Rangers chairman Dave King has told a court that he fears there are shareholders in the club who have links to organised crime.
The businessman, 63, made the revelation during a hearing into whether he wilfully breached a legal order which compelled him into make an offer to buy remaining shares in the side.
He told the Court of Session on Friday that he was “100 per cent committed” offering to buy the equity of people who want a part of Rangers.
But he told his lawyer Jonathan Mitchell QC that he wouldn’t be able to make the offer to four shareholders at the club because they had links to serious criminal activity.
Speaking about the four shareholders, Mr King said: “They’ve got links to organised crime...money laundering.”
Mr King added that the shares won’t be sold.
Speaking about the conclusion of the board meeting, he added: “The company secretary has given the instruction that these shares cannot be transferred.”
He said that he participated in a Rangers board meeting last Monday which concluded with the directors stating that the four shareholders couldn’t transfer their stakes in any sale.
Speaking about one of the shareholders with suspected links, Mr King added: “They were engaged in criminal activities in the USA. There was an intervention from the authorities there and they were put in administration.”
The South African resident was giving evidence on the second day of proceedings at the Scotland’s highest civil court.
Financial watchdogs, the Panel on Takeovers and Mergers, have taken Mr King to court because it believes he has deliberately flouted a December 2017 judgement which required him to make a multi million pound offer to buy remaining shares in the club.
That order was made after the panel’s lawyers argued that Mr King didn’t comply with the terms of the 2006 Companies Act.
The legislation states that entrepreneurs who hold a 30 per cent stake in businesses are compelled to make an offer to buy remaining shares.
The panel’s legal team argued that Mr King was the majority shareholders in Rangers and that he should make an offer. The panel want Mr King to be declared in contempt of court.
The panel’s legal action arose from the actions of Mr King and the so called “three bears” - businessmen George Letham, George Taylor and Douglas Park - during their takeover in Rangers in late 2014.
Investigators for the panel concluded that the men acted in concert with each other to acquire a 30 per cent share in Rangers.
The money for the buy out came from offshore trusts which were in the name of Mr King’s family.
Lawyers acting for Mr King said the cash came from his family’s trusts and that he didn’t have any control over these trusts.
However, Lord Bannatyne ruled that Mr King had control over these trusts and had to make the offer to buy the remaining shares.
The share offer would be made at the price Mr King acquired his shares - at 20 pence.
On Friday, the court heard that the total cost of the share offer would now amount to £19 million.
Mr King told Mr Mitchell that he had heard the evidence yesterday from the panel’s Deputy Director General Christoper Jillings and he felt “optimistic” that he could make an offer.
Mr Jillings told the court that he’d rather an offer be made late than not made at all.
Mr King said that he’d be taking steps in the immediate future to ensure that the offer would be made.
This would include working with a financial institution to ensure that the money needed from the offer could be transferred from his home country of South Africa to the United Kingdom.
The court had heard that such a step would help satisfy the requirements of the Takeover and Mergers Panel. It would ensure that shareholders who accepted Mr King’s offer would be paid.
Mr King added: “I think we can move forward fairly quickly. I’m 100 per cent committed to making a code compliant offer.
“I’m determined to do the best that I can.”
Mr King said that he had spoken to a number of major shareholders in the club who had given him undertakings that they wouldn’t sell their stakes at 20 pence per share.
He also said that the club had lots of shareholders who owned small pieces of equity in the side. The court heard that these were supporters who wanted to own a part of Rangers.
He told Mr Mitchell: “I’m in very regular interaction with the major shareholders. I’ve not been in contact with the individual shareholders to determine what their needs are.”
Mr Mitchell asked Mr King whether he had a “moral duty” to ensure that these small shareholders were offered to a chance to sell their shares.
Mr King replied: “Yes. That’s correct.”
Mr King said that it was always his intention to comply with the share offer and he wasn’t in “wilful” defiance of the order made by Lord Bannatyne.”
Mr King said that he hoped to appoint a South African based institution to work with him to ensure that the money needed for the share issue could be transferred to the United Kingdom.
He added: “I’m reasonably optimistic that I will have discussions with the Takeover Panel and we will be able to come to a solution.”
Mr Mitchell then asked permission from judge Lady Wolffe for the court to adjourn. He told the court that he wanted to speak to the panel’s legal team to see if both sides could come to a resolution.
Mr Mitchell said such discussions would “obviate the need for further evidence.”
Lady Wolffe agreed to adjourn the court to 2pm. She said that if discussions weren’t successful then the court would sit late to hear Mr King who is, at this stage, continuing to give evidence.
The hearing continues.
Mr King denies being in contempt of court.