One Stop Roofing v Tixway UK Ltd – Craig Whyte’s Company Wound Up – A Case for His “Public Examination”?

I have written at some length about this case. You can find all of my posts about Tixway UK Ltd here.

This company was formed in 2007 whilst Mr Whyte was a disqualified Director. His now estranged wife, Kim Whyte, was therefore the sole director until she resigned to be replaced by her husband in 2008.

Craig Whyte in happier times, as winner of Bow Tie Wearer of the Year

One Stop Roofing Supplies Ltd had the misfortune to become involved with Mr Whyte through a company run by a Mr Keatings, a friend of Mr Whyte. Mr Keatings’ company needed to buy roof materials but could not get an appropriate line of credit. Mr Whyte stepped up to the plate and agreed that his company, Tixway UK Ltd, would pay for the materials used by Snowcast, Mr Keatings’ company. The business was owed over £85,000, which was a serious sum to be due.

Craig Whyte and His Court Actions – A Quick Update, including Andrew Ellis v Whyte?

Mr Whyte is already embroiled in litigation personally, and through several of his companies.

However, the potential is there for even more expensive and lengthy litigation.

Let’s have a quick look, shall we?

 

Craig Whyte v the BBC and Mr Burns of the Insolvency Service

On 18^th February 2012, the Scotsman reported that Mr Whyte’s much threatened court action against the BBC had been raised. This stemmed from the BBC Inside Story programme in October.

However, since then I have heard and seen nothing about the case.

As the media has written far more serious and damaging stories about Mr Whyte since then, one wonders if he has decided simply to let the matter drop.

As I have mentioned before, I saw little prospect of success in this case, but even if he did win his claim, what damage can there be to his reputation now?

For good or ill, Mr Whyte’s reputation would seem to be worth little.

The article quotes a spokesman for BBC Scotland confirming it had received a writ from Mr Whyte and saying: “We stand by our journalism, all the allegations made, and we will defend our action vigorously.”

Carter Ruck, the esteemed libel firm, still refers on its website to advising both Rangers and Mr Whyte in connection with the BBC programme. One assumes that we will not see an action raised by Rangers against the BBC.

Will Whyte v BBC ever see a court hearing? I doubt it.

 

Kim Whyte v Craig Whyte

Mrs Whyte took her estranged husband to court for an award of aliment (maintenance). This case settled in February.

However, Mr Whyte paid his first payment late, and did not make his second, so the case went back to court in March, as reported by the Daily Record.

The reports indicate that an order was made against Mr Whyte to pay his wife aliment of £5,000 per month, and in addition, it seemed that Mr Whyte was not represented at the March hearing.

He was, and presumably still is, represented by Harper MacLeod Solicitors in this case, as in another noted below.

It is an interesting fact that Harper MacLeod has been engaged by the football authorities to investigate contract and registration issues at Rangers. Some have suggested there is a “conflict of interest”, as Harper MacLeod also acts for Celtic.

The fact that the firm acts for the Chairman if a company it has been engaged to investigate is not, as far as I am concerned, a sign of concern, but rather indicative that the procedures and processes that HM has in place to prevent conflicts occurring, including use of Chinese Walls etc are robust and effective.

In due course Mr and Mrs Whyte might return to court for a divorce action, but a prudent businessman like Mr Whyte would do his utmost, one imagines, to reach a mutually agreeable settlement with his wife, rather than have more arguments aired in court.

Remember One Stop v Tixway UK Ltd – Mr Whyte Has Appealed against the Judgement!

We have seen the release by Duff & Phelps of their comprehensive report regarding Rangers. I suspect that the detail therein is far more than many expected, even if it raises a great deal of questions about the previous involvement of MCR with Rangers/Mr Whyte/Liberty Capital etc.

It also details, in stark terms, the effects on businesses, many being small traders, of Rangers’ financial mismanagement. Whilst the big creditors, like Ticketus and HMRC get the most publicity, there are many smaller creditors to whom the unpaid sums, and the prospect of a “pennies in the pound” CVA will cause problems.

For example, the Copland Road newsagent owed over £500 won’t, one hopes, go bust for that, but that is a decent chunk of income lost.

Many of these creditors will have been dealing with Rangers in good faith, and taking the general information from the media, would have had few concerns. And anyway, they might have thought, it is Rangers we are dealing with here!

All of which brings us back to Mr Whyte and Tixway UK Ltd.

I have written about this case before here and here.

£89,127.18 is the sum owed to One Stop. That, for any business, is a lot of money, especially as this has been due since 2008. It is the sort of debt which can affect the stability of a business, and the jobs of those employed there.

You may recall that Mr Whyte’s evidence was shredded by Mr Clark QC for One Stop, and Sheriff Ross found against the company owned by the “wholly unreliable” witness, Mr Whyte.

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 10^th January 2010. This indicated that he had moved from Castle Grant to Eaton Place. However, he did not notify Companies House until 27^th 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 16^th 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 31^st 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%?

 

 

Sheriff Ross’ Decision in One Stop v Tixway UK

I have been able to upload the decision of Sheriff Ross.

It is in 4 parts.

Click on each link to download and view.

Opinion Part 1

Opinion Part 2

Opinion Part 3

Opinion Part 4