Part 2a of the Craig Whyte + Rangers Catch Up – The Tixway Case and Why Hide His “Phoenix From the Flames” Story?

 

Yesterday I posted my roundup of the Rangers Football Club PLC and Rangers FC Group Ltd court actions. Helpfully there were rather more interesting developments in the Bain v Rangers case than I had expected. I will do an “add on” post to take account of what happened. However, it seems to me that there is not an imminent settlement on the way in that case. Paulie Walnuts (which I suspect might not be his real name), a commenter on the Rangers Tax Case Blog, has analysed yesterday’s events already. I intend shamelessly to purloin his thoughts, add a bit on, and put it up later on.

 

Now, as the Swedish DJ used to say on Radioactive, “On wit de music” (Joke inserted for fans of 1980’s Radio 4 comedy programmes – if there are any others out there!)

 

Mr Whyte is involved in various cases, or has threatened to take such action. I wanted to have a quick run through where matters stand, at present. As before, I am happy to be corrected should I be wrong in any of the analysis or deductions, or should my source materials turn out to be incorrect.

 

One Stop Roofing Supplies v Tixway UK Ltd

I will deal with this first as it is due to continue in Glasgow Sheriff Court tomorrow (19th January) before Sheriff Ross.

This is the debt action brought by a building supplies company against a company owned by Mr Whyte and in which he is now the sole director.

When the company was formed, Mr Whyte was still serving his ban from being a company director. Therefore the company’s original director was Mrs Whyte (more of whom below). On the expiry of the disqualification, Mr Whyte took up the director’s role, and Mrs Whyte resigned.

Suspicious people have wondered if, in fact, Mr Whyte was acting as a “shadow director” at this time, as his wife seems to have far less business experience than her husband does. However, there has been no evidence of such activity made public, and therefore we must assume that no such evidence exists. In that case allegations of acting in respect of this company as a “shadow director” would be unfair and unfounded, and for the avoidance of doubt, I make no such allegation.

This action, at first sight, seemed to be a straightforward payment action. The Pursuer, a company run by Albion Rovers manager Paul Martin, sued for just under £100,000. Building supplies had been provided, some of which were used to renovate the roof of Mr Whyte’s property, Castle Grant, and not paid for.

However as the court action progressed, it became clear there was more to it. One Stop alleged that they had supplied materials to Snowcast, a company involved in the work on Mr Whyte’s castle.

That company is now in liquidation.

One Stop claims that Tixway owned 51% of Snowcast, and that Mr Whyte had agreed to pay for these materials. Mr Whyte denies this.

One Stop say that hundreds of invoices were sent to Tixway, but it is Mr Whyte’s position that these were all wrongly sent, and should have gone to Snowcast.

When giving evidence when the case last called, Mr Whyte was examined by One Stop’s QC.

From the report in the Daily Record law reports:-

“In a terse exchange with Alistair Clark QC, acting for One Stop Roofing, [Whyte] denied ever saying that the bills were due to be settled by Tixway.

Mr Clark put it to Whyte that he had received text messages and emails from Jenkins about the outstanding debt and a plan to pay it off at £5000 a month.

But Whyte said he had never accepted it was a Tixway debt and that since he was owed money by Snowcast as well, it was in both their interests to discuss Snowcast debts.

Whyte is sole director of Tixway but until April 1, 2008, the only director was his wife Kim.

Mr Clark asked if this was because Whyte had been banned from being a director until that point.

Whyte said: That is a matter of public record. Mr Clark said: Was the ban for trading while insolvent? Whyte said: I don’t have a recollection of why I was banned without legal documents. I am not going to say in open court and get it wrong.

Whyte told Sheriff Nigel Ross the case was an attempt to embarrass him. He said of Martin and Jenkins: They thought I would settle to avoid the publicity of coming here today and that’s why were here. They have attempted to do that already. They went to the press several months ago.”

I have highlighted the part of the exchange which is most important in the wider story of Rangers and Mr Whyte’s involvement with them.

He has been slow to volunteer information he later has acknowledged ought to have been provided, such as his director disqualification. Concessions and settlements seem to have to be dragged out of him. That, in itself, is not necessarily wrong. There is no requirement for a person taking up a position in a public company to subject himself to a “This Is Your Life” analysis, unless the points raised are relevant.

Concerning Mr Whyte there are, I submit, various relevant matters, such as his history as a director, allegations regarding his actions whilst disqualified, and questions as to the source of the “Billionaire’s” funds.

Interestingly, for a man who has threatened litigation previously over “inaccurate” reporting, I am unaware of him seeking an apology or correction for the references to him as a “Billionaire” when he first came on the scene.

Here, under oath, Mr Whyte told the court that he could not recall, without seeing the papers, why he received a 7-year ban in the year 2000.

Previously however, he has been aware of it, suggesting that this arose from “technicalities”.

As I wrote previously, it must be a big “technicality” to get a 7-year ban!

The danger for Mr Whyte is, having said he cannot respond without paperwork in front of him, that he stands up in the witness box tomorrow, or is recalled to give evidence, at which time Mr Clark presents him with the paperwork, and asks him to confirm the reasons!

The records are public, in that they arose from court proceedings. One Stop would be entitled to have obtained them to put them to Mr Whyte.

In my own experience, I have seen many people be caught out by trying to be clever in answering questions in court. Things that one can say in press interviews, for example, and get away with, are not allowed in court.

When interviewed in October by Tom English, for Scotland on Sunday, there was this exchange.

“Question – Let’s look at this closely. They said you were disqualified as a company director. Is that true?

Answer – I’m not comfortable getting into the specific allegations.

Question – They had a government official – Robert Burns, head of investigations at the Insolvency Service – saying that you could, potentially, have faced a two-year jail sentence for your involvement in a company, Re-tex Plastic Technology while disqualified. Is that true?

Answer – I’m not going to comment on specific allegations other than to say on the basis of what I’ve heard the Insolvency Service said last night, I’m looking into the possibility of suing them personally.”

I suspect that Mr Whyte would not be permitted to repeat those answers in the court, or of he did, he would be politely reminded by Sheriff Ross, who is an excellent judge, that he had to respond properly.

 

A Digression – Rags to Riches to Rags to Riches

Mr Whyte appears to be a remarkably modest man.

HE did not come, despite my heading above, from “rags”. His father was, and remains, a businessman in the Motherwell area. As Mr Whyte disclosed previously however, he started to make money by investing whilst at school. This allowed him to build a fortune on leaving school which he used immediately to get started investing in businesses.

By the late 1990’s, he had received glowing profiles in the press, and all for a man who was not yet 30, or not yet 28, depending on which date was on the Companies House records. He had many and varied business interests.

However, he over-reached himself and he was too successful, so the story goes. His companies collapsed. (He was a director of around 15 companies over that period, none of which remains active today.)

He was disqualified by the Court from being a Company Director in the UK for 7 years.

He left the country and travelled to Monaco, where he spent the next few years, until his return to Scotland in 2006, re-building his fortune.

When he came back, still a disqualified director, he was able to buy Castle Grant, a very famous and no doubt very expensive property in Grantown on Spey.

These business interests gave him access to funds to allow him to step up, when no one else had been willing to do so, and buy Rangers Football Club from Sir David Murray.

With this came far more scrutiny than the “under the radar” businessman had ever expected.

However, surely this is an inspiring story. Like many successful business people, Mr Whyte had taken his knocks, and yet bounced back better than ever. I recall a statistic that a large percentage, for example, of American millionaires had first been through bankruptcy (there is no suggestion Mr Whyte has ever been bankrupt.)

Surely Mr Whyte would be willing to share his experiences and insights, to inspire a further generation of entrepreneurs to help fire up the British economy.

In the same interview with Tom English, he was given the chance to share these insights with the public.

“Question – There is an air of mystery about you, though. Nobody really knows much about you – where you got your money from and how much you have.

Answer – Good.

Question – So where did you make your money and how much do you have?

Answer – If I asked you how much money you have, you would be within your rights to tell me to f*** off, it’s none of my business. All that matters is that I’m delivering on what I said I would deliver on. Rangers are in a better place now than they have been in the last three or four years. That’s what’s important. As long as I deliver on what I said I would deliver on what difference does it make?

Question – What other businesses do you have, we know nothing of this?

Answer – I’ve got more than 20 other businesses in the UK and across various parts of Europe and I’m involved in all sorts of things. I’m a prolific deal-maker, but the only one you get to hear about is Rangers. I’m doing deals constantly. This morning I’m working on a decent size deal with a fairly well-known business but it will never get any attention.

Question – Why not?

Answer – Because I don’t want it to.

Question – Again, why not?

Answer – Why should I? I’m stubborn.

Question – Give us the names of a few of your companies that you’re really proud of?

Answer – No. Good effort but I’m not going to name the companies because that’ll create a level of scrutiny for them and I don’t want to have that. I just want them to get on with business. Look, I can’t complain about it because I put myself in the position. David Murray told me what it would be like. I’m fortunate to be in the position I’m in. You know my thoughts, I’m not a publicity hungry type of guy. This stuff doesn’t sit naturally with me. I’m only doing this now because of that BBC thing.”

I think it is fair to say that Mr Whyte is reluctant to share the secret of his success with the world, and even to confirm which other companies he owns or is involved in.

Interestingly, Companies House records suggest he is presently a director of around 10 companies just now. One wonders in what capacity he has “got more than 20 other businesses in the UK and across various parts of Europe.”

A telling line too, I think, is “I’m not going to name the companies because that’ll create a level of scrutiny for them and I don’t want to have that.”

It appears that he would like the same standard of lack of scrutiny applied to Rangers as well!

Most prominent and successful businessmen are happy to share their secrets: Trump, Sugar, Branson, and Harvey-Jones. And the ones who are reluctant to are generally less robust in their rejection of such questions than Mr Whyte.

Perhaps, once the Rangers adventure is over and Mr Whyte again has time on his hands, he can write a best seller telling people how to do what he has already done?

 

Back to the Case

Unless the case settles by tomorrow, which is possible, it will move towards a conclusion. It is unlikely that a decision will be produced tomorrow. Sheriff Ross will consider the evidence and produce a judgment dealing with the facts and his legal findings.

Of course judgments are public documents, and often published on the invaluable Scottish Courts website.

A finding in favour of Mr Whyte would be a great victory for him, vindicating him against many of his critics.

However, should the Sheriff find that he was not a credible witness, even if the case is won by Tixway on legal grounds, then this would allow the media to refer to the decision constantly.

In a different context, Jeffery Archer and Jonathan Aitken are regularly described as “convicted perjurers” which they are, even in articles to which the convictions have no bearing at all.

Mr Whyte has staked a great deal on the Sheriff finding that he is truthful. As well as being in the hands of the Tax Tribunal, he will be in the hands of Sheriff Ross.

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8 Comments

Filed under Craig Whyte's Companies, Football, One Stop Roofing Supplies Ltd v Tixway UK Ltd, Rangers

8 responses to “Part 2a of the Craig Whyte + Rangers Catch Up – The Tixway Case and Why Hide His “Phoenix From the Flames” Story?

  1. duggie73

    That’s the fairest and most comprehensive taking to pieces of Whyte’s business credibility that I’ve seen anywhere, by quite a distance…really good piece.

  2. I think I’ve got it. Craig Whyte’s defence appears to be that if Paul Martin is speaking to the Craig Whyte who’s in a Tixway frame of mind, that conversation can’t be recalled by the Craig Whyte who wears the Snowcast hat. And the Snowcast Craig Whyte owes the Tixway Craig Whyte some money too. So Tixway Craig Whyte and Paul Martin need to get together to chase up the Snowcast Craig Whyte for the money which the Snowcast Craig Whyte owes to each of them.
    How many Craig Whyte’s are likely to be called in court tomorrow?

  3. AAAARRGGHH! I committed apostrophe crime in the last sentence. 😦
    I hate that!

    Correction:
    How many Craig Whytes are likely to be called in court tomorrow?

    Now I can sleep.

  4. Chris

    I have managed to find 18 companies that Whyte is or was a director of
    The Rangers FC Group Limited
    The Rangers Football Club Plc
    Team Discounts Plc
    Merchant Strategic Renewal Plc
    Merchant Corporate Recovery Plc
    Merchant Turnaround Plc
    Cairnwell Investments Ltd
    Pritchard Stockbrokers Ltd
    Zemfill Plc – Dissolved
    Intercity Guards Ltd – Dissolved
    Whyte Communications Ltd – Dissolved
    Whyte Forbes Contract Services Ltd – Dissolved
    Whyte Plant Ltd – Dissolved
    Whyte Hire Ltd – Dissolved
    Tixway Uk Ltd
    CSS 1996 Ltd – Dissolved
    USG Ltd – Dissolved
    Iconix Ltd

    To be fair they are hard to find as he is registered at 4 different offices in Glasgow plus Essex, London and his home in Granton on Spey. This is of course just where he had directorships and doesn’t include shareholdings!

  5. eddie rice

    Found an interesting link today between Close Brothers who I believe gave Craig Whyte the loan to finance his continued involvement with RFC.
    http://rangerstaxcase.com/2011/11/02/borrow/
    Merchant House Group where Craig Whyte has almost 30% of the issued share capital through Liberty and Willow International.(Merchant house is also in debt to Craig Whyte’s companies in the form of loan notes etc.)
    http://www.merchanthousegroup.com/rns/issue-of-equity020911

    Simon Eagle of SP Bell fame, FSA fined him a record £2.8m for share ramping.
    http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/2793452/Winterflood-to-appeal-against-4m-FSA-fine.html

    The connection comes from Merchant House Group who were in the finale stages of acquirering SP Bell-
    http://www.iii.co.uk/investment/detail/?display=news&code=cotn:MHG.L&action=article&articleid=5005119
    – at the last minuit it was revealed that Mr Eagle was involved in a complicated fraud. The company he used to commit this fraud were part of Close Brothers, Winterflood Securities.

    A company left out of pocket as a result of this fraud by Mr Eagle was Pershing Securities Ltd. I used bizzy to search for Pershing Nominees and on that site Pershing Securities are listed as the parent company of Pershing Nominees.

    Pershing Nominees are listed as the holding company for shares in Merchant House Group held by Willow Internation, both Willow and Pershing are listed as being non trading companies.
    http://www.merchanthousegroup.com/rns/issue-of-equity020911

    In no way am I suggesting any of the individuals or companies here are in any way involved in any fraudulent activities, I am merely pointing out the links between them that span several years.

  6. Pingback: Craig Whyte, Gold Dealer + LeaveBritain.com or “The Tale of a Suave Bullionaire” | Random Thoughts Re Scots Law

  7. Pingback: Remember One Stop v Tixway UK Ltd – Mr Whyte Has Appealed against the Judgement! | Random Thoughts Re Scots Law by Paul McConville

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