A SCOTS lawyer and former hedge fund manager accused of defrauding property investors out of millions of pounds has been declared bankrupt.

Gregory King, of Glasgow, is accused by regulators of being behind an alleged £6 million property scam where investors’ money was used to buy land from him at massively inflated prices.

Mr King, a cousin of Glasgow nightclub magnate Stefan King who now lives in Malaga, Spain, has always denied the claims and says he acted in good faith, but financial authorities in Gibraltar believe the deals were fraudulent.

The Supreme Court of Gibraltar issued the bankruptcy order on hearing a petition from the administrator for a company called Advalorem Asset Fund. It raised money from investors, projecting returns of up to 10 per cent on investments via property deals.

Adrian Hyde and his firm CVR Global have carried out more than two years of forensic examination. The petition said a debt of more than £6m was owed by Mr King as a result of a Gibraltar Supreme Court finding last year.

Mr Hyde said: “After a lengthy period of proceedings, we can now begin the process of tracing and realising Mr King’s assets for the benefit of his creditors.”

Mr King was previously behind Heather Capital, another failed investment business that folded with multi-million pound

debts.

It was set up in 2005, registered in the Isle of Man, and attracted wealthy individuals, as well as institutional investors and pension funds.

He once claimed it was a £500m business but it collapsed in 2010 and Mr King and three other businessmen are currently under investigation by Police Scotland over the failed enterprise.

According to the Gibraltar Financial Services Commission, Advalorem Value Asset Fund bought land from Mr King via various holding companies.

In December 2012 the investment fund paid £6m to a Gibraltar company called Thistle Holdings for two companies that owned farmland in Kirkintilloch, East Dunbartonshire.

The land, on a river flood plain and protected from development, was worth about £190,000, according to the FSC.

Before Advalorem bought the land, it passed through a string of companies in Gibraltar and the British Virgin

Islands, according to the FSC’s report. Those companies all belonged to Mr King, it claimed.

The FSC also said the £6m paid to Thistle ended up in one of Mr King’s bank accounts. It also found Mr King had originally paid just £305,000 for the 37-acre plot in 2008.

It was bought from housebuilder Stewart Milne after it was unable to obtain planning permission from East Dunbartonshire Council and concluded it would not be

able to get planning permission in the future.

Despite the Milne planning refusal, a report commissioned by Advalorem from a Glasgow firm of surveyors indicated planning permission was likely as the council needed the money, valuing the land up to £10.3m.

The FSC said Advalorem paid Mr King’s company a deposit of more than £2.1m, with the balance of the £6m completed by June 2013.

The FSC referred the case to the Gibraltar police but a police spokesman said there was not enough evidence to support a criminal prosecution.

Mr King went into finance after running a business in Glasgow providing cars to the taxi trade. In 2002 his business partner, Alexander Blue, was beaten and stabbed to death on his doorstep in Dowanhill, Glasgow, in one of Scotland’s highest-profile unsolved murders.