Trial told of concerns about takeover funds

rangers: Former club director warned over Craig Whyte’s cash sources

Former Rangers director Dave King warned that concerns about the sources of funds available to Craig Whyte in the club takeover may lead to “formal investigation” by police, a court has heard.

Mr King raised the issue in a letter to the takeover panel on April 26, 2011, about two weeks before the closing of the deal with the businessman.

Whyte, 46, is on trial at the High Court in Glasgow, where he denies acquiring the club fraudulently in May 2011.

Cross-examining former Rangers owner Sir David Murray, Donald Findlay QC, who is defending Whyte, read from a letter Mr King wrote to the takeover panel.

In the letter, Mr King wrote: “There is concern at a proposal by Mr Craig Whyte to acquire a controlling interest in Rangers Football Club by purchase of the total share hold currently owned by Murray Group.

“There are concerns about the sources of the funds that are available for the potential acquisition and that this may lead to formal investigation by the policing authorities responsible for these matters.”

Asked whether he was aware of this, Sir David replied: “Not at all.”

The court also heard former Rangers chairman Alastair Johnston described the playing squad as a “shambles” and warned Mr Whyte had not been given the opportunity to understand the issues facing the club.

Mr Findlay read from an email from Mr Johnston to Sir David in March 2011 in which he said: “There has been in my opinion no credible opportunity for Craig Whyte in this process that would have allowed him to totally understand the issues that he will face as majority owner of Rangers Football Club.”

These included the “shambles” of a playing squad, the upkeep of Ibrox stadium and health and safety-related maintenance.

The lawyer said: “In general terms, you entrusted the club to a board that you believed were capable of following the plan that you had left in place but they bring in no investment, their playing squad ends up as a shambles and this is two months before the deal with Mr Whyte, and the chairman has handed a huge extension to the chief executive.”

Sir David replied: “I don’t agree about the squad being a shambles but the facts are there.”

Prosecutors allege Whyte pretended to Sir David, and others, that funds were available to make all required payments to acquire a “controlling and majority stake” in the club.

Whyte denies the two charges against him, one of fraud and another under the Companies Act.

Dave King, left, was giving evidence in the High Court trial of Craig Whyte, right, who denies obtaining the club by fraudulent means.

Pictures: PA.