Craig Whyte’s illegal plot to seize control at Ibrox

A court heard yesterday how Craig Whyte and his lawyer conspired to rip off Rangers for £25million.

The disgraced owner and his solicitor Gary Withey are accused of lying about being able to pay off the debts of the cash-strapped club.

Administrators Duff & Phelps say this convinced then-director Paul Murray and the Ibrox board to shelve a £25million share issue and agree to Whyte’s takeover.

Whyte, left, and Withey – who became Rangers’ secretary – either meant to damage the club or did not care what harm resulted from their conspiracy, it’s claimed.

Mark Phillips QC, for Duff & Phelps, went on: “Mr Whyte and Mr Withey conspired together with intent to injure the club by unlawful means. The principal purpose or objective of the conspiracy was the acquisition by group of the majority stake.”

The administrators are suing Whyte’s takeover vehicle – the Rangers FC Group – and legal firm Collyer Bristow, who Withey worked for, for the £25million they claim the club would have made.

And in an explosive court hearing yesterday, their lawyers levelled a series of damning accusations, claiming:

● Withey lied about Collyer Bristow having received the cash to fund a takeover of Rangers.

● He forged Whyte’s signature on a letter backing up the cash claims.

● Whyte’s takeover firm and lawyers made up a story about transactions having gone through at the time of their takeover.

● Some of the Ticketus deal money was used by Whyte to pay his lawyers.

● When funding irregularities emerged, Withey “did a runner”.

Mr Phillips told the High Court in London the administrators had been the victims of a “deliberate deception” carried out by Whyte and his lawyers.

Whyte’s take-it-or-leave-it offer in May 2011, in which he pledged to pay off Rangers’ debts, insisted on Paul Murray’s share flotation being shelved. Mr Phillips said Whyte’s takeover firm and lawyers knew they did not have the cash and were liable for the £25million Rangers missed out on from selling shares.

He said: “Mr Whyte and Mr Withey knew that the share issue and the takeover were mutually exclusive alternatives – and the success of the conspiracy would therefore cause financial detriment to the club in the sum of £25million.

“The club will incite the court to conclude they intended to cause loss to the club or were recklessly indifferent.”

The damages action accuses Collyer Bristow and Rangers FC Group of conspiracy, breach of undertaking,
negligence and breach of trust, with Withey complicit in the allegations.

Mr Phillips told the court there was no evidence anyone else at Collyer Bristow was involved but that as Withey acted for the firm, they were liable for the losses flowing from his “conspiracy”.

The court heard that Whyte’s majority-stake takeover offer pledged to pay off Rangers’ then £18million debt to Lloyds Banking Group and invest £9.5million of “new money” into the club.

The court heard Whyte and Withey’s story began to unravel after Rangers went into administration and questions were asked of Collyer Bristow.

Documents provided to the court said: “Initially, Mr Withey responded by stating that Collyer Bristow did not hold any money for the club. Then he changed his story and said Collyer Bristow held only £260,544.14 for the club.

“On February 22, 2012, however, Biggart Bailie [representing the administrators in Scotland] received an email from Collyer Bristow to inform them Collyer Bristow were holding £3,918,106.54.

“Mr Withey ‘did a runner’. From February 24, he was absent from Collyer Bristow’s offices and on March 2, 2012 he resigned. It was clear something was seriously wrong.”

Mr Phillips said Duff & Phelps became aware “their initial understanding had been based on a deliberate deception by the group and Collyer Bristow”.

He added: “Most importantly, although the group and Collyer Bristow had led the vendor and the board to believe the group had paid a sum in excess of £9.5million to Collyer Bristow, and that Collyer Bristow had been holding this sum in their client account, it is now clear that this story was untrue.”

The court heard that instead, Whyte used the club’s own potential income from future season ticket sales to show that he had the money. However, Phillips said that money was spent on, among other things, paying Collyer Bristow.

According to Phillips, Withey wrote letters confirming that Collyer Bristow were holding the takeover money, when in fact the group “never paid these sums to Collyer Bristow” and the firm “were not, and never had been, holding them”.

Withey is also accused of forging Whyte’s signature on one of the letters claiming to have the funds.

Phillips asked for a hearing on the issue as soon as July, telling judge Mr Justice Arnold in a written statement: “The club’s future is now in jeopardy. Money is tight and time is short.”

He added: “It is extremely difficult to see what case Collyer Bristow can mount that the repeated statements of Gary Withey were anything but false. I find it fanciful that it needs a great deal of investigation.”

The full hearing was set for October.

Collyer Bristow said they would “vigorously” defend the claim.