The Travails of Craig Whyte – At Glasgow Sheriff Court on Monday? + Question re Director’s Disqualification

Little did I realise when I first penned a few words regarding the legal issues surrounding Craig Whyte, the Motherwell-born Billionaire, and his purchase of Rangers, that still, months later, there would be new matters to write about. Today presents the choice of (a) his decision not to hold an AGM within the statutory time limit as, according to the Sun, he does not have good news to tell the shareholders, (b) the failure to produce audited accounts, as they won’t present good news or (c) the hearing due tomorrow at the Court of Session in Edinburgh where we should hear more details of the case brought by Donald McIntyre against Rangers.

However, this missive will move to the west and to Glasgow Sheriff Court on Monday.

Listed in the court roll is the innocuously titled case of One Stop Roofing Supplies Ltd v Tixway UK Ltd. The case is scheduled for a Proof Before Answer before Sheriff Ross, who is one of the designated Sheriffs dealing with Commercial Court actions at Glasgow Sheriff Court.

(A Proof Before Answer is a hearing on the evidence and facts which is necessary before legal arguments are heard.)

What has this to do with Rangers or Mr Whyte, you might ask?

Well, nothing to do with Rangers directly, but a lot to do with Mr Whyte! There are two matters worth noting, I think – one about this case and one about the company.

The company issue might lead someone of a suspicious or cynical bent to suspect that Mr Whyte was acting as a shadow director whilst disqualified. That would clearly be an entirely inappropriate accusation, as I will discuss below.

 

What is Noteworthy About Tixway UK Ltd?

It was incorporated on 16th January 2007, and has its Registered Office at 3rd Floor, 65 Bath Street, Glasgow. This is also an address of Liberty Capital, which owns Rangers FC Group Ltd, and is owned ultimately by Mr Whyte, we are led to believe.

Tixway UK Ltd has a trading address. It is a castle in Morayshire. That is apparently tied in to the court action as the building materials, the supply of which is at the root of this action, are rumoured to have been for work on the castle, it being Mr Whyte’s home.

In each of the last two years dissolution notices have gone into the Edinburgh Gazette for this company on the basis that, each time, the Annual Return has been late. On each occasion the striking off has been cancelled when, belatedly, the Return has made it to Companies House.

Clearly, as with the delayed Annual Return for Rangers, this must be an administrative problem caused by someone being on holiday, or by one of the various Directors ignoring their responsibilities, and therefore nothing that could be held against Mr Whyte. No one would dare suggest that he has a cavalier attitude to Company Law.

So who are, and were, the Directors of this company?

When the company formed, the listed Director was “The Company Warehouse”. This company is involved in assisting clients to set up a limited company and is appointed as the Director initially, stepping down when the true owner is in position to takeover. The other Director was Kim Whyte.

On 3rd March 2008 Liberty Corporate Ltd took over as Company Secretary, and remains in that post today. On 5th May 2008 Kim Whyte resigned as a director and was replaced by Craig Whyte.  Unless I am very much mistaken (as Murray Walker might have said), Kim Whyte is Craig’s now estranged wife.

We now know, after Mr Whyte’s belated confirmation that he was disqualified from being a company director in the UK on 13 June 2000 for a period of 7 years. Therefore he could neither be a company director, nor a shadow director, until 13 June 2007. By that date Tixway UK Ltd had been up and running for almost five months. As we will see from the figures below, at the first year end in January 2008, the company had made a flying start. I am sure that Mr Whyte was fully cognisant of his responsibilities in terms of his disqualification, even though, as he has explained, this was simply for a “technicality”. I would not suggest Mr Whyte ignored or failed to understand the effect of his ban.

I am sure it is simply a coincidence that his wife seems, from the records I have seen, only ever to have been a director of one company, namely this one, and only for the period covering her husband’s disqualification as a director. Clearly the business acumen she exhibited in her short time in charge should have deserved a longer stint in the front line?

 

What is Liberty Corporate Ltd?

This company is the Company Secretary of Tixway UK Ltd. It has its Registered Office at 48 Skylines Village, Limeharbour, London E14 9TS. It is listed as having a trading address of Suite 5, 2nd Floor, Viking House, Lodge Lane, Danholes Roundabout, Grays RM16 2XE. This company was formed in May 2006 and is listed as non-trading. The only human director is Thomas Whyte, a 64 year old Construction Worker. One wonders of Thomas Whyte could be connected to Craig Whyte. Thomas Whyte is also Director of Tixway Ltd, a non-trading company which has the same Registered Office and trading address as Liberty Corporate Ltd. It always amazes me how a Company can be a company director or secretary. It shows what an amazing invention corporate identity was!

The corporate web behind Mr Whyte’s companies is very interesting, and I will come back to it soon.

 

Back to Monday’s Court Case

The excellent Andy Muirhead of Scotzine.com reported earlier this year on a number of the matters which made up the much later BBC documentary about Mr Whyte. In the same piece, he mentioned this case as well.

Whyte is being sued over a £90,000 debt. A writ was served by Glasgow-based McRoberts Solicitors on Whyte’s Tixway firm, at the same time as he was in talks about his Rangers takeover.

His company is being sued by One Stop Roofing, run by Albion Rovers manager Paul Martin.

Martin and fellow company director Robert Jenkins claim that Whyte’s firm ordered £90,000 worth of building materials in June 2009, and has failed to maintain a repayment plan which was thrashed out at the start of this year. To date only two payments have been made…

However like his previous debts, Whyte has denied his company owed the money. A spokesman [Mr Whyte] said, “His firm have done business with One Stop Roofing but all bills have been paid in full. Any legal action will be defended robustly.”

Taking what is known of this dispute, it seems quite simple. One Stop Roofing Supplies allege that goods to the value of £90,000 or more were supplied to Tixway UK Ltd. That company has not paid that amount of the bill.

The spokesman quoted above makes it clear that “all bills have been paid in full”.

This seems rather odd. Usually cases like this are defended on the basis that (a) the goods supplied were defective or otherwise not as described (b) that they were never delivered (c) that the bills rendered were excessive and not as contracted or (d) that the goods were not ordered at all. (On the last note be very wary of companies, especially stationery suppliers who ring your office and ask the person who answers the phone if you want your “usual order” delivered. If the person says yes, suddenly you find yourself with 16 toner cartridges for a photocopier which uses one every eight months!)

Here, as I have said, the issue seems to be quite simple.

Mr Whyte’s spokesman says that all the bills have been paid in full. The Pursuers obviously disagree.

The Commercial Court procedure involves the case being allocated at its first stages to one Sheriff whose job it is to guide it to the end, both by encouraging the parties to discuss any issues capable of agreement and by pinning down the respective solicitors to ensure that the position of each party is crystal clear. Sheriff Ross, who is scheduled to hear the Proof, is an excellent Sheriff and if he has been the Sheriff dealing with the matter all the way through, then he will have ensured that the position of each party is stark, and that there is little or no room for wooliness.

One of the normal rules in these cases is that the Sheriff can require each party not just to produce a list of witnesses, but a witness summary, indication what the evidence of each witness is likely to cover.

On assumes, perhaps naively that Mr Whyte, as the only “live” director of Tixway UK Ltd will be a witness for the defender. If so, and the case proceeds, it would be very interesting to see him in a witness box on oath in a case where his position seems to be diametrically opposed to the other party.

Of course his position might be entirely justified and it is the Pursuer who has gone wrong here. That is what Monday’s proceedings are designed to determine.

 

What Do We Know About Tixway UK Ltd’s Finances?

I had thought that perhaps this company might be a non-trading or dormant company. After all, if it was active one would not expect it to have been on the point of being struck off by Companies House in each of the last two years. In addition, as the last accounts lodged with Companies House were for the year to 31st January 2010 one might expect early next year to see the third consecutive strike off procedure!

The accounts to year end 31st January 2010 were submitted electronically and bear to be signed by Mr Whyte on 1st March 2011! On that basis, maybe Rangers accounts will make it to Companies House by August next year!

I was therefore rather surprised to see the last accounts for the company, as these show a company with a healthy financial picture. The company is exempt from having to lodge a Profit and Loss account, and instead gets away with an abbreviated Balance Sheet.

This discloses the following, with the 2008 and 2009 figures for comparison.

2010                                       2009                                       2008

Investments                      £1,103,190                           £750,000                               –

Tangible Fixed Assets                                                                                                        £1,350,000

Debtors                                £923,856                              £385,026                             £288,816

Cash on hand + at bank £479,802                              £385,026                             £109,762

Creditors (over 1 year)  £137,802                              £177,499                              –

Trade Creditors                                                                                                                    £232,946

Total Net Assets               £2,369,046                           £1,825,093                        £1,515,632

 

Called up share capital   £2,001,000                           £1,501.000

Profit + Loss Account      £368,046                              £324,093

Shareholders Funds        £2,369,046                           £1,825,093                        £1,515,632

 

On the face of it, a healthy company, with a lot of money in the bank. Maybe much has changed since January 2010. One wonders what the problem is here. Will this join the long line of cases where Mr Whyte settles at the door of the court?

From the court lists, on the basis that McRoberts represent the Pursuers, Harper MacLeod act for Tixway UK Ltd. If so, they will not be on the point of going to proof unless they have been fully paid for their work. They are a very good firm, and a very efficient one as regards cash flow.

Sadly other commitments prevent me from attending either the Court of Session tomorrow or Glasgow Sheriff Court on Monday. However, these are public courts and maybe Monday’s case will give us a chance to see Mr Whyte being asked hard questions which he has no option but to answer. I am sure he will surprise his sceptics, and silence his doubters, with his composure in the witness box if required.

To be frank, based upon his track record so far, and as befits a man of his financial standing, I would imagine he has much better things to do than to sit in a witness room in Carlton Place on Monday. Surely some settlement will be achieved to avoid him having to do so?

We shall see.

 

 

 

Advertisements

4 Comments

Filed under Civil Law, Courts, Football, McIntyre v Rangers, One Stop Roofing Supplies Ltd v Tixway UK Ltd, Rangers, The Company Directors Disqualification Act 1986.

4 responses to “The Travails of Craig Whyte – At Glasgow Sheriff Court on Monday? + Question re Director’s Disqualification

  1. TheBlackKnight

    Chapeau Paul (as always) 😉

  2. renfrewdave

    great peice of reporting there. wonder if it will be picked up by the media tomorrow. they might even deicde to just cut and paste your article rather than dig up the info themselves…… that way they know it will be correct.

  3. Brian McW

    Excellent Paul.

    Keep up the good work.

  4. Brogan Rogan Trevino and Hogan

    Paul,

    what an interesting post and what a lot of information to ponder on too.

    Now 65 Bath Street is a building a I know well as I have been in it on many an occasion. The building is an old fashioned warren style building with a number of small cellular offices within over a number of floors. I don’t think anyone would class it as a high profile building, but it does offer reasonably priced city centre accommodation, and it is inhabited by a number of small legal firms, accountants, inslovency practitioners, and so on.

    http://maps.google.co.uk/maps?hl=en&q=48+Skylines+Village+Limeharbour+London+E14+9TS&tab=wl

    A quick flick on google maps roadside pictures seems to show that the address given for Liberty Corporate Ltd at Skylines Village Limeharbour London shows that this is a Modern office “village” in Poplar at the Isle of Dogs out towards the docklands area of London. It is advertised as the only choice of office accomodation for “small business”. It does not strike me as in anyway a palatial office for a Billionaire. My knowledge of London is fairly good and so whilst I am sure that the office offers perfectly nice business accommodation, I would be reasonably confident that if this is one of our Craig’s gaffs then he will be the only Billionaire in the block!

    http://maps.google.co.uk/maps?hl=en&q=48+Skylines+Village+Limeharbour+London+E14+9TS&tab=wl

    As for the trading address of Viking House,Lodge lane, Danholes Roundabout Grays, this appears to be a typical 60’s or 70’s style office building that again would appear to offer modest and convenient office Accommodation at what I would guess is a reasonable price. I note that the office suggested appears to be above a branch of Kwik Fit and a company called Affordable Carpets. Whether they sell magic carpets of not is not yet known. Again I doubt that there is another Billionaire in residence.

    http://maps.google.co.uk/maps?hl=en&tab=il

    It is interesting to note that the action relates to the refurbishment of Castle Grant. I am not sure, but I wonder if the company– or one of the companies— owns this particular property as opposed to Mr Whyte owning it personally. According to the Daily Record (07/05/11), the castle was restored at a cost of some £5 Million.

    http://www.dailyrecord.co.uk/football/spl/rangers/2011/05/07/craig-whyte-i-m-looking-forward-to-making-rangers-a-leading-force-in-football-86908-23113156/

    I therefore wonder if that sum was spent by Mr Whyte personally as clearly as at the date of the accounts produced here, the company that seems to have traded with these particular builders does not appear to have £5 Million in its coffers and it would be interesting to learn how its asset based is made and whether or not it includes the castle?

    Of course, it would also be interesting if it turns out that Tixway does not own the Castle and that Mr Whyte does personally. I wonder what tradesmen and other suppliers would make of a situation where they learn that the company that they are trading with does not own the property concerned? However, perhaps of even greater interest is how such a spend is looked at by HMRC? I am reasonably sure from my limited knowledge of accounting that when a company spends money on the private residence of one of its Directors, then this as seen as a benefit in kind for the Director and he is then obliged to pay Tax on the sum concerned. Could this end up being yet another debt to HMRC but payable by Craig Whyte personally?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s