THE judge who gave disgraced former Rangers owner Craig Whyte a 15-year ban from being a director in the UK said there was a "strongly arguable case" he had committed a criminal offence by using future season ticket money to help fund his purchase of the club.
But after two years and three months, there have been no criminal charges proferred in connection with the Crown Office-ordered investigation into Mr Whyte's takeover of Rangers and subsequent financial management of the club.
And the Court of Session, Edinburgh, heard that officials of the Department of Business Innovation and Skills were unable to discover Mr Whyte's whereabouts to serve notice of the fixing of a director disqualification hearing.
The Crown Office yesterday confirmed a report surrounding the Rangers' investigation concerning five men in connection with alleged incidents between January 2010 and November 2012. It is understood the report was submitted in August.
"The case remains under the consideration of the Procurator Fiscal," said a Crown Office spokesman.
The venture capitalist, who bought Sir David Murray's majority shareholding in Rangers in May 2011, raised £24 million through selling off the rights to three years of supporters' season ticket money to London-based Ticketus to help complete his £1 share purchase agreement takeover of Rangers and pay off the club's £18m debt with Lloyds Banking Group.
Lord Tyre said in a full judgment that Mr Whyte's conduct of the business was "characterised by dishonesty" in a case that "can be regarded as quite out of the ordinary".
The judgement revealed there was a deficiency of liabilities over assets of about £3m in one of his other failed companies, Tixway, which was liquidated in 2012. Lord Tyre said entries in accounts "strongly suggest" company funds were applied to meet personal expenditure.
He said the conduct consisted of a "combination of dishonesty, disregard for the interests of the companies to which he owed duties and the creditors of those companies, use of Crown debts to finance trade, misappropriation of company funds (at least in the case of Tixway) for private purposes and wilful breach of a director's administrative duties".
He said the Ticketus deal funded his acquisition of the club while failing to inform the members of Rangers' independent board committee who were tasked with negotiating the sale of the company.
Lord Tyre said Mr Whyte "misrepresented" to them that the funds for purchase of the company were to be provided from his own resources and from the commercial activities of his British Virgin Islands- based Liberty Capital Limited firm.
He said on the basis of the material he had seen there is a "strongly arguable case" the Ticketus deal amounted to "financial assistance, prohibited by Section 678 of the Companies Act 2006, and accordingly constituted an offence".
Financial assistance is the use of a target company's funds or assets to purchase its own shares, a criminal offence, carrying a possible penalty of imprisonment for up to 12 months.
Lord Tyre said he was "satisfied" the Ticketus agreement was entered into for the benefit of Mr Whyte, and not the club's operating company The Rangers Football Club plc.
"The fact this was done, knowingly, in breach of the express terms of the share purchase agreement enhances the reprehensible nature of the respondent's actings," he said.
"It was submitted he deliberately and dishonestly concealed the Ticketus agreement from other board members until its existence was discovered by the company's financial controller from an independent source. I am satisfied on the evidence that the allegation of dishonesty is established."
Lord Tyre also said Mr Whyte knowingly permitted the company to trade using money owed to HMRC.
Lord Tyre added: "Through his actings at the time of and after acquisition of Rangers, the respondent demonstrated a reckless disregard for the interests of the company to which he owed fiduciary duties."
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