Sports Direct say Rangers have not repaid £5m loan Published duration 11 December 2015

image copyright PA

A court battle between Sports Direct and Rangers chairman Dave King has heard that the club did not repay a £5m loan despite earlier claims it had.

Mr King's legal team told London's Royal Courts of Justice on Thursday that the loan was repaid on Wednesday.

But on Friday, the second day of the hearing, the QC for Mike Ashley's firm said that was not the case.

Sports Direct previously failed in a bid to have Mr King jailed for allegedly breaching a gagging order.

On Thursday, Mr Justice Peter Smith rejected the application by Sports Direct.

But he has still to rule on whether or not Mr King is in contempt of court for allegedly breaching confidentiality undertakings.

The case is due to be heard in January.

image copyright Getty Images image caption Mike Ashley owns just under 9% of Rangers shares

During the second day of proceedings, David Quest QC for Sports Direct, said that the claim of the £5m loan being repaid had come as a surprise and was investigated.

He told Mr Justice Smith: "That is not correct. The £5m has not been repaid."

Mr Quest said an email had revealed the club was still waiting to collect "another £500,000".

The legal battles are the latest development in a conflict which began when Mr King took over the running of Rangers.

'Grind to dust'

It centres on the commercial arrangements between the club and Sports Direct and its subsidiaries.

Sports Direct and Mr Ashley, who owns shares in Rangers, had applied for Mr King's committal to prison on the grounds that he gave a Sky Sports interview revealing the existence of a meeting, and discussions related to contracts, between Sports Direct and Rangers.

But the judge questioned what the point was of both sides spending a total of some £400,000 on the legal action.

Mr Justice Smith queried whether Mr Ashley was interested in having a "sensible" business relationship with Mr King "or grinding him into the dust".

The judge said: "Maybe he is interested. I don't know."

Mr Quest said Mr King had stated that he had no recollection of whether or not he said the words complained of from the Sky Sports interview.

But the court was entitled to draw inferences against him to the criminal standard required for an individual to be jailed for contempt.

The judge replied: "I am not going to send a person to prison on an inference."

He also expressed concern that Mr King was not being called to be cross-examined in the witness box, but reliance was being placed on media reports.