FORMER Rangers owner Craig Whyte has been disqualified from acting as a company director for 15 years, after a court heard that his conduct in dealings with the Ibrox club was “singularly shocking and reprehensible”.
The Insolvency Service handed out the maximum ban available under its powers “for failing to avoid conflict of interest in the running of the club”.
Lord Tyre, at the Court of Session in Edinburgh, said that the case for imposing a period of disqualification on Whyte was “overwhelming”.
He said: “He deliberately placed his own interests before those of the company.”
David Thomson, counsel for Secretary of State for Business Vince Cable, said Whyte “preferred his own interests to those of Rangers”, adding that his conduct was “shocking and reprehensible”.
He told the court: “His acquisition of Rangers was entirely predicated upon an untruth and the untruth was he would be funding the acquisition using his own personal wealth or that of his company.”
Whyte, formerly of Castle Grant, Grantown-on-Spey, in Morayshire and Rue De Tenao, in Monaco, did not appear at the Court of Session in Edinburgh to defend the action.
Lawyers previously acting for him withdrew from the case.
Whyte took Rangers (RFC) into administration in February 2012 and the club was consigned to liquidation in the June of that year – just 13 months after he took over.
He previously received a seven-year ban as a director in 2000, a fact that did not emerge into the public domain until after he bought a majority stake in Rangers from Sir David Murray’s company for £1 in May 2011.
Whyte was cited for:
• Causing the Glasgow club to enter into an agreement to “effectively fund the purchase of its own shares”.
• Conducting the club’s affairs without reference to other board directors, “preventing RFC from being subject to proper corporate governance”.
• And also causing the club to fail to comply with its tax obligations.
Murray sold the club to Whyte on the understanding that he would pay off bank debts of about £18 million – but the money came from selling off future season ticket sales from Ticketus.
It was said in the court petition: “The effect of the Ticketus contract was that RFC effectively funded the purchase of its own shares.
“Quite apart from the unlawful nature of such a transaction, the Ticketus contract was not on any view a transaction into which RFC should have entered.”
Whyte removed several directors while others quit in frustration at their exclusion from decision-making.
Ultimately, the club owed £21m to Her Majesty’s Revenue and Customs, excluding the so-called “big tax case” that preceded his takeover, when they were consigned to liquidation.
Whyte was involved in attempts to complete an assets purchase of the doomed club but found himself sidelined by Charles Green’s consortium, which relaunched Rangers as a new company in the bottom tier of Scottish football in June 2012. Financial problems continue to plague the Ibrox club.
Yesterday, UK business minister Jo Swinson said: “The court has disqualified Craig Whyte for 15 years for the harm he caused to Rangers Football Club, and to the many football fans who believed in his promises.
“Mr Whyte bought a much-loved club and promised fans that he would provide further cash to bring success.
“However, he caused the club to use this money to fund the purchase of its own shares, reducing funds for investment.
“He also failed to consult other directors on important decisions, meaning that his behaviour went unchallenged.
“Such blatant lack of regard for proper corporate behaviour and control does not have a place in modern society.
“Directors have a clear, statutory duty to ensure that their companies are run properly, for the benefit of the creditors, shareholders and, in this case, fans who believed in him.”
Whyte’s actions in another of his firms, Tixway UK, were also taken into account by the court, which heard he failed to “maintain or preserve adequate accounting records, or if records were maintained he failed to co-operate with requests to deliver them up”.