A JUDGE has rejected a bid made by Rangers chairman Dave King to stop a financial watchdog from bringing contempt of court proceedings against him.
Lady Wolffe ruled that one of her colleagues could decide on whether the businessman deliberately chose not to follow a December 2017 Court of Session order.
A judge at the Edinburgh based tribunal at that time ordered Mr King to make an £11 million order to the club’s shareholders to buy shares from them.
The action was brought by the Panel on Takeovers and Mergers.
The organisation took Mr King to court because it believed Mr King didn’t comply with the terms of the 2006 Companies Act.
The legislation dictates that entrepreneurs who hold a 30 per cent stake in businesses are compelled to make an offer to investors to buy their shares.
However, Mr King hasn’t made the offer prompting to the Panel on Takeovers and Mergers to have Mr King found in contempt of court.
Lawyers for the South African resident argued that the law stated the Panel needed to have the agreement of Scotland’s most senior prosecutor, the Lord Advocate, before it could proceed.
Mr King’s advocate Jonathan Mitchell QC stated that the organisation didn’t have the Lord Advocate’s agreement and that the action against their client should be stopped.
However, in a written judgement issued at the Court of Session, Lady Wolffe rejected the arguments made by the ‘Gers supremo.
She stated that the law dictates that the Lord Advocate’s agreement is needed only in some cases.
Lady Wolffe stated that the nature of the action brought by Mr King didn’t require the Lord Advocate’s agreements.
She wrote: “In the light of these authorities, I find that there is no merit in Mr Mitchell’s argument. While breach of interdict is a species of contempt of court, it is clear on the authorities that the courts have consistently distinguished that form of contempt from others.
“Mr Mitchell’s proposed conflation of positive and negative court orders cannot overcome the treatment of breaches of interdict as a distinct class of contempt with a special rule.
“No case was cited in which the Lord Advocate’s concurrence was required to a contempt of court involving an order which was not an interdict.
“For these reasons, the respondent’s concurrence challenge falls.”
The case was originally brought to court over the actions of Mr King and the so called “three bears” - businessmen George Letham, George Taylor and Douglas Park - during their takeover of Rangers in late 2014.
Investigators for the panel concluded that the quartet acted in concert to acquire 30 per cent of the shares in the Glasgow side.
Lawyers acting for Mr King said he didn’t the money needed to buy back shares at 20 pence per share.
Mr King’s legal team argued that the shares were acquires from cash which came from his family’s trusts.
The businessman claimed that he didn’t have control over these trusts. He said that a company registered in the British Virgin Islands had control over some of the shares.
His lawyers argued that their client consequently didn’t have the money needed to make the £11 million offer for the remaining shares.
His then advocate Lord Davidson of Glen Clova said Mr King was “penniless”.
However, Lord Bannatyne ruled that Mr King had control over the family trust and make the offer to buy the remaining shares.
In July 2018, lawyers acting for the Panel returned to the Court of Session and told Lord Bannatyne that Mr King hadn’t complied with the order.
This prompted Lord Bannatyne to urge Mr King to comply with the order.
Last month at the Court of Session, Mr Mitchell stated that the panel had to prove their case against Mr King beyond a “reasonable doubt.”
He added: “It must be a wilful defiance of this court. It is not sufficient on the part of the petitioner to say to the court ‘here is an order that hasn’t been complied with.’”
He also urged Lady Wolffe to stop the contempt action.
Lady Wolffe disagreed with Mr Mitchell’s arguments.
She added: “I shall reserve meantime all questions of expenses.”