Glasgow & West Scotland

Murray adviser 'appalled' by Rangers deal

Craig Whyte arriving at High court in Glasgow Image copyright PA
Image caption Craig Whyte denies a charge of fraud and another under the Companies Act

A key adviser to Sir David Murray was "appalled" when it emerged that Craig Whyte apparently funded his Rangers takeover with money from future season ticket sales.

Michael McGill told Mr Whyte's fraud trial he only learned about the Ticketus deal after Mr Whyte bought Sir David's majority stake at Ibrox.

A jury heard how a bid financed in that manner would not have been "approved".

Mr Whyte, 46, denies a charge of fraud and another under the Companies Act.

At the High Court in Glasgow, chartered accountant Mr McGill also denied that the selling of Rangers had been a "firesale".

Mr McGill, a former director of Sir David's Murray Group and then Rangers, was giving evidence for a second day.

He had earlier told the trial that Mr Whyte stated cash for the buyout was coming from his "personal resources".

But prosecutors claim Mr Whyte helped fund his takeover by obtaining a loan from Ticketus against three years of future season ticket sales.

Before Mr Whyte took the helm, Rangers had a sizeable debt to Lloyds Bank - including an £18m loan.

The jury was shown a March 2011 letter from Liberty Capital to Ticketus signed by Craig Whyte.

It referred to re-paying the debt to Lloyds in raising money by selling tickets to the firm and that the "current owner" was "comfortable" with it.

Prosecutor Alex Prentice asked Mr McGill if he had any "knowledge" of that, to which Mr McGill replied: "No."

Mr Prentice said: "Would you have approved of that?" Mr McGill replied: "No."

The witness said he only found out about any Ticketus deal in early 2012.

This was after there had been "a lot of rumour" before stories emerged in the press.

Image copyright SNS
Image caption Sir David Murray took control of Rangers in 1988 and sold the club in 2011

Mr McGill told the jury: "We were appalled."

He said he "ceased involvement" with Rangers after Mr Whyte took over.

Prosecutor Mr Prentice also asked what he thought about the selling of the club being described as a "firesale".

He replied: "Absolutely not. We had ceased actively marketing in May or June 2010.

"We first started discussions with Mr Whyte around October 2010 and ultimately completed the sale in May 2011.

"That timetable does not fit in any way with a firesale."

Mr Whyte's QC Donald Findlay later put to Mr McGill that the Rangers board, before Mr Whyte took over, "pursued a spend to win model".

This was despite the club being in debt.

Mr Findlay claimed Sir David had taken the club to his "heart", but left it to directors who "manifestly did not know what they were doing".

Image copyright PA
Image caption Donald Findlay QC is defending Craig Whyte in the case at Glasgow High Court

Mr McGill said he could "not answer that" on behalf of Sir David.

The jury later heard that a tax scheme that could have landed Rangers with a huge bill from HMRC was "dreamt up by a porn star".

One of the people behind Employment Benefit Trusts was said to be Paul Baxendale Walker - also described in court as "a struck-off solicitor".

Sir David earlier told how EBTs gave Rangers "the opportunity to get players we may otherwise not been able to afford".

It led to the so-called "Big Tax Case", which currently remains unresolved.

The court was told the scheme was introduced by a firm to the Murray Group board and then brought into Rangers.

Mr Findlay asked Mr McGill if it had, in his view, been "properly analysed".

Mr McGill replied: "I have reservations about the scheme."

Porn star

The QC said Baxendale Walker had been involved in EBTs and went on to call him a "porn star and a struck-off solicitor".

Mr McGill claimed that if Rangers had lost the tax case at that time, he believed the club "would have entered insolvency".

Mr Findlay suggested the "legacy" would "not be great" had that happened.

Mr McGill was also quizzed on what "due diligence" was carried out on Mr Whyte before the takeover.

The witness agreed that no-one had been "hired" to do this.

Mr McGill said checks were carried out to discover if Mr Whyte was a banned director.

Prosecutors allege Mr Whyte pretended to Sir David Murray, and others, that funds were available to make all required payments to acquire a "controlling and majority stake" in the club.

The Crown alleges Mr Whyte had only £4m available from two sources at the time but took out a £24m loan from Ticketus against three years of future season ticket sales.

The court has heard the sale was eventually made to Mr Whyte for £1 but came with obligations to pay an £18m bank debt, a £2.8m "small tax case" bill, £1.7m for stadium repairs, £5m for players and £5m in working capital.

The second charge under the Companies Act centres on the £18m payment between Mr Whyte's Wavetower company and Rangers to clear a bank debt.

The trial, before Lady Stacey, will continue on Tuesday.

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