size (opens in separate window)

Table 1

Table 1

Table 1

The fall of the house of Murray

So far no one has made a movie of the life of Sir David Murray.

I can’t think why as there is certainly enough dramatic material.

The story arch is all there and the character bio is engaging.

The young businessman who triumphed despite the appalling personal tragedy of the loss of both legs in 1976, following a serious car crash after a Rugby match.

The loss of his wife Louise in 1992 due to cancer.

In this movie there are also strong supporting roles for good character actors.

With broody tough guy Souness and the genial white haired Walter Smith all good strong dramatic roles.

There is even a cast of thousands.

The extras should never be the story of a movie it should be about the central characters.

Braveheart was never about the FCA lads at the Curragh dressed up for the day as Highlanders it was about the Wallace.

However, in Murray’s story it is the extras that are the real story.

It isn’t like that in the real movies.

Steven Spielberg would have none of that.

How would you shoot the battle scenes from “Saving Private Ryan” if the US Rangers started to behave like Glasgow Rangers?

Heading for Omaha beach they suddenly start a drunken barney among themselves in the Landing craft.

What would Cecil B De Mille do if the Israelites, instead fleeing out of Egypt on que, decided instead to use the pyramids as a public urinal while singing the “Billy Boys”?

It is the extras in the David Murray biopic that have been the cause of his greatest misfortune.

In the movie of his life Sir David Murray has wanted to write the script and direct the action. In that he is no different to any businessman who has made it to the top.

Like most powerful men in the western world in the last 50 years he has known the need for control over the media.

He lives a rock star lifestyle, but instead of being known for number one hits he is, instead known for being the owner of Rangers Football Club.

He made an alliance with Rangers supporters.

He will now know the extent to which he is riding a tiger.

As Rangers chased a record equalling ninth championship in a row Murray attracted investment from ENIC when they bought a 25% stake in their club for £40m in 1997.

Having lost out on a record breaking ten in a row Murray decided that domestic dominance wasn’t enough. He would make Rangers a force in Europe and the ENIC money would be part of bank rolling that assault on the champions league.

The man to lead Rangers into Europe would be Dick Advocaat.

Murray believed in “the little general” and indulged him.

It looked, initially, that Murray and his Dutch coach would usher in a generation of domestic  hegemony and build serious European credibility.

Like the economic miracle that Murray has been part of since the 1980s there was no secret formula. It was actually a global overdraft.

The Rangers portion of that credit line was used up by the Dutchman’s buying binge.

Advocaat was, essentially, allowed to bankrupt Rangers in his treble winning first season of 1998-99, the Dutchman cost Murray a £32m gross spend on players.

For a single season it was a British record.

This was the period of fawning journalism. Many recall James Traynor’s hilarious dinner date piece where Murray held court as the captivated Daily Record journalist informed his readers about what was on the menu as he dined with the Rangers owner.  Apart from Traynor’s complete lack of journalistic objectivity was Murray’s hubris following Celtic’s title win stopping the tenth consecutive league win for Rangers.

“Neither am I willing to stand aside and allow another club to overtake Rangers. The failure of last season hurt me a lot and that pain was something I didn’t need nor want.

“It is also a pain which I never want to suffer again, but by God that sort of thing just makes me even more determined to succeed. I am still as driven, still as enthusiastic and I will welcome the challenge of anyone out there.”

This drooling journalism has, inevitably, spawned its own dedicated website (

As Rangers spiral towards administration no doubt a would be more appropriate.

With a venal media in competition to conjure up the next best compliment to Murray and his business acumen the Rangers support were also on message.

The traditional party tunes of Ulster Loyalism were still allowed within Ibrox. Every home game the streets around Ibrox stadium the words of “the Billy Boys” were clearly audible.

The media, with very few exceptions, didn’t question Murray’s business model for Rangers or the behaviour of the fans.

All was well in the world.

The new millennium should have belonged to Murray and Rangers.

That was in the script and the funding for the next epic production was in place.

Like an out of control movie director the little Dutchman continued to spend like well like it wasn’t his money.

Tore Andre Flo for £12m was the zenith of the lunacy.

Advocaat spent like a shoplaholic with a no limits credit card.

The problem is that he wasn’t spending Murray’s money.

The Scottish entrepreneur was merely a middleman between the Dutchman and the bank.

Murray loved Dick and the bank loved David.

It had to end in tears.

Ranger’s debts spiralled and the club has never fully recovered.

There were warnings from within, but Murray does seem to have listened.

His business model for Rangers and so it seems Murray International Holdings (MIH) was to borrow, speculate and gamble that the only direction for economy was up.

In 2002 Hugh Adam who had resigned from Rangers in 2000 went public with his concerns for the club he had served for decades.

Adam knew, commercially speaking, where the bodies were buried.

He wrote a piece for the Scotsman, which was published on 14 July 2002.

The sub editor didn’t have to think too hard for an appropriate title.

“Murray in over head” was damning and, more to the point, unanswerable.

“I have read the eulogies to David Murray over this past week with amusement and bemusement, for they owe little to the facts. Far from being the master in the market, as he has been portrayed, in purely business terms Rangers fared badly during David’s 14 years as chairman of the club.

Exactly how else can losses of £80million over the past five years – despite almost £60million of outside investment in that time – be explained? If you are one of the media sources grateful to David for always being available on the phone and giving quotable ‘lines’, it would seem these can be dismissed as an unfortunate by-product of a necessary outlay to achieve unparalleled success; or the nine-in-a-row years, if you prefer. I beg to differ.”

Adam stated up front that he had parted from Rangers on bad terms worth Murray and that, obviously, coloured his judgement of the Rangers owner.

However, it didn’t mean that his analysis for Murray the businessman and Rangers financial future didn’t have some veracity.

“We endured strained relations throughout our time working together because I never depended on him for my income and so could be an independent voice in what was otherwise a one-party state. David tends to only appoint toadies and didn’t like the fact I was not prepared to be one.”

This is one of his weaknesses as an executive. Another is the fact that he is simply not an astute businessman. Rather, he is an impresario, a showman, what might be termed a buyer and seller, this extending even as far as the manner in which he has sold himself and his club through a willing media. No football club chairman in the history of the Scottish game has found his name in the papers above more sympathetic articles than David. Even when the tales being told amount to bad news stories.

Perhaps because he was afforded such impunity he too often had little interest in balance sheets, preferring to splash out recklessly because this appealed to his sense of showmanship. Long-term effects were not considered and the upshot of this is that the new chairman will have to find a way of reducing expenditure to below income in order that debts can be serviced. In his resignation statement last week David practically confessed he did not possess the guile to do this, claiming that the penny-pinching now required was not his style.
This is one of his weaknesses as an executive. Another is the fact that he is simply not an astute businessman. Rather, he is an impresario, a showman, what might be termed a buyer and seller, this extending even as far as the manner in which he has sold himself and his club through a willing media. No football club chairman in the history of the Scottish game has found his name in the papers above more sympathetic articles than David. Even when the tales being told amount to bad news stories.
Perhaps because he was afforded such impunity he too often had little interest in balance sheets, preferring to splash out recklessly because this appealed to his sense of showmanship. Long-term effects were not considered and the upshot of this is that the new chairman will have to find a way of reducing expenditure to below income in order that debts can be serviced. In his resignation statement last week David practically confessed he did not possess the guile to do this, claiming that the penny-pinching now required was not his style.”

None of this needs any spin or embellishments.

Adam worked closely with Murray-as closely as anyone at Rangers on the business side.

Quite simply the man described by Adam was no businessman more of a riverboat gambler.

By 2004 the club’s debt stood at £82m.

Only Graham Speirs, chief Sports writer of the Herald, now of the Times, broke ranks in Scotland and wrote about the impending financial disaster that Murray was taking Rangers into.

Speirs also wrote about the “bigotry issue” which, Speirs claimed, was much worse at Rangers than it was at Celtic.

In happier times Speirs spent time on Murray’s holiday home in jersey where the entrepreneur stated that:

“I’d love it to become a kind of dynasty thing. I’d love one of my boys to take over from me at some stage and drive the club on. I think that would be really satisfying, to have that family association with Rangers.”

That was in 1998 as he marked his decade in control of Rangers.

Now, of course, Rangers are in control of him.

Murray, stung by criticism from some brave souls in the media like Speirs about the debt problem at Rangers, moved more flags on maps in his bunkers. Another share issue that raised £51.5m, of which £50m came from Murray’s own businesses.

In reality Murray merely moved the Rangers debt into MIH’s accounts proper.

Unlike Fergus McCann’s share issue, which financed the building of a new stadium, the £1.5 million of new money generated for Rangers was a humiliating failure for Murray.

Failure is something that Sir David Murray isn’t used to.

From 2005 onwards the emotional contract that Murray had with the Ibrox faithful came under increasing strain.

He had promised explicitly to deliver on-field success. He had also, implicitly, pandered to the darker emotions of the club’s support.

The orange away strip, the world was told, was in recognition of the Dutch manager and the large contingent of Dutch stars in the team.

No one was fooled.

Another away top looked suspiciously like an England top.

All the while the traditional songs of settler supremacy in Ireland and empire Loyalism were belted out with impunity.

The first time I saw a different Murray was when he squirmed as he was, for a change, asked tough questions by a journalist.

Screened in February 2005 Murray was interrogated about the singing of the Billy Boys.

He didn’t know it then, but Murray had UEFA censure, the Manchester riots and the PR disaster of the Famine Song all in front of him.

All delivered by the unruly extras on his epic, a production that was so over budget there was no longer a budget.

Since 2006 the extras have been looking on as the stars in the production have failed to provide on field success and their repertoires of songs, old and new, could end them in court on criminal charges.

Not surprisingly, and never a pretty bunch to start with, the hard-line Rangers fans are now revolting.

Their racist outpourings on message boards and on the streets of Manchester makes Rangers even less attractive to any potential buyer.

Like a bad tempered movie mogul on his favourite project,the movie that will be his legacy, Murray is going through managers like so many underperforming script writers.

As I write this there has been a new development in the Scottish media.

The first green shoots of a widespread criticism of Murray.

The once timid hack pack, perhaps sensing that Murray’s power maybe on the wane feel somewhat safer to tell Murray’s customers what everyone in the Scottish media have known for some time.

The emperor has no money.

He promised to the Rangers supporters that he would deliver on-field success.

The reality is that Murray’s Rangers last won the Scottish Premier League in 2005.

His team currently trail rivals Celtic by five points and the Rangers first team squad is being auctioned off to meet bank payments that are due before the summer.

I will soon post an article, exclusive to this site, by a financial expert in the USA who has been examining the accounts of Murray International Holdings (MIH) at my request.
Ray McKinney is President of Chemera Consulting LLC (Philadelphia, PA).  He holds a B.Eng (hons) in Mechanical Engineering from the University of Strathclyde, and an MBA from Columbia Business School in New York.
An experienced turnaround manager, his expertise is in corporate restructuring.

In short he is an excellent person to analyse the current commercial and financial health of any company.

Ray is quite unequivocal that, technically speaking, MIH (and Rangers) are insolvent. Murray’s companies owe more than they are worth.

The Rangers owner has borrowed massively against assets, including Ibrox stadium that have been grossly over-valued.

Ironically it is the esteem, which Murray has been held in Scotland for being the owner of Rangers and the man with the Midas touch that has allowed him to construct the scenario, which had led his empire to the brink of ruin.

Until recently most scriptwriters would have tacked the Murray story as a feel good uplifting triumph of the human spirit.

Now the only way a producer would give the Murray story the time of day now would be as the story of a man with too much pride who fell in with a bad crowd.