SCOTLAND's most senior law officer has been criticised for an "opaque and confusing" attempt to stave off a damages case brought by a key figure in businessman Craig Whyte's takeover of Rangers over the doomed club fraud probe.
Prosecutors are now arguing they had a degree of reasonable cause to pursue David Grier, an executive with Duff & Phelps and a negotiator in the takeover as it seeks to avoid major damages.
Lord Tyre has previously ruled that there was no “probable cause” to prosecute Mr Grier who is seeking £5m damages from the Lord Advocate and £9m from Police Scotland.
Mr Grier and others were subjected to detention and criminal proceedings with others in relation to fraud allegations in the wake of Mr Whyte's purchase of Rangers from Sir David Murray for £1 in May 2011 and its subsequent sale before a judge dismissed all charges.
Officers suspected Mr Grier, of London, had broken the law during the sale of the Ibrox side and the businessman was charged with fraud, conspiracy, a charge under the Proceeds of Crime Act and a charged of attempting to pervert the course of justice - before the case was dropped.
Mr Grier has always said he was unaware that London finance firm Ticketus funded Mr Whyte's controversial purchase of the club by buying up rights to future season tickets.
But in the damages case, Gerry Moynihan QC, acting for the Lord Advocate James Wolffe argued that there was a degree of reasonable cause to go ahead with the case, before the charges were dropped.
He pointed to false claims that were made to an independent committee of the Rangers board, including a letter of comfort at the time of the sale - that showed that Mr Whyte was funding the purchase personally.
The police investigation was launched against a backdrop of the controversial nature of Mr Whyte's nine-months in charge after his 2011 takeover.
Mr Whyte agreed to take on Rangers' financial obligations, which included an £18m bank debt, a potential £72m 'big tax case' bill, a £2.8m "small tax case" liability, £1.7m for stadium repairs, £5m for players and £5m in working capital.
But he controversially helped fund his takeover by setting up a loan in advance from London-based investment firm Ticketus against rights to three to four years of future club season ticket sales in a bid to raise £24 million and pay off bank debt as part of a share purchase agreement with Sir David Murray.
The letter of comfort over funding was required because the sale to Mr Whyte was on the verge of collapse, the Court of Session heard.
But Andrew Smith QC, representing Mr Grier, said there was "no basis whatsoever of a prima facie case on an objective assessment".
He said: "In my submission the position of the Lord Advocate is opaque in many respects. It's confusing as to the basis of a number of averments.
"And, as has already been established in my submission, there was no evidence at all to support the charges regarding the acquisition fraud. And that was always so.
"Thus the arrest and detention on petition was never justified as having objective, reasonable and probable cause."
He said the letter of comfort and independent committee representations were "never going to lead to proof of a crime" after the Court of Session heard that the Ticketus deal had already been done in advance of that.
"They are utterly irrelevant as partaking in a fraud," he said. "We know that they go nowhere."
He also said there was no substance to Mr Grier being charged with perverting the course of justice by not knowing how Mr Whyte had funded the acquisition of the club through the Ticketus contract. Mr Moynihan said that Ticketus had needed "comfort" that it would still have a claim on the season tickets if Rangers became insolvent.
"So what what was being done or what was thought to be in necessary was to provide comfort to Ticketus, so that Ticketus would advance the money, so he (Mr Whyte) could show to Murray International Holdings that he had the money available, and the transaction would proceed.
David Murray
"Without the letter of comfort, the understanding was a transaction would have stopped in its tracks. There was a risk of that so that's the practical result."
Mr Moynihan claimed hat Mr Grier had been aware that unless Ticketus was provided with "comfort", they would not provide the funds to keep the purchase alive.
"'Keep the transaction alive', are his words," said Mr Moynihan.
"The twist, of course, is that, as it turned out, Ticketus put the money in the bank account, sometime in the afternoon of April 7 so before the letters were typed. But that wasn't what was understood at the time and was unforeseen. "
Mr Moynihan added: "What I am suggesting is that there is evidence what was motivating the prosecutor... was there was objective probable cause to conclude that Mr Grier in the two matters that are alleged, the letter of comfort and the making of positive misrepresentations to the independent committee, that he was in it along with the others.
"That is not something (courts) were asked to rule upon, because prosecutors had withdrawn that charge."
Mr Whyte ended up being the last man standing in the fraud conspiracy case and was acquitted of taking over the club by fraud at the end of a seven-week trial four years ago.
David Whitehouse and Paul Clark
The case comes after ex-Rangers administrators David Whitehouse and Paul Clark of Duff and Phelps, agreed a settlement estimated to be around £24m after an agreement in their malicious prosecution case against the Lord Advocate and the Chief Constable was reached "extra-judicially".
On top of damages, Mr Grier, 58, has also demanded a public apology from officials.
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.
Former Rangers executive Charles Green was also told he was able to receive damages after the Crown admitted it had conducted a “malicious” prosecution against him.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here