Ordering Mr King to pay is POINTLESS because Gers chairman is PENNILESS
He doesn’t control family trusts, QC claims in £11m takeover case
RANGERS chairman Dave King is “penniless”, his lawyer told a court hearing yesterday.
The Ibrox supremo is contesting a financial watchdog’s bid to make him to stump up £11million for breaking rules during his takeover of the football club.
The Takeover Panel want King forced to offer to buy out other shareholders at 20p a share.
But yesterday his advocate, Lord Davidson of Glen Clova QC, continued his assertions that King simply does not have the cash.
The lawyer said there was money in onshore and offshore trusts but they were in the name of King’s family and he didn’t have control of them.
He also recommended judge Lord Bannatyne dismisss the order because the shares were currently worth 27p.
The lawyer added: “Mr King is penniless. Any order wouldn’t secure compliance. It won’t. It is pointless.”
Lord Davidson also said that before making an order in favour of the panel, the court may have to hold a hearing into King’s finances.
He told judge Lord Bannatyne: “My submission is that the court should refuse the order which is sought.
“My Lord should allow the proof of these issues – one way of going forward to is to have proof of quantum of funds.
“However, my Lord is not obliged regardless of consequence to give the order sought.”
On Thursday, the hearing at the Court of Session in Edinburgh was told King didn’t know he’d be legally required to fund the £11million share purchase as part of his takeover.
But yesterday Advocate James McNeill QC, acting for the Takeover Panel, said King shouldn’t be treated as a “poor businessman” and wasn’t an “innocent”.
He told the court the tycoon knew that legislation dictated that entrepreneurs who hold a 30 per cent stake in businesses are compelled to make the offer.
McNeill said a suggestion made by King’s legal team that their client was unaware of the 2006 Companies Act was incorrect.
He said financial investigators believed they had established that King acted “in concert” with three wealthy fans nicknamed the “Three Bears” – George Latham, George Taylor and Douglas Park – to acquire a 34 per cent stake in Rangers.
McNeill said he disagreed with claims that the four men didn’t act in concert in acquiring the stake.
He also disagreed with a claim made by King’s lawyers that 14.7 per cent of the 34 per cent share was held by a company which is independent of the Ibrox chairman.
He added that King refused to co-operate with investigators and that all available evidence showed the businessman was in control of the 34 per cent stake.
McNeill added: “Mr King is not some poor businessman who does not understand the workings of the Company Act.
“This is not someone who is a poor innocent. He didn’t come before the panel and say, ‘I didn’t realise.’
“He decided not to appear so he could not be cross examined.”
The Panel On Takeovers and Mergers, who regulate financial deals in the UK, say they started proceedings after King ignored an order to make an offer for the remaining shares.
The panel want the court to make an order which would force Mr King to make a cash offer at 20p a share to remaining shareholders.
The court has heard that in December 2014, the Three Bears purchased 16.23 per cent of shares in Rangers.
King then used cash from a family trust to buy 14.7 per cent of the shares. These shares were placed in the name of a company called New Oasis Asset Management Limited.
King claims New Oasis, registered in the British Virgin Islands, are independent of him and he has no control over the shares.
Yesterday, McNeill told the court that financial investigators had obtained emails which showed that King and the Three Bears co-operated with each other.
He added: “Mr King has an understanding of the law. He has a detailed knowledge of the code.”
The lawyer also addressed the claims made by King’s legal team that their client didn’t have any money.
The court heard King couldn’t get cash because it was held in trusts that were held in his family’s name.
The businessman claimed that it was his family who determined how the money was spent.
But McNeill said the money used to purchase the New Oasis shares came from a trust “controlled” by King.
He added: “He is in de facto control of the fund. Mr King has used a trust structure which allows him to plead to having a lack of funds to avoid his obligations.
“There is clear evidence available to the court that when it suited Mr King, the trust funds were available in order to buy the shares.”
Lord Bannatyne will issue his ruling at a later date.
This is not a poor innocent. He decided not to come before panel JAMES McNEILL