RANGERS are being investigated by a London-based stock exchange for allegedly failing to disclose new owner Craig Whyte's previous directorship ban.
PLUS-SX, which the Ibrox club trades on, requires firms to announce whether any new directors have been disqualified from “acting in the management or conduct of the affairs of a company”.
Sanctions for breaching the rule can include a fine of up to £100,000 and firms not being allowed to trade shares on the exchange.
A PLUS spokesman said of the alleged non-disclosure of Whyte’s ban: “PLUS Regulation are looking into this matter.”
Whyte shot to prominence earlier this year after one of his firms, Wavetower Ltd, acquired an 85.3% stake in The Rangers Football Club plc.
Around the same time, Whyte and his business associate Phil Betts also became club directors. PLUS confirmed the deal in May.
However, PLUS rules make clear that “issuers”, in this case Rangers PLC, must announce certain information “as soon as possible” about new directors.
This includes directorships held over the past five years, as well as details of some unspent convictions.
Firms also have to supply information about new directors’ involvement with companies which have gone into administration, receivership or liquidation.
Crucially, the rules also require: “Details of any official public incrimination or sanction of such person by statutory or regulatory authorities ... and whether such person has ever been disqualified by a court from acting in the management or conduct of the affairs of a company.”
A BBC Scotland documentary last month revealed Whyte had been banned as a director by the Insolvency Service in 2000 for seven years.
Motherwell-born Whyte made his name in the 1990s in the security and plant hire business.
Whyte was disqualified as a director after the Government began to pursue his firm, Vital Holdings, for failing to produce satisfactory accounts. By the time the ban came into force, Whyte had left Scotland for Monaco.
However, it is alleged that Rangers never announced the disqualification when Whyte became a director. The disqualification is not mentioned in any of Rangers’ statements posted on the PLUS-SX website.
Breaching the rules can result in PLUS imposing “disciplinary sanctions”.
A spokesperson for the PLUS regulation department told the Sunday Herald that the “disqualification of a director” is “treated as information required to be disclosed pursuant to Rule 71 and Appendix 1, Rule 18. In the case of Mr Whyte PLUS Regulation has taken account of recent accusations over the possibility of Mr Whyte failing to make adequate disclosure under the PLUS Rules and is progressing these concerns”.
Asked if this meant Whyte’s disqualification had not been disclosed and that PLUS was investigating this issue, the spokesman added: “Indeed. If Mr Whyte were disqualified from acting as a director then this should have been disclosed. PLUS Regulation are looking into this matter.”
It is understood that PLUS has been in contact with the Insolvency Service over Whyte’s disqualification.
In the past, PLUS has imposed sanctions on firms for rule breaches. Earlier this month, China CDM Exchange Centre Ltd was fined £12,500 after it was found to have imposed restrictions on the transferability of shares.
Prior to the fine, PLUS suspended trading in the securities of the same firm.
News of the investigation comes against a backdrop of financial uncertainty for Rangers.
The club is awaiting the outcome of a £49 million tax battle with HMRC, a case that could result in the owners going into administration.
Former chief executive Martin Bain and ex-finance director Donald McIntyre have also launched legal bids to freeze the club’s assets in separate cash disputes.
Glasgow-based legal firm Levy & McRae, which also acts for The Herald and Sunday Herald, successfully took Rangers to court over an unpaid bill. Rangers settled another alleged debt with law firm Fyfe Ireland last week.
This newspaper revealed recently that The Rangers FC Group Ltd – which used to be called Wavetower and now owns the 85.3% stake in the club – had missed a deadline for filing its annual return.
However, the firm has since submitted the document to Companies House.
It shows the plc has three directors, Whyte, Betts and Andrew Ellis, while the sole shareholder is Whyte’s Liberty Capital Ltd.
A statement issued jointly on behalf of Craig Whyte and Rangers FC plc read: “These accusations were made in a recent BBC Scotland documentary which is now the subject of litigation. While legal action is ongoing, it would be inappropriate to make any public comment. Any announcements will be made in due course through the proper channels.”
An Insolvency Service spokeswoman confirmed Whyte had been disqualified as a director in 2000.
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