'Criminality' claims over Rangers owner Craig Whyte By Mark Daly

BBC Scotland Investigations Correspondent Published duration 20 October 2011

image caption Mr Whyte took over an 85% stake in the Glasgow club five months ago

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."

'Be prosecuted'

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.

image caption 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.

'Outsourcing services'

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."

image caption 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."