Whyte assumed control of Scottish champions Rangers in May
The Scottish Football Association is investigating Craig Whyte after the Rangers owner admitted that he had been disqualified as a company director.
And if it is not satisfied that Whyte falls into its fit and proper person guidelines, it will take action against the Ibrox club.
Rangers issued a statement to the Plus stock exchange on Wednesday confirming Whyte’s seven-year disqualification.
The club says it is happy to discuss the matter with the SFA fully.
“The Scottish FA has noted the Rangers FC statement to the stock exchange regarding the club’s owner Craig Whyte,” said chief executive Stewart Regan.
“We have been in dialogue with the club on this matter and in light of today’s developments have requested clarification by return.
“We await disclosure of key information before we can make any further comment.”
The governing body’s articles of association state that office bearers with their football clubs must meet their board’s fit and proper criteria.
The SFA board reserves the right to make such a judgement “after due consideration of all relevant facts”.
Asked if it was the SFA’s duty to check such matters when a person takes over a football club, Regan told BBC Scotland on Thursday evening: “Every club in Scotland supplies an official return and by supplying that official return they are effectively signing up to the articles of the Scottish FA.
“The rules and regulations are laid out very clearly as to what is and what isn’t allowed as far as company directors are concerned.
“Given that clubs are changing their directors and people are coming and going every day, it’s impossible for the Scottish FA to investigate every single person across every professional club in Scotland.
“So by signing up to the official return they are binding themselves to the articles of the Association.
“When anything happens to indicate that a breach of those articles has taken place, that is the point at which the Association gets involved.”
A spokesman for Rangers said: “At no stage did the club believe there had been a breach of SFA regulations.
“The club will be happy to provide the SFA with all the relevant information and discuss the matter with them fully.”
Article 10.2 (g) makes reference to a person who has “been disqualified as a director pursuant to the Company Directors’ Disqualification Act 1986, within the previous five years”, with the caveat that the list is “acknowledged to be illustrative and not exhaustive”.
White was disqualified from 2000 to 2007, while in charge of Vital UK Ltd, as revealed in a BBC Scotland documentary on 20 October.
Rangers confirms Craig Whyte had company director ban
Rangers Football Club has confirmed its chairman and majority shareholder, Craig Whyte, was disqualified as a company director.
The club admitted Mr Whyte was disqualified for seven years, with the ban beginning 11 years ago.
The disqualification was revealed in a BBC Scotland documentary.
In a separate announcement, the club has revealed that its net debt for the most recent financial year was down from £27m to £14m.
Its turnover was also up by nearly £1m.
The disqualification announcement should have been made to the Plus stock exchange, on which Rangers shares are traded.
The figures are included in unaudited accounts published through the Plus exchange. They also show that net current liabilities have risen sharply, from £21.5m to £34.2m.
That appears to reflect the £49m tax bill which Rangers has been disputing through a tax tribunal procedure, and which could force the club into administration.
Mr Whyte’s statement, with the accounts, said turnover rose nearly £1m to £57.2m.
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With any change in ownership, there will be a change in approach, and I firmly believe the changes I have implemented will be in the longer-term interest of the club, which must always come first”
End Quote Craig Whyte Rangers chairman
That was helped by extra income from European games, “although there was an overall reduction in season ticket sales, hospitality sales and sponsorship revenue”.
Net operating expenses rose by £3.6m to £47.5m, reflecting higher salary levels, increased European and fixture costs and inflation.
Proceeds from the sale of players increased in the year to June 2011 from £512,000 to £4.2m.
And after making a pre-tax profit of £4.2m last year, that fell to only £76,000.
In his statement, Mr Whyte said that the tax bill had been “a dark cloud hanging over the club for far too long”.
He went on: “Rangers has never been short of challenges in recent years and there is no question there are many challenges ahead for both the club and Scottish football in general”.
The Rangers chairman stressed that the club was no longer reliant on bank funding, since he took over the £18m debt held by Bank of Scotland.
He paid tribute to his predecessor Sir David Murray, as majority shareholder, and to former manager Walter Smith, saying his recent achievements on the pitch were “extraordinary by any standard” and set the seal on “a truly remarkable managerial career”.
“With any change in ownership, there will be a change in approach, and I firmly believe the changes I have implemented will be in the longer-term interest of the club, which must always come first,” Mr Whyte added.
‘Criminality’ claims over Rangers owner Craig Whyte
Evidence of alleged criminality in the past business dealings of Rangers FC’s new owner has been uncovered by a BBC Scotland investigation.
It found that Craig Whyte was banned from being a director for seven years.
The BBC heard allegations that Mr Whyte controlled a company despite his ban, an offence which could incur a two-year jail term. It was later wound up after misleading potential shareholders.
Mr Whyte denied all the claims “in the strongest possible terms”.
The 40-year-old businessman from Motherwell owns an 85% stake in Rangers.
Mr Whyte paid Sir David Murray £1 for the Glasgow club six months ago, and settled its £18m debt to Lloyds Banking Group.
Rangers: The Inside Story, which was broadcast on BBC1 Scotland at 19:00 on Thursday, heard allegations about the man who took over the 138-year-old club in May.
The BBC understands Mr Whyte was banned from acting as a director after the government began pursuing his company, Vital Holdings Ltd, for failing to produce satisfactory accounts.
The programme also uncovered evidence that HM Revenue and Customs was chasing some of Mr Whyte’s companies for unpaid taxes.
The programme heard claims about Mr Whyte’s involvement in a company called Re-tex Plastic Technology, during his ban.
Re-tex was wound up in 2003, after it offered to sell shares to the public using company statements which were said to contain false and misleading information.
The firm was investigated by the UK government’s Insolvency Service – the agency that probes corrupt business practice.
Robert Burns, head of investigations at the agency, 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.”
When asked who that individual was, he said: “I’m talking about Craig Whyte, who had been disqualified as a director in June 2000, for seven years.
“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.
Current Scottish champions Rangers have a 140-year history
“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.”
Responding to the claims, Mr Whyte’s lawyers said he had a small investment in Re-tex, but was never a director or a de facto director.
Mr Burns told the BBC that his team had uncovered evidence that 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.
He told the programme that Mr Whyte had appointed fake auditors called Mullet and Co, which signed off misleading Re-tex accounts.
Mr Whyte’s lawyers said 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.
The Insolvency Service believes a convicted fraudster, Kevin Sykes, was one of the individuals behind Mullet and Co.
Mr Burns said: “We have investigated a number of companies which Kevin Sykes has been behind.
“We also know Mr Sykes because of a Serious Fraud Office investigation. In October 2004, he was convicted and received a sentence in total of eight years for his part in a theft from a pension fund which totalled £3m.”
Mr Whyte lived in Monaco for several years
This conviction came three years after Sykes’ last known involvement with Craig Whyte.
The documentary reveals other previous links between Mr Whyte and Sykes, with the latter acting as secretary in four of Mr Whyte’s companies which were dissolved in the late 1990s.
Mr Whyte moved to Monaco for several years around 2000, following his disqualification and the demise of 24 companies in which he was involved.
In March 2001, Sykes told his bankruptcy hearing at the High Court in London that he travelled to Monaco to be paid in cash by Mr Whyte for “outsourcing services”.
Mr Whyte’s lawyers said its client had never been a close business associate of Kevin Sykes, and denied paying him a retainer.
Rangers’ finances have hit the headlines in recent months, after a judge ruled more than £3m of its assets should be frozen, pending further court action.
The Court of Session in Edinburgh heard that a disputed tax bill of up to £49m left the SPL champions at a “real and substantial risk of insolvency”. The tax hearing is due to begin next month.
The documentary comes just days after Rangers announced it was withdrawing all co-operation with the BBC.
In a statement, Craig Whyte and Rangers FC said: “As a result of the BBC’s approach, Mr Whyte and Rangers FC believe there is a strong risk that the programme will mislead and misinform viewers about matters concerning the club, and has suspended the BBC’s access to the club.
“Mr Whyte and Rangers wish to reassure viewers – and those of the club’s valued fans who may be watching – that the best interests and secure future of the club are and will remain their priority.”
BBC Scotland Investigates – Rangers: The Inside Story was broadcast on BBC1 Scotland at 19:00 on Thursday 20 October, and will be available for a week on the iPlayer.
‘Criminality’ claims over Rangers owner Craig Whyte
Alastair Johnston had concerns about Craig Whyte’s takeover of Rangers
Lloyds Bank threatened to cut Rangers’ credit line if Craig Whyte’s takeover of the club did not go ahead, it has been claimed.
Former chairman Alastair Johnston told a BBC documentary he was warned about obstructing the deal by an individual employed by the bank.
Mr Johnston chaired the Independent Board Committee (IBC) which assessed bids on behalf of shareholders.
Lloyds said the decision to sell was solely a matter for Sir David Murray.
The club was initially put up for sale in 2009, as former owner Sir David Murray attempted to control its debts.
Mr Johnston took over as chairman in August 2009, when Sir David stood down.
The IBC, featuring Mr Johnston, Martin Bain, John Greig, John McClelland and Donald McIntyre, was formed in 2010 to assess the value of any bids and report its findings to Rangers’ 26,400 minority shareholders.
Businessman Andrew Ellis’s bid was announced in early 2010, and the bid from Mr Whyte emerged late last year.
A due diligence document about Mr Whyte’s business history was commissioned and presented to the IBC.
The IBC had sufficient concerns about Mr Whyte’s bid to issue a statement demanding that the new owners specify their financial commitment to the club in a document to be sent to all shareholders.
The Whyte bid, which included a pledge to pay the £18m debt owed to Lloyds, was initially rejected by the IBC.
It went through in May this year, however, after being accepted by club owner Sir David Murray.
Mr Johnston spoke about the takeover during an interview for the BBC documentary Rangers: The Inside Story.
Speaking about the alleged threat from the individual at the bank, Mr Johnston said: “Let me paraphrase, I was told that if I stood in the way of this deal happening, they said we’re gonna cancel your credit line tonight.”
Regarding Sir David’s part in the deal, Mr Johnston said: “David wasn’t in control of his own destiny.
“He’d become so beholden to Lloyds Bank of Scotland, and Lloyds Bank of Scotland desperately wanted this deal to happen.”
Mr Johnston also told the programme he had wanted to know more about Mr Whyte’s financial position.
He said: “One of our problems was that we did not see Mr Whyte’s ability to have that £9m or £10m you need to keep the club going so it could pay its bills on time.”
He added: “Liberty Capital was designated by Mr Whyte as his source of funding. And he wouldn’t tell us very much about Liberty Capital.”
A spokesman for Lloyds said the takeover was a matter for former owner Sir David Murray.
He said: “Lloyds Banking Group’s aim has always been to secure the long-term financial stability and security of our customer, Rangers Football Club.”
The programme also heard from former Rangers director Paul Murray, who said: “I think a lot of Rangers’ issues were a direct result of the banking crisis, because the banking environment changed and every company including football clubs had difficult relationships with the bankers.”
He went on to say how important the club’s place is in Scottish society.
He said: “With an institution like Rangers we’re all custodians of a 140-year-old institution. It’s not just simply another company, there’s a wider responsibility.”
Mr Murray said he doubted Mr Whyte’s logic in taking on an unspecified tax bill.
He added: “From my experience of buying and selling companies over a 25-year period, I’ve never ever seen anyone take on a liability of that nature before.”
BBC Scotland Investigates – Rangers: The Inside Story was broadcast on BBC1 Scotland at 19:00 on Thursday 20 October, and for a week on the iPlayer