A Russian tycoon who bought former Rangers owner Craig Whyte’s Highland castle is to stand trial over an alleged £8 million fraud.

Sergey Fedotov, who purchased Castle Grant, near Grantown-on-Spey in Moray, for £1m, is being held in custody in Moscow.

The 42-year-old businessman has already served a prison sentence for a £3.6m property fraud that he committed while head of the Russian Authors’ Society.

He has now been accused of embezzling £8m of funds from the organisation, which collects royalty payments on behalf of writers.

Mr Fedotov bought the 16-century A-listed pile in 2014 after it was repossessed from Mr Whyte when he failed to keep up with the mortgage.

The new charges alleges he conspired with four others to transfer authors’ royalty payments into fake accounts and then withdrew the money.

At a hearing at Moscow’s Presnensky District Court last month his detention in custody was extended until October when the trial is expected to take place.

In June 2017, Mr Fedotov admitted fraud during a hearing at Moscow’s Meshchansky Court and was jailed for 18 months.

However he was released on parole after serving just six months.

Prosecutors told the Moscow court Mr Fedotov deliberately misled the society’s board, encouraging them to transfer properties held by them to a private company.

The company then sold the property to third parties, leaving the organisation out of pocket to the sum of £3.6m.

Mr Fedotov spent thousands of pounds refurbishing Castle Grant after it fell into disrepair during Mr Whyte’s ownership.

He installed modern en-suite bathrooms and a fitted kitchen and one of the rooms features a tartan carpet.

The property, which is set in 35 acres of grounds, also has a ballroom, drawing room and billiard room.

Mr Fedotov put it up for sale for offers over £850,000 in 2018 but it has since been taken off the market.

Russian police started investigating Mr Fedotov in 2015 after concerns were raised about where he got the funds to buy the castle and other properties in the south of England.

Mr Fedotov has previously insisted Castle Grant was bought lawfully and said the purchase was modest as the castle was only worth the price of a small apartment in Moscow.

He said: “That castle in Scotland I have, I acknowledge.

“But this property is irrelevant. The cost corresponds to the cost of a two-bedroom apartment in the centre of Moscow.”

The Russian Authors’ Society is a non-governmental organisation created in 1993 for collective management of author’s rights and has more than 25,000 members.

Mr Fedotov bought Castle Grant in September 2014 after it was repossessed by the Bank of Scotland. In 2015 he allowed the castle’s grounds to be used for a massive banquet and concert to mark the 250th anniversary celebrations of the town of Grantown.

Mr Whyte bought it for £720,000 in 2006 but fell into arrears with the £7,000 a month mortgage. The Bank of Scotland took legal action to recover it after his Ibrox reign ended. In 2018, he was cleared of charges related to his takeover of the club.