The Artful Dodger

Photograph by Paul Botes
Stuart Cosgrove
on Dave King and the curious world of fine art.

Every football fan in Scotland knows about Dave King and the controversial role he occupies as the latest saviour of Rangers. But what about his role in modern and contemporary art? It’s a timely question as King makes his case to meet the SFA’s “fit and proper” person criteria.

King snatched control of Rangers from a beleaguered and discredited board at an EGM last month and now awaits a ruling by The Scottish Football Association before he can finally be installed as Rangers chairman. It is a notoriously tense question, the Court of Session has already cleared King’s application to become a club director; the South African Tax authorities have said that King has now settled his affairs with them, and the Scottish red-top press, exhausted with the minutiae of Ranger’s ownership scandals seem to want Rangers “back where they belong”. But there are others – even among the ranks of Rangers fans who are less sure.

None of this is good news for the SFA’s Stewart Regan who has to square King’s past with the SFA’s rule book and you can already sense a compromising fudge. The near certain outcome is that the embattled ranks of the Scottish football authorities will try to dodge yet another bullet.

And to think of all this started with German expressionism and Dave King’s love-affair with contemporary art?

Back in 1990, when King’s hometown Glasgow was celebrating its status as European City of Culture indigenous South African art was seeing an unprecedented rise in interest and value. Driving the frenzied interest was a German-born South African called Irma Stern, who had been a very young member of the German ‘Die Brucke’ movement before emigrating to Cape Town, where she led a global fashion for South African art in the post-apartheid era.

Whatever reservations many Scottish football fans have about Dave King’s suitability as a club chairman, his associations with the work of Irma Stern is at the very least fascinating. Stern is an artist of towering significance in South Africa, whose Zanzibar-period paintings are among the finest in modern African art. In 2011, the auction house Bonhams sold one of her most powerful works, a portrait simply called ‘Arab Priest’ for over £3m.

None of this was in splendid isolation either. Investing in modern art had become a common mechanism for wealth preservation and at the outer edges, for tax evasion. Suspicion had begun to grow around art collections held in private ownership in the 1980s but when Manhattan art dealer Larry ‘Go-Go’ Gagosian was trapped in a major tax scandal predicated on sales of some of the most valuable American modernist, Lichtenstein, Rothko and Jeff Koons the issue or art and tax resonated around the world. Gagosian’s client list helped the frenzy. Tennis legend John McEnroe, comedy actor Steve Martin and advertising magnate Charles Saatchi were all on his client list. But for the more arcane, the case hinged partly on the illegal practice of avoiding sales tax by having paintings delivered to an out-of-state business address.

The connection between art and tax-evasion grew momentum in the global economy. By the time Dave King’s tax investigations got under way, he was already a prominent collector of indigenous South African art and his formidable personal wealth helped propel a generation of local artists into the global art market. Beyond Irma Stern, King had shown interest in others, among them landscape master Jacob Hendrik Pierneef, the urban portrait artist Gerard Sekoto, and the Gauguin-inspired Alexis Preller. He had quietly built up a collection of paintings by other emergent talents including abstract artist Otto Klar and landscape painter David Botha. Neither came close to Irma Stern but they were collectable and hugely profitable investments.
But it was a love of art that was to be Dave King’s undoing.

On a Sunday morning in 2001 a dogged South African tax inspector called Charlie Cripps was at home having breakfast and flipping through a weekend magazine when he stumbled on a story about Dave King’s interest in Irma Stern. He read with interest that the prominent businessman had recently bid R1.76m for an Irma Stern painting from her much appreciated Zanzibar period of which a great Stern painting ‘Bahora Girl’ remains an outstanding classic.

By sheer coincidence, King had only just returned his annual tax papers declaring an income of only Rand 60,000 a year. Cripps rightly wondered how a man earning such a modest annual income could afford such a valued work of art. He recommended that the South African Revenue Services (SARS) investigate King and his network of successful out-sourcing businesses and what they discovered was a highly sophisticated series of trusts registered in tax havens around the world, many of which were named after Scottish landmarks. For years to come their focus turned on Ben Nevis Holdings, a company owned by King’s Glencoe Trust, arguing that King owed tax arrears of a staggering R2.7 billion.

It was a brutal dispute which inevitably the tax man won. SARS put a worldwide preservation order on King’s assets, which obtained through the Serious Fraud Office in the UK. In 2011, a South African High Court Judge Brian Southwood said that the court was:

“unanimous in finding that he (King) is a mendacious witness whose evidence should not be accepted on any issue unless it is supported by documents and other objective evidence. It was remarkable that King showed no sign of embarrassment or any emotion when he conceded that he had lied to the (SARS) commissioner in a number of his income tax returns. In our assessment, he is a glib and shameless liar.”

It was not his finest moment although to be fair he was not entirely humiliated either. King won a simultaneous case against SARS who were also pursuing the value of his outsourcing businesses. His liquidity may have been seriously compromised but the capital value of his companies has grown again.

Fine art plays a painterly role throughout the King saga. He was eventually forced by the revenue services to sell his wine estates in Quoin Rock near the Simonsberg Mountains and a home which hosted the best of King’s art including treasured Irma Sterns.

When the SFA comb through the documentation King has sent them to justify his “fit and proper” status fine art will not be high on their list of concerns nor will much be said about King’s current financial worth. They will look for any shred of endorsement, any third-party recommendation and any document that lends support to a decision that seems all but inevitable. King has vowed to invest £30m in Rangers once he is cleared to join the board as chairman and it will be a brave administrator that blocks his path. But the partisan noise that always surrounds Scottish football has once again put the authorities in a forum where they cannot win.

Scottish football is world class at shrugging tough decisions. One opportunity has already bolted. The beautiful game desperately needs to review the rules of foreign ownership, distant wealth and obscure trusts. There are rules on “fit and proper” persons, which will decide on Dave King; rules on “dual ownership and influence” which have surfaced in the case of Sports Direct’s Mike Ashley who has interests in both Newcastle and Rangers. But there is now precious little space for meaningful rules on foreign ownership. Hearts were brought to their knees by a Lithuanian speculator; Motherwell’s new owner Les Hutchison although paving the way to benign community ownership is nonetheless a Barbados tax-exile, Celtics’ main shareholder Dermot Desmond is based in Ireland, where he played a prominent role in the low tax tiger economy, and the collapse of Rangers was precipitated in turn by reckless trusts secreted away in tax havens, and then variously by the brazen evasiveness of a Monaco-based shyster, followed by passing but unrealised interest from an American Tow Truck tycoon, Singaporean business cartels and a series of obscure off-shore investment trusts, which journalists liked to describe as “institutional investors”. It has been a catastrophic mess temporarily welcomed by far too many people.

The clock will not turn back nor is there leadership that would even contemplate it. Neither the national association nor the embattled bosses of the Scottish Professional Football League will stand strong or even review the rules that restrict entry to distant wealth, particularly in an era where there is such a craven jealousy of the nearby English Premiership, and its carpetbaggers, charisma-billionaires and casino finance.

It looks increasingly likely that Dave King will be welcomed with near open arms, not because of his sophisticated taste in South African art – which seems genuine and time-honoured – nor because of his fascination with Irma Stern’s ‘Zanzibar period’, but because he comes with a passport stamped with that most narcotic of words, ‘wealth’. It is a credential that Scottish football has slavishly fallen for in the past.

Nice paintings nonetheless.

 

 

Stuart Cosgrove is a St Johnstone fan and the author of ‘Detroit 67 – the Year that Changed Soul’



Categories: Football

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17 replies

  1. A quality article about tacky, divisive, bread and circuses.

    Scotland’s shame.

  2. To get a bit more insight into the operation of Tax Havens and Trusts, how they are core to the City of London and Wall Street operations I can highly recommend ‘Treasure Islands’ by Nicholas Shaxson (see http://treasureislands.org/). It is quite an amazing and well written read. Interestingly the fine art angle brought to light by Stuart here is not one Shaxson touched on though, so adds another layer to this particular corrupt onion.

  3. Money rules football, so much so it has become an arms race. The local connection is often broken with fans favouring rich teams, exceptions are Stuart and Tam.

    More important to me as an ex Hun, is that whomever is in charge of Rabgers, steers them away from the bigots, deadbeats and morons so they become a ”normal” football club.

    You support a team for many reasons as a kid, blue being my favourite colour was mine. Other kids, similar tales. The your trapped, I bet folk change teams less often than bank accounts.

    Rangers have the opportunity in this “New Scotland” to put the bad old days behind them and re-invent themselves as team of all the people, white, black, Asian and of any religion.

    To attract money Rangers need a broad fan base, the gene pool of bigots is ever decreasing, and an appropriate strategy is needed. Sponsors only invest in attractive brands, there is nothing attractive about sectarianism and racism.

    In sum, to be relevant and prosperous Rangers need to change from the top down, but more importantly, the bottom up!

  4. Scottish football will never been in a decent place unless all the clubs are owned by the fans and run for the fans and it is legally impossible for any tax exiled individual to own or influence anything at all. Likewise the clubs must be legally made, some way or other, to develop, play and retain local playing talent or the game has no future. Despite the dodgy handball Inverness Caley Thistle beat Celtic with two young Inverness born players on the field.

  5. Interesting and erudite article combining fine art, psychopathology, greed, Scottish cringe and fitba’ all in one go.

    I think the description of King that ‘he showed no sign of embarrassment or any emotion when he conceded that he had lied to the (SARS) commissioner in a number of his income tax returns. In our assessment, he is a glib and shameless liar”, tells you all you need to know about the prospects for the ‘Gers.

    I fully agree with @McKay, that the new Rangers had a real chance of real change, if their fans had united to own the club. Instead the larceny of their club’s soul continues. With a name like King and an interest in art of a teutonic nature could it be that the new chairman of the club will allow the Hunnish nature of the club to endure?

  6. “Glib Liar” seems an improvement on the last owner

  7. I wonder what Corporatist Hell and Barraload think of this. Does anyone know if this Dave King bloke drinks kool-aid?

  8. Excellent article. I wonder if King’s wine estates if Sud Afrika were anywhere near Lord Smith’s place? Same type offshore ‘financial engineers’ have for years owned/exploited much of Scotland’s privatised ‘utilities’ – energy, airports, ports etc.; looks like we can now add fitba tae the list. Watch the balance sheet effect closely….. John Swinney might want to add such matters to his Full Fiscal Responsibility ‘to do’ list.

  9. Stuart Cosgrove gave Celtic’s Dermot Desmond a very easy passage ignoring his long-history of tax-free offshore interests.
    The best source of info on Desmond is taken from the Irish Govt’s Moriarty Tribunal into the financial games played by Charles Haughey the former Taoiseach and his close friend Dermot Desmond. (See wikipedia)

    Mr Desmond’s off-shore holdings In Barbados (far more substantial than Motherwell’s benefactor) are substantial-The Sandy Lane Hotel with its 4 Golf Courses are just some of his public investments there.
    There is much more to say of Mr Desmond but I will leave that to Mr. Cosgrove with his new interests in football’s art and wealth.

  10. ”Stern is an artist of towering significance in South Africa, whose Zanzibar-period paintings are among the finest in modern African art. In 2011, the auction house Bonhams sold one of her most powerful works, a portrait simply called ‘Arab Priest’ for over £3m.”

    3 million! Gosh! Must be artistically good if that kind of money is around. Like Tracey Emin’s stuff, eh? Let the financiers decide; they must know. Onwards!

    I am disappointed but not surprised that Mr Cosgrove equates artistic commerce with artistic merit. However he is not alone; much of the art/cash nexus thinks the same. I may think this is risible and corrupt but who cares? It was always so.

    Like ‘Chewing the Fat”, I smell shomething.

  11. Really enjoyed this piece and feel it raises sporting microcosms for wider social and economic phenomena. It’s not just the SFA who shrug off tough decisions on Too Big Too Fail institutions. It’s not only Rangers taking pelters for their “zombie” status, anyone watching Max Keiser will know he levels the accusation at banks and financial institutions right round the world.

    At it’s heart the Rangers saga is our wee parochial spin on the credit crisis, neo-liberalism and globalisation. David Murray pissed a ton of other people’s money up a wall and now everyone else pays. That’s a very familiar tune and even as a Celtic fan I find myself railing against the austerity forced on our once working class sport.

  12. ” Hearts were brought to their knees by a Lithuanian speculator.”
    As I recall, Hearts were already on their knees and heading for oblivion before Romanov turned up. Pricewaterhouse Cooper’s analysis of Scottish football’s finances found that Hearts were one of five SPL clubs which were technically insolvent. Hearts owed a colossal amount of money to the Bank of Scotland and were even on the point of selling Tynecastle for £20 million in an attempt to reduce the debt. Romanov’s banking group took that debt over when he acquired the club.

    Clearly, Romanov did not fix the problem but he certainly didn’t create it either. His period in charge was merely a stay of execution for a club whose very existence was already in mortal danger.

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