Rangers chairman Dave King 'not a poor businessman', court hears

Dave King
King led a successful boardroom takeover at Ibrox in 2015

Rangers chairman Dave King is not a "poor businessman" unaware of his legal obligation to fund an £11m share purchase a court has been told.

Advocate James McNeill QC told judge Lord Bannatyne at the Court of Session in Edinburgh Mr King is no "innocent".

He added Mr King would know he had to make an offer to other shareholders.

The court heard how Mr King should have known legislation meant entrepreneurs with a 30% stake in businesses are compelled to make the offer.

Mr McNeill told the judge that Mr King's legal team's suggestion that their client was unaware of the 2006 Companies Act was incorrect and that there was evidence available to show that Mr King was fully aware that he would have to make an offer to remaining shareholders.

The lawyer said that financial investigators had believed they had established that Mr King acted "in concert" with three wealthy fans known as the "Three Bears" and that Mr King acted with George Letham, George Taylor and Douglas Park to acquire a 34% stake in the club.

Mr McNeill said he disagreed with claims the four men did not act in concert in acquiring the stake and also with a claim made by Mr King's lawyers that 14.7% of the 34% share was held by a company that is independent of Mr King.

The lawyer said that Mr King refused to co-operate with investigators and that all available evidence showed the businessman was in control of the 34%.

"Mr King is not some poor businessman who does not know the workings of the Company Act," said McNeill on the final day of a two-day debate.

George Letham
George Letham, along with Douglas Park and George Taylor, the so-called "Three Bears", have invested money in the Ibrox club

"This is not someone who is a poor innocent. He didn't come before the panel and say 'I didn't realise'. He decided not to appear so he could not be cross examined."

The Panel On Takeovers and Mergers says it has started proceedings after Mr King ignored an order to make an offer for the remaining shares and the panel want the court to make an order which would force Mr King to make a cash offer at 20 pence a share to remaining shareholders.

The court heard on Thursday that the Three Bears purchased a 16.23% of shares in Rangers on 31 December 31 2014. Mr King then used cash from a family trust to buy 14.7% of the shares. These shares were placed in the name of a company called New Oasis Asset Management Limited.

Mr King claims the firm, which is registered in the British Virgin Islands, is independent of him and he has no control over the shares.

On Friday, Mr McNeill told the court that financial investigators had obtained emails which showed Mr King and the Three Bears co-operated with each other and that the evidence showed Mr King was well aware of the law.

"Mr King has an understanding of the law," Mr McNeill added. "He has a detailed knowledge of the code."

Family trust

The lawyer also addressed claims made by Mr King's legal team that their client did not have the funds required to make an offer for the remaining shares.

The court heard claims Mr King could not get cash because it was held in trusts that were held in his family's name. The businessman claimed his family determined how the money was spent.

Mr McNeill said the money used to purchase the New Oasis Asset Management Shares came from a trust "controlled" by Mr King.

He added: "He is in de facto control of the fund. Mr King has used a trust structure which allows him to plead to having a lack of funds to avoid his obligations.

"There is clear evidence available to the court that when it suited Mr King the trust funds were available in order to buy the shares. The court should make an order in order to ensure compliance."

Earlier on Friday, Mr King's advocate Lord Davidson of Glen Clova QC told the court that Mr King did not have money and was not able to fund the buy-back at 20 pence per share.

The lawyer told Lord Bannatyne that there was money in on-shore and off-shore trusts but they were in the name of Mr King's family and he did not have control of them.

Lord Davidson said the court should not pass the order required by the panel because the shares were currently worth 27 pence.

He said: "Mr King is penniless. Any order wouldn't secure compliance. It won't. It is pointless."

Lord Davidson also said that the court may have to hold a hearing into Mr King's finances before making an order in favour of the panel.

He added: "My submission is that the court should refuse the order which is sought.

"My Lord should allow the proof of these issues - one way of going forward to is to have proof of quantum of funds. However, my Lord is not obliged regardless of consequence to give the order sought."

Lord Bannatyne will issue his ruling at a later date.

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