SCOTLAND'S most senior law officer “departed from Crown regulations” when he allegedly ordered an indictment served against a key Rangers takeover figure, a court has heard.

The allegation over former Lord Advocate, Frank Mulholland surfaced as key club takeover figure David Grier, and executive with Duff & Phelps continues a multi-million-pound wrongful arrest case against the police and prosecutors over the botched probe into the takeover the Ibrox club by Mr Whyte, making accusations of "misconduct".

Mr Grier was subjected to criminal proceedings with others in the wake of Craig Whyte's purchase of Rangers from Sir David Murray for £1 in May 2011 and its subsequent sale before a judge dismissed the charges.

He had the criminal case against him dropped leaving Mr Whyte last man standing in a fraud conspiracy trial. Mr Whyte was acquitted three years ago at the end of a seven-week trial.

Mr Grier is suing the Crown for £2m and Police Scotland for £9m over his wrongful arrest.

The 58-year-old has also demanded a public apology from officials after the Lord Advocate admitted the “malicious prosecution” of Duff and Phelps colleague and former Rangers administrators David Whitehouse and Paul Clark who have agreed a compensation settlement with Police Scotland.

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Mr Mulholland, now a sitting judge,  was Lord Advocate at the time of Mr Grier's arrest while Jim Keegan QC prosecuted businessman Craig Whyte in connection with his purchase of Rangers.

The Herald:

Andrew Smith QC, acting for Grier, told the Court of Session: “There appears to be significant evidence that the former Lord Advocate instructed the indictment be served without a case analysis having been prepared.

“So the former Lord Advocate, according to evidence available, told an advocate depute, Mr Keegan, to serve the indictment. That’s based on evidence from the senior investigating officer [from Police Scotland] in his statement.”

Mr Smith said it was the Crown’s position that the indictment was served due to a “misunderstanding”.

He added: “It’s said by the Crown that the advocate depute misunderstood the Lord Advocate’s position on this.

“But according to the information that’s available, the direct instruction came from the former Lord Advocate to proceed to issue the indictment and not to prepare the case analysis, the precognition.

“If that is correct, we have an extraordinary situation where neither the Lord Advocate, nor one of his deputes, ever properly issued the instruction to prosecute and have departed from Crown regulations that there is a requirement of preparation of the precognition.”

Mr Smith said he planned to question Lord Mulholland about the matters.

The details emerged after representatives of David Whitehouse and Paul Clark of Duff and Phelps confirmed that a a settlement in a multi-million pound claim against the chief constable of Police Scotland was reached "extra-judicially". Mr Whitehouse, of Cheshire, then brought a damages claim against the Lord Advocate James Wolffe QC and the former chief constable of Police Scotland, Phil Gormley, for £9m. Mr Clark, of Surrey, sued for £5m. In August the total claim was said to have gone up to £21m.

Mr Whitehouse and Mr Clark's actions stemmed from their alleged treatment by the police and prosecution authorities.

The Lord Advocate has previously admitted malicious prosecution and a breach of human rights in the investigation while the administrators sought to clear their names.