Category Archives: Merchant House Group

Tixway UK Ltd – More Breaches of the Rules By Craig Whyte? Even More Fun with Forms!

As if there was not enough to keep me busy, I noticed a mention of Tixway UK Ltd on my Companies House monitor.

My reader will recall that this company is owned by Mr Craig Whyte, who was, I note, referred to by the BBC as the ex-chairman of Rangers, yesterday.

One Stop v Tixway UK Ltd

Tixway UK Ltd lost a court case and has been ordered to pay One Stop Roofing Supplies, one of whose directors is Paul Martin, manager of the mighty Albion Rovers, in excess of £90,000.

Craig Whyte’s evidence was unconvincing to Sheriff Ross, and the judgment can now be read on the Scotcourts website here.

One of the most experienced civil court practitioners in Glasgow described the judgment to me as follows:-

“Sheriff Ross leaves Whyte without a name..that’s as scathing an assessment of a witness’s evidence that I have possibly ever seen in my quarter of a century of court practice.”

Bearing in mind Mr Whyte’s/White’s name confusion, that would suggest the Sheriff took two names from him – now that is severe!

This ties in with the defamation action which has now been served on the BBC, notwithstanding my clear and unshakeable belief there would never be such a case. I plan to write about that over the weekend.

Strike Off of Tixway UK Ltd

Moving on with Tixway UK Ltd, this company had, when its accounts were last prepared, net assets over £2 million. However, because of delay in responding to Companies House queries and tardiness in lodging official returns, the Registrar of Companies had started, for the third year in a row, proceedings to strike Tixway UK form the Register of Companies.

Today the Companies House website disclosed the existence of this – Diss16. This temporarily halts the strike off process. It can be brought by directors intimating that the company is still active, or by a creditor advising that it had an unsatisfied claim.

In any event, the strike off process is halted for now.

Craig Whyte’s Change of Address

As I was looking at the Tixway UK Ltd page on Companies House, I thought I would look at a couple more documents.

First of all, I noted that “Craig Thomas Whyte” date of birth 18/1/1971, was resident at Castle Grant when he became a director on his wife’s resignation.

However, in 2010 his address changed from Castle Grant to 82 Eaton Place, London. The latter is what we in Scotland would call a tenement, although, being in Belgravia, I am sure there is another name for it.

According to the CH01 filed at Companies House, Mr Whyte changed his address on 10th January 2010. This indicated that he had moved from Castle Grant to Eaton Place. However, he did not notify Companies House until 27th September 2010.

Section 167 of the Companies Act 2006 requires notification within 14 days of a change in a director’s particulars, including a change of address. Under s167 (4) it is an offence on the part of the company, and of any officers of the company who are in default, the offence being punishable by a fine.

Rarely will Companies House seek a prosecution on such a ground, unless the miscreant was a serial offender, for example. This seems to be the first time that Tixway UK Ltd, apart of course from its annual failure to respond to Companies House, was in breach of s167. Mr Whyte, as a consequence no doubt of his busy business life, or lack of attention to detail by his administrative staff, has had a number of occasions where relevant paperwork has been completed in error, or not at all.

For example, I have not checked thoroughly, but I have not yet seen a notice changing Mr Whyte’s personal address to Eaton Place in connection with any other companies where he was a director in 2010.

In addition, when Mr Whyte formed two companies registered at an address connected with Wulstan Earley, as mentioned in my blog here, he gave his address, as of March 2010, as Castle Grant.

This seems to suggest that he moved to Eaton Place in January 2010, as per his form lodged at Companied House in September 2010, but must have moved back to Castle Grant by March 2010.

However, he has not notified Companies House of the change, and if he has done so, then the Registrar has lost or mis-filed the information.

The last Annual Return for Tixway UK Ltd, lodged on 16th January 2011 – Annual Return – also lists Mr Whyte as resident at Eaton Place.

As Mr Whyte is the sole director, and the Company Secretary is a Company, and not a person, he has ultimate responsibility for the accuracy of any and all documents issued to Companies House by Tixway UK Ltd. Even if the lapse is by a member of his staff, Mr Whyte, as the only flesh and blood officer of the company, would be the person prosecuted in the event of criminal proceedings being taken.

The Tixway UK Ltd Annual Return

Having mentioned the Annual Return (the next one being late), it also raises a couple of interesting points.

First of all, to remind my reader, Tixway UK Ltd has its Registered Office at 65 Bath Street, Glasgow. The Company Secretary, according to the Annual Return, also has its Registered or principal Office there. The Company Secretary is Liberty Corporate Ltd.

Liberty Corporate Ltd is however listed on Companies House as follows.

Name & Registered Office:
LIBERTY CORPORATE LTD
48 SKYLINES VILLAGE
LIMEHARBOUR
LONDON
E14 9TS
Company No. 05831290

It is a dormant company, whose only director is Thomas Whyte, believed to be Craig Whyte’s father. The company has issued share capital of £1,000 and is solely owned by Liberty Capital Ltd.

Duedil.com lists the business address for Liberty Corporate Ltd as :-

Suite 5 2nd Floor Viking House
Lodge Lane Daneholes Roundabout
Grays
RM16 2XE

Can a dormant company act as a Company Secretary? I believe it can, but could not charge a fee for any work done in that capacity, as this would require to be show in the company’s books and thus render it no longer dormant. However, I have not had the time to check that through and would be happy to be enlightened further on the point.

Back to the Annual Return – the only director of Tixway UK is Craig Thomas Whyte, born January 1971, and resident at Eaton Place. Remember this was sent to Companies House in January 2011.

I don’t recall any of Mr Whyte’s publicity, after November 2010 when he was first revealed as Rangers’ saviour, as referring ton him being resident in London, although in the One Stop case he stated he was only at home in Castle Grant 3 or 4 days per month.

Who owns Tixway UK Ltd? Mr Whyte does not, at least directly, according to the return.

That tells us that there are 1,500,100 Ordinary Shares held by “N/A Liberty Capital (sic)” and 500,000 3% Non-Cumulative Preference Shares held by Merchant House Group PLC.

Merchant House Group PLC and Tixway UK Ltd

Merchant House Group PLC  is not a company where Mr Whyte is a director, although he has very close connections with it.

As a Merchant House Group PLC circular put it in 2010, the company was very reliant on Liberty Capital via Tixway UK Ltd.

“Approval for issue shares upon any conversion of the Tixway Convertible Loan Notes

On 30 December 2009, Liberty transferred £500,000 of 10% preference shares in Tixway (the “Tixway Preference Shares”), a wholly owned subsidiary of Liberty to Merchant Capital Ltd, a wholly-owned subsidiary of the Company. This investment holding of the Tixway Preference Shares strengthens the subsidiary’s balance sheet and capital position, which allow Merchant Capital to continue to comply with the continuing capital adequacy requirements of the Irish Financial Services Regulatory Authority for the establishment of a Dublin-based UCITS fund platform. In consideration of the transfer by Liberty of the Tixway Preference Shares, the Company has issued to Liberty an unsecured convertible loan note of £500,000 carrying no interest and which shall mature in 2015 (the “Tixway Convertible Loan Notes”).

The Tixway Convertible Loan Notes may be converted into new Ordinary Shares at 0.5p each at any time. Shareholder approval for the issue of up to 100,000,000 New Ordinary Shares will be required for this loan note to convert. In the event that Shareholders do not approve the Resolution to enable the issue of these shares, the Tixway Preference Shares will need to be returned to Liberty, and Merchant Capital will need to seek alternative arrangements to satisfy its capital adequacy requirements.

Liberty Capital currently holds 14,223,174 shares equivalent to 5.06 per cent. of the current issued share capital of the Company. Liberty Capital is a ‘related party’ for the purposes of the AIM Rules. For this reason, the issue of the Tixway Convertible Loan Notes is related party transactions under the AIM Rules. The Directors consider, having consulted with Shore Capital and Corporate Limited, the Company’s Nominated Adviser, that the terms of this related party transaction are fair and reasonable insofar as the Company’s Shareholders are concerned.”

I would leave it to the more stockbroker oriented readers to work through what all this means.

However, there are two points I would make.

First of all, the circular refers to 10% Preference Shares. Companies House, as per the Tixway return, thinks they are 3% Preference Shares. Does that make any real difference (and don’t just say 7%!)

It is another instance though of confusion in paperwork related to Mr Whyte’s companies.

Secondly the Merchant House Group PLC annual results statement for the year to 31st December 2009 states that “Finally, Liberty have transferred £500,000 of 10% preference shares in Tixway UK Limited, a wholly owned subsidiary of Liberty, to the Company, which were in turn transferred to Merchant Capital Ltd, a wholly-owned subsidiary of the group, inconsideration for the issue of £500,000 of ordinary shares.”

The earlier statement I quoted does not mention that the shares travelled through MHG PLC, but suggest they went straight to Merchant House Capital Ltd.

Conclusion

What does any of this mean?

A             Mr Whyte’s problems with forms seem to have struck again. Why did he report in September 2010 a change of address in January 2010, when he had, in the intervening period, continued to use his Castle Grant address?

B             Did he change his address to Eaton Place for any other of his companies, and if not, why not?

C             Has the strike off of Tixway UK Ltd been stopped by the company or by a creditor?

D             Why is Liberty Corporate Ltd, the Tixway UK Ltd Company Secretary, shown at an address, which it appears, is incorrect?

E              What, if anything, was the consideration to Liberty Capital for transferring half a million shares in Tixway UK Ltd to MHG PLC or to Merchant Capital Ltd?

F              To whom was the transfer actually made?

G             Were the Tixway shares 10% Preference Shares or 3%?

 

 

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Filed under Companies Act 2006, Craig Whyte's Companies, Merchant House Group, One Stop Roofing Supplies Ltd v Tixway UK Ltd

Wood Hall Realisations Limited + 2 Directors of Merchant House Group

Merchant House Group (MHG) is described in one Investor Briefing in January 2012 as being “well advanced in the process of transformation from an unprofitable small corporate finance house specialising in the currently moribund niche of fund-raising on AIM and PLUS markets into a profitable financial services group focussed on investment products for the UK retail market.”

It is stated, “We particularly note new management has made some excellent deals with administrators of insolvent companies.

The biggest shareholder in MHG is Liberty Capital, holding just over 18% of the shares. One assumes that this is the same Liberty Capital incorporated in the British Virgin Islands and of which Mr Craig Whyte states he is 100% owner.

Two of the directors of MHG are James Holmes and Martin Eberhardt.

Both these gentlemen were directors of Wood Hall Realisations Ltd too. A third director was Mr Aidan Earley; the Earley brothers, Wulstan, Brendan and Aidan all having had business connections with Mr Whyte.

Wood Hall Realisations Ltd is in liquidation. It was a voluntary liquidation. This means that the directors assessed that, when the company was would up, there would be sufficient funds to pay the debtors within 12 months.

However, that did not happen.

I attach copies of 2 documents:- the liquidator’s statement of affairs December 2008 wood_Hall_4.20 and statement of receipts and payments as at December 2011 – Wood_Hall_Receipts_19-12-2011-1

There is a case regarding this company which called today in the Companies Court in London.

 

Wed, 08 Feb 2012

THE DAILY LIST
COMPANIES COURT

THE ROLLS BUILDING
COURT 26
THIRD FLOOR

Before
MS REGISTRAR DERRETT

Wednesday 8th February 2012

Robed

At half past 10
7449/2011       Wood Hall Realisations Limited

The exact nature of that case, which by the case reference would have been initiated last year, is not clear.

However, there seem to be some similarities with the situation of Vital UK, the company in connection with which Mr Whyte was disqualified.

Before I detail them I should say that these similarities are purely superficial and ought not to be taken as implying that, in any way, Messrs Eberherdt, Holmes and Earley have fallen even 1% short in their performance of their Directorial obligations.

If you recall, Vital UK went into voluntary liquidation on the basis that there was sufficient to repay all creditors within 12 months. However, that did not happen and the liquidation process dragged on for some years before being concluded.

One problem was that the director who signed the “Declaration of Solvency” stated that there was over £600,000 of bills receivable, but the liquidator reduced this estimate to only £100,000. As a result a surplus for creditors became a substantial deficit, and the biggest loser was HMRC.

In connection with Wood Hall, we see that the Company went into voluntary liquidation on 26 November 2007.

The liquidation is not yet complete.

The Declaration of Solvency appears to have suggested that there were assets of £1,027,000.

There are declared debts of £836,004.18.

The sums due to HMRC are £821,604.35.

The sums due to trade creditors are £14,399.83.

The winding up cannot be completed yet due to “recovery of debts”.

We therefore have a catering company which, at the time the directors chose to wind it up, had no assets other than over £1 million of book debt owed to it. There was only a liability of £14k to trade creditors, and £821,000 to HMRC.

It went under at the same time as two other companies, at least one of which had Messrs Earley, Holmes and Eberhardt as directors.

As I mentioned, there is no suggestion of wrongdoing here, although one might wonder if Mr Whyte, who owns, through Liberty Capital over 18% of Merchant House Group, has had his confidence shaken by such an outcome for two of the directors of MHG. 

The assiduous BillyBhoy68 has proved yet again that his digging skills are even better than mine!

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Filed under Courts, Insolvency, Merchant House Group, Uncategorized