RANGERS owner Craig Whyte has said he will sue the BBC over "unfounded and defamatory" allegations of criminal behaviour in his past business dealings.

A BBC documentary last night accused him of having control of a company while being banned from being a director for seven years -- a criminal offence which carries a maximum jail sentence of two years.

The Insolvency Service, the Government agency that supervises and investigates matters of corporate and personal insolvency, told the BBC his involvement with Re-tex Plastic Technology during the ban led to it being forcibly wound up after misleading potential shareholders.

The BBC investigation raised new questions about the entrepreneur’s business acumen just five months after he bought the club for just £1 from Sir David Murray and in the wake of a potentially crippling tax case.

A spokesman for Craig Whyte said the Rangers owner would be seeking damages as they begin legal action. Rangers banned the BBC earlier this week, claiming the broadcaster was conducting a “hatchet job” on Mr Whyte and had shown bias against the club.

“Craig Whyte strenuously refutes these unfounded and defamatory allegations and has instructed his lawyers, Carter Ruck, to commence immediate legal proceedings against the BBC. Any repetition of these false accusations will also be met with legal action,” said a spokesman for Mr Whyte last night.

Mr Whyte’s lawyers told the BBC he had a small investment in Re-tex but was never a director or de facto director.

The programme, Rangers: An Inside Story, claimed Mr Whyte had been banned from acting as a director in June, 2000 after officials pursued his company, Vital Holdings Ltd, for failing to produce satisfactory accounts.

It then said he was found to have been involved with Re-tex, which was wound up in 2003 after it offered to sell shares to the public using company statements that were said to contain false and misleading information.

Robert Burns, head of investigations at the Insolvency Service, said: “We took the view that the company was being controlled, or certainly had the involvement of, an individual who was disqualified. That raised concerns.

“We found a number of suggestions, and indeed evidence, that he was in some way, shape or form, behind the company. For example he was signatory to the bank account, he was giving instructions to certain payments.

“In relation to his involvement in running the company then it is an offence and the individual can be prosecuted. Clearly there would have had to be a criminal investigation and a trial. He could have been sent to prison.”

Asked why there was no criminal prosecution, the Insolvency Service told The Herald last night: “It is not our decision to prosecute, we would have passed the file over. The files have been destroyed, so I can’t put my hand on my heart and say who it was handed to. I wish I could.”

Mr Burns claimed in the BBC documentary that Mr Whyte had enlisted fake auditors called Mullet and Co, which signed off misleading Re-tex accounts. The Insolvency Service said a convicted fraudster, Kevin Sykes, was one of the individuals behind Mullet and Co.

The Insolvency Service also told the BBC Mr Whyte had taken two sums of £100,000 from the company, apparently to pay a tax bill.

“There’s no trace of the money being received by the Inland Revenue,” Mr Burns said.

Mr Whyte’s lawyers said that their client had no control over Re-tex’s bank account or finances and denied “in the strongest possible terms” withdrawing any money from the company accounts or appointing any auditors.

Earlier Mr Whyte moved to dismiss claims he did not have the acumen to takeover the club and take it forward.

The 40-year-old venture capitalist from Motherwell said: “I understand people’s concerns about that [his business life] but I’ve stepped up to the plate to do it.

“There weren’t a queue of people waiting to take on this challenge.

“When judgment is passed in years to come I think that people will see that I will have taken the business forward, I will have sorted out the issues. Ultimately my track record speaks for itself.

“I’m here; I’m the owner of Rangers. I’m the chairman of Rangers and I have done a lot more successful deals than deals that haven’t worked out. I think that ultimately speaks for itself.”

All five of the overseeing Independent Board Committee who questioned Craig Whyte’s takeover from Sir David in May said there were “differing views on the future revenue generation and cash requirements of the club” and raised concerns about any liability arising from two tax claims, the larger of which could leave it with a financially crippling bill of £49m -- £35m in tax plus £14m in interest and penalties.

All five have now departed the corridors of power at Ibrox, with Rangers legend John Greig and former chairman John McClelland the latest to go, resigning earlier this week.