Tag Archives: Tixway UK Ltd

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 18th 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. Continue reading

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Filed under Administration, BBC, Craig Whyte's Companies, Daily Record, One Stop Roofing Supplies Ltd v Tixway UK Ltd, Rangers, Whyte v Whyte

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. Continue reading

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

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

The Tixway Judgment – It Is Even Worse for Craig Whyte Than First Reported!

 

I blogged yesterday about the result of the One Stop v Tixway UK case and the defeat for Mr Whyte’s company, together with the scathing comments by Sheriff Ross rejecting Mr Whyte’s evidence as “wholly unreliable”.

 

It is hard to believe but actually the press coverage yesterday and today has actually been a lot more favourable to Mr Whyte than it could have been. I have rarely if ever read a judgment which is so damning as to the testimony of a witness. One gets the feeling that after confirming his name to the Sheriff, Craig Whyte struggled to say anything else which Sheriff Ross went on to accept as reliable.

 

This is one occasion where an accumulation of legal contacts has proved invaluable as I am lucky enough to have received a copy of the judgment. I will see if I can get a link to it when back at my own PC.

 

As Sheriff Ross took 38 pages to deal with the matter, I propose only to refer to “edited highlights”, and indeed, as far as possible, only to those relevant to Mr Whyte. It must be said though that, having seen what defence was advanced on his behalf and what his spokesman said differently at the raising of the action, his behaviour in denying the claim is entirely deplorable, and could have had very serious effects for a business which had the misfortune to become financially involved with him.

 

Mr Martin and Mr Jenkins, who run One Stop, are to be congratulated for their tenacity and for sticking to their guns to the bitter end. Many would have been frightened away as Mr Whyte became an ever more notable figure in Scotland. There might even have been thoughts that his role meant that he would not risk his credibility by denying a debt which in fact he knew to be due.

 

Mr Martin showed the resolve in pursuing this case which he has been instilling in Albion Rovers, of which he is manager. Perhaps this case will coincide with a good run for the Wee Rovers!

 

 

Summary of the Facts as Found by Sheriff Ross

 

The Sheriff found various issues as fact from which the following matters are extracted.

 

Mr Whyte was the sole director of Tixway UK Ltd. His father, Thomas Whyte, “also assists in the defender’s business affairs”.

 

Snowcast Ltd was a company run by Mr Chris Keatings and Mr James Snowball. Snowcast had obtained a good contract from Connaught (contractors to Glasgow Housing Association) to carry out roofing works on GHA properties. However, they needed credit to get the supplies. They had an £8,000 per month credit line from One Stop, backed by credit risk insurance. This was not enough to supply the contract properly. Snowcast were also late in paying One Stop.

 

In early 2008 Mr Keatings and Craig Whyte discussed how to resolve the position. As a result there was a meeting at One Stop’s premises on 29 April 2008 involving Messrs Jenkins, Keatings, Whyte and Snowball.

 

At this meeting Mr Whyte agreed that Tixway UK would become the customer, thus allowing One Stop to relay on Tixway’s credit rating. At this meeting, Mr Whyte signed One Stop’s terms and conditions, authorised a credit application in Tixway UK’s name and instructed One Stop to send its invoices to Castle Grant, Mr Whyte’s residence.

 

A credit limit of £75,000 was agreed, backed by insurance, in respect of Tixway UK. Deliveries recommenced to Snowcast at various sites in Glasgow. The invoices were sent to Castle Grant.

 

This continued until May 2009. Mr Whyte’s staff received all the invoices and Mr Whyte was aware that they were still being sent to Castle Grant.

 

Snowcast UK Ltd which had taken over the assets and business of Snowcast Ltd made payments to One Stop without seeing invoices. Mr Whyte had unrestricted access to the bank account of Snowcast UK Ltd and was able to move funds into and out of the account.

 

Mr Whyte made various payments to Snowcast UK as “loans” and took out various sums from the Snowcast UK bank account.

 

As a result of problems with the main contractor, Snowcast were still late in settling bills. Mr Jenkins was re-assured by Craig Whyte and his father that they would be paid. Finally in January 2009 Craig Whyte agreed to repay the debt at £5,000 per month. In March 2010 Tom Whyte told One Stop to send the invoices now to Tixway UK’s registered office in Glasgow. This duly occurred.

 

By June 2010 payments stopped. Mr Whyte was asked to sort things out., Nothing more was paid.

 

 

The Decision

 

The Sheriff found that Mr Whyte had agreed that Tixway would pay the Snowcast bills, and accordingly ordered that company to pay £86,127.36 plus interest at 8 per cent from the raising of the action till payment is made. A later hearing will decide who will pay the costs of the case.

 

 

The Evidence – Robert Jenkins

 

Robert Jenkins gave evidence for the Pursuer. Mr Whyte was introduced to him by Mr Keatings in April 2008 as “a successful entrepreneur”…“who would provide backing for Snowcast.”

 

Mr Whyte signed terms and conditions and approved the credit insurance application.

 

Mr Jenkins was asked if in fact what Mr Whyte had done was to sign as a customer for goods to be delivered for the renovations on Castle Grant, and the credit agreement reflected this.

 

Mr Jenkins denied this. He stated that the materials were mainly mass produced concrete roof tiles, costing around £6,000-£7,000 for 1,000 tiles. As Mr Jenkins said, £75,000 credit would buy a very large amount of concrete. These tiles were suitable for council houses but not for a listed castle.

 

From April 2008 to May 2009 hundreds of invoices were sent to Castle Grant, and paid for by Snowcast. By then unpaid bills were racking up, and Mr Jenkins was told by Mr Keatings that this was due to problems with Connaught. Mr Jenkins took this up with Craig Whyte and his father Tom Whyte, and was told there was “nothing to be concerned about”.

 

In 2010 Craig Whyte agreed to repayments at £5,000 per month, but after one payment in April, no more were forthcoming.

 

Mr Jenkins met both Messrs Whyte in their London office and was reassured that they were good for the money. Craig Whyte never denied the money was due.

 

There were between 600 and 800 invoices sent to Tixway, whether at Castle Grant or Bath Street, although addressed, as per Mr Whyte’s instructions, to Snowcast.

 

These were VAT invoices but Mr Jenkins did not know who reclaimed the VAT.

 

One Stop did not claim their insurance as this had lapsed. Mr Jenkins had expected that Mr Whyte would stick by his agreement and by the time it was clear he was not going to do so, it was too late to claim.

 

Mr Jenkins stated that on 29th April 2008 he did not know that Mr Whyte owned a castle, nor was the caste ever mentioned as regards supplies.

 

Mr Jenkins was asked whether deliveries had actually taken place, but this line of questioning was stopped by the Sheriff who said “It is not part of the defence that these deliveries were not made, or that the sum sued for is not genuinely accrued for supplies sold.”

 

 

The Evidence – James Snowball

 

Mr Snowball gave evidence for One Stop. He saw that the Connaught/GHA connection was a potentially lucrative one, but by early 2008 Snowcast could not cope with the cash flow demands.

 

Mr Keatings introduced Mr Snowball to Craig and Tom Whyte. The Whyte’s then met with Connaught, assuring them that “finance would not be an issue, if all the work was issued to Snowcast”. Mr Snowball thought the income from the contracts would increase from £300,000 per annum to over £2 million.

 

Craig Whyte “said that he was interested in putting something back into the community.”

 

Mr Whyte told Mr Snowball when the new company, Snowcast UK Ltd was being formed, that he did not want to invest in Snowcast Ltd “where something could come and bite him”.

 

Instead he wanted a “clean, new company”.

 

He also insisted that the company needed to have a gross tax certificate, where payments were received gross rather than having 20% advance tax deducted, for cash flow reasons.

 

Craig Whyte said that the business could be done under the Tixway name, and that it would become Snowcast’s parent company as a result.

 

Once an invoice was sent to Castle Grant, it would be paid by Snowcast. Snowcast’s accountant was said to have been unhappy at the arrangement, but he was told by Craig Whyte to do what he was told.

 

 

The Evidence – Paul Martin

 

Mr Martin was happy to deal with Tixway UK as he had seen their accounts and they had a healthy positive asset balance.

 

No claim was made on the insurance because there was clear communication between the parties, and Mr Martin was confident of the matter being resolved. At that time he saw no reason to doubt this.

 

None of the invoices were ever queried. At meetings with Craig Whyte and with Tom Whyte, the debt had never been denied.

 

 

The Evidence – Chris Keatings

 

Mr Keatings was the first witness for the defender.

 

He stated the importance of the gross payment method for Snowcast to help cash flow. Rather than have 20% tax deducted at source, payments were made gross to be accounted for in an end of year tax bill. However monthly tax returns were required. Three late returns would remove gross payment status.

 

Mr Keatings stated that Tixway UK did not invest in Snowcast, despite Mr Snowball thinking it had taken a 51% share.

 

Mr Keatings said that he could not become a director of Snowcast UK Ltd as having been a director of Snowcast which had lost its gross payment status, it would not be given to a company where he was a director. His wife therefore was appointed.

 

He said that Tixway “dripped in” money to meet bills, but Snowcast UK was always in difficulties due to the Connaught payment problems.

 

Mr Keatings told the court that he would do anything to keep the business going and his wages coming in, and that he did whatever Mr Whyte asked him to do.

 

Mr Keatings stated he had known Mr Whyte since 1998.He had come back on the scene in 2008. Mr Whyte saw potential for a big business here in the form of Snowcast.

 

He told the court that he had organised deliveries of materials to Castle Grant but these were not from One Stop.

 

Mr Keatings knew nothing of the arrangements within Tixway. As he put it Craig Whyte was of the nature that ”If you don’t need to know, you don’t get to hear.”

 

Craig Whyte had complete access to the Snowcast UK bank account to do as he thought fit. He took money out and put money in as he pleased. He thought that Tixway owned Snowcast UK but he was not sure. In any event, Craig Whyte “called the shots”.

 

He stated that Craig Whyte had put in £150,000 and taken out £171,500. He described the operation of Snowcast near the end as “a bit kamikaze”.

 

 

The Evidence – Craig Whyte – Examination In Chief

 

His starting point was to say the he did not recall signing the terms and conditions referred to but he accepted it was his signature.

 

He told the court this was to do with refurbishing Castle Grant.

He recalled that he had been asked to help Snowcast with cash flow. He mentioned a £200,000 facility. He denied being a shareholder via Tixway UK.

 

He told the court that he had known Mr Keatings for 20 years.

 

He did not accept that he would have entered the arrangement alleged by One Stop. He claimed that he would not have done so as it would have made no economic sense. He had no recollection of discussing credit limits.

 

He told the court that after the first batch of invoices (remember there were between 600 and 800) arrived at Castle Grant, he insisted they be redirected to Mr Keatings. He had no recollection of ever seeing any more. However, as he only stayed at Castle Grant 3 or 4 nights a month they could have arrived when he was not there.

 

He stated that Tixway UK did not reclaim VAT on the invoices.

 

When asked about the invoices being sent to Bath Street, he told the court that this must have been an error.

 

As regards the Snowcast bank account, he initially denied having any involvement with that before accepting that he got his interest and capital back that way.

 

As far as the meeting at One Stop’s offices went, he maintained this was not in connection with Snowcast. He described the alleged invoicing arrangement as “complete nonsense”.

 

He accepted this had been a business opportunity for Tixway UK, but denied that company had become the customer – if it had, then it might as well have done the work itself!

 

 

The Evidence – Craig Whyte – Cross-Examination

 

Counsel for the Pursuer sought to strike directly at Mr Whyte’s veracity. He was asked if Mr Jenkins had pressed him for payment. Mr Whyte denied this.

 

He was then shown emails and text messages which clearly demonstrated Mr Jenkins doing that very thing.

 

An email exchange was produced wherein Mr Whyte stated that he was “always happy to help.” He made no denial in these exchanges of the debt, though he maintained in court that it was possible that he had.

 

In October 2010, when Mr Jenkins suggested reinstating the £5,000 per month arrangement, Mr Whyte did not deny this, but instead suggested sitting down to discuss the matter.

 

When asked again about Mr Jenkins seeking payment, which he had earlier denied, Mr Whyte’s response was that there was no debt due.

 

He was asked if his wife had been a director of Tixway UK and replied “I believe so”.

 

He could not recall any actual orders of materials for Castle Grant. However he repeated that it was “complete nonsense” that he had accepted liability for Snowcast.

 

He denied having access to the Snowcast account, before finally stating “It is a possibility I had direct access to the Snowcast account.”

 

He accepted that there was no loan agreement in place with Snowcast and that he had been able to authorise payments by Snowcast.

 

He could not recall how much had been put into Snowcast, but he thought it was more than had been got out. He “made no apology” for asking for repayment.

 

He could not explain why 600-800 invoices were sent to Castle Grant. He stated that he “responded” to them.

 

As far as VAT was concerned, he said he could not comment on it, but that Tixway UK had never reclaimed the VAT.

 

He told the court that he attended the Connaught meeting not to ask for all the work to go to Snowcast but as part of his due diligence.

 

Any agreement he signed was for works to Castle Grant. He again denied being chased for payment by Mr Jenkins, and stated that “one of my staff” might have had access to the Snowcast bank account. He agreed that he was calling Messrs Jenkins, Keatings and Snowball liars (even though Mr Keatings had been called as a defence witness).

 

He accepted that he sometimes required access to bank accounts in smaller companies to do with his investments. This allowed monitoring of cash flow and the taking of payments when due.

 

 

Sheriff Ross’ Criticism of Mr Whyte’s Evidence

 

Reading the decision it becomes apparent that, very quickly, the Sheriff began to be exasperated by Mr Whyte. No criticism of Sheriff Ross is intended by that statement, and I am sure no sign was given to the parties to suggest what his view was.

 

However, the decision shows how the Sheriff’s mind was moving.

 

At paragraph 86 the Sheriff states, as regards Mr Whyte’s response to an email asking about the debt, “This, in my view, is a striking contemporary failure to deny the debt or at least to query the arrangement which, according to his evidence, he had never agreed.”

 

At paragraph 87, Sheriff Ross states in respect of Mr Whyte’s response that no debt was due to the question about Mr Jenkins pursuing it, that this reply “didn’t answer the point.”

 

At paragraph 88, as regards the answer “I believe so” concerning his wife’s role as director the Sheriff had this to say:-

 

In my view it was hard to see why such a basic query should elicit such an indirect, equivocal answer. It was becoming apparent to me, by this point, that Mr Whyte was being careful to be as non-committal as possible in his answers… It had the effect of detracting from his evidence.”

 

At paragraph 106 the Sheriff summarises the issue re the crucial meeting of 29th April. As Tixway’s lawyer put it, either One Stop was right, or it was engaged in a deliberate fraud upon its insurers. The Sheriff rejected Mr Whyte’s evidence on this as unreliable.

 

Mr Whyte’s evidence was that all that was ever on offer to Snowcast was a loan. However, at paragraph 112, the Sheriff describes that position as, “at least, somewhat improbable”. That is as complimentary about his evidence as Sheriff Ross gets. When “somewhat improbable” is the high spot, I think it makes clear how badly the witness has been received.

 

At paragraph 117 the Sheriff further considers the meeting on 29th April and the different accounts thereof. I think it is worth setting out that paragraph in full:-

 

“Mr Whyte’s evidence as to the meeting was clear only on one point, namely that the defender was never to be the customer. On every other issue his evidence was vague and somewhat ambiguous. It was difficult to know, at time, if his answers that he “had no recollection” of various points meant that events definitely did not occur or that they might have occurred but he simply could not remember. His demeanour was guarded throughout and his answers as short as he could manage. It is possible that he may genuinely have a poor recollection of the meeting but that is double-edged – it means it is more difficult to accept his evidence when he seeks to be clear that there was “absolutely not” such an agreement.”

 

At paragraph 118 he dismisses Mr Whyte’s evidence that the Snowcast credit limit was not discussed at a meeting whose sole purpose was to extend Snowcast’s credit limit.

 

At paragraph 120, discussing the 600-800 invoices sent to Castle Grant, with Mr Whyte’s evidence being that, after the first batch, this was dealt with, the Sheriff comments:-

 

Logically, either Mr Whyte’s staff are wholly incompetent, or disregarded his instructions, or Mr Whyte’s evidence is unreliable.”

 

I think the Sheriff has put that most charitably!

 

At paragraph 122 he describes Mr Whyte’s evidence as “inherently improbable”.

 

At paragraph 124 Mr Whyte’s evidence about not recalling discussion about the credit limit is described as “improbable”.

 

At paragraph 125 he addresses the invoices being sent, following upon the meeting, to Castle Grant. He states there is no plausible explanation for this other than an express instruction from Mr Whyte himself. Mr Whyte’s comment that he had “no idea” why they were sent there is described as “contradicted by all other evidence” and “inherently implausible”.

 

At paragraph 125 the Sheriff rejects Mr Whyte’s evidence about what he did with the invoices as equally implausible. “The only possible explanations are that Mr Whyte gave no such instructions (to send the invoices to Snowcast) or that his staff did not receive it and continued to process the invoices anyway or that his staff are incompetent. The last two options appear unlikely.”

 

At paragraph 127 the Sheriff deals with Mr Whyte’s argument that his dealings with One Stop were to do with repairs to the Castle. The Sheriff points out that Mr Whyte agreed that “the concrete red house tile would be wholly unsuitable for a listed building like Castle Grant.” Mr Whyte’s evidence did not state that One Stop ever delivered anything to the Castle anyway!

 

At paragraph 128 the Sheriff rejects Mr Whyte’s evidence about his relationship with Snowcast. Here the Sheriff prefers the testimony of Mr Keatings (who, don’t forget) was a defence witness which disagrees with that of Mr Whyte. The relationship with Snowcast was not at arm’s length and the Sheriff accepts that Mr Whyte had direct access to and use of the Snowcast bank account.

 

At paragraph 129 the Sheriff rejects Mr Whyte’s evidence that a guarantee would have been the way ahead, but that he would not have offered one anyway. He states that that explanation “tends to mislead.”

 

The alternate scenario offered by Mr Whyte is dismissed as inherently unlikely ever to work and the Sheriff wonders what Mr Whyte’s point was in mentioning it at all!

 

At paragraph 130 he dismisses Mr Whyte’s scenario that he signed a credit agreement for supplies to Castle Grant, but that One Stop took advantage of this to get credit insurance without telling him. The Sheriff states that Mr Whyte could not believe that scenario! In respect of the unlikely scenario, the Sheriff states that Mr Whyte is not naïve enough to believe I.

 

At paragraph 131 the Sheriff dismisses Mr Whyte’s evidence regarding being asked for payment as, at best, inaccurate.

 

At paragraph 132 the Sheriff deals with Mr Whyte’s denial of any £5,000 per month deal by referring to bank statement showing such a payment in April 2010, with no credible alternative explanation offered.

 

At paragraph 133 the Sheriff dismisses any argument that the whole thing was a misunderstanding, but points out that not even Mr Whyte tried to argue it was.

 

Paragraph 135 is another which I wish to quote in full:-

 

I would mention one other point, namely the VAT question. The invoices were VAT invoices and one would expect an attempt to reclaim the VAT. Whoever tried to reclaim the VAT may, in my view, throw some light on who the customer truly was. There was however no evidence and this point cannot be take further. Mr Whyte denied reclaiming VAT but there was no evidence that Snowcast did either. It remains an unknown factor.”

 

At paragraph 136 is the only silver lining – the Sheriff disregarded the evidence snout Mr Whyte’s disqualification, as irrelevant.

 

Legal Point

 

Sheriff Ross dismissed as ill-conceived the argument that any confusion between Snowcast and Snowcast UK was relevant to the case. Despite the similarity of name, all the parties knew what they were dealing with.

 

It might only have been outside parties confused by the duplication of names, and that would have been entirely coincidental. (NB The last point is mine, and not one stated by Sheriff Ross.)

 

Conclusion

 

The Sheriff then ends by giving the quotes which were on the front pages of Saturday’s papers. All in all a sorry outcome for Mr Whyte.

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Filed under Civil Law, Courts, Craig Whyte's Companies, One Stop Roofing Supplies Ltd v Tixway UK Ltd

More Problems for Craig Whyte – Tixway UK Ltd Threatened With Striking Off

Tixway UK Ltd is the company of which Mr Whyte is director, having taken up that position on the expiry of his director’s disqualification. The company had been formed by his now estranged wife, and Mrs Whyte had been the sole director until she stepped down and her husband took over.

Tixway UK Ltd has been busy in Glasgow Sheriff Court recently defending an action raised against it by One Stop Roofing Supplies Ltd.

Mr Whyte gave evidence in court. It could be thought that perhaps he has memory problems, as he told counsel for One Stop that he could not recall, without seeing the paperwork, why he was banned for seven years in 2000 from being a company director.

Another sign of forgetfulness is indicated by a document which has just appeared on the Companies House website.

This relates to Tixway UK Ltd and can be viewed here – Tixway strike off.

As can be seen, it is the warning that, under s1000 of the Companies Act, the company will be struck off the Companies Register in 3 months and dissolved, unless cause to the contrary can be shown.

S1000 deals with situations where the registrar “has reasonable cause to believe that a company is not carrying on business or in operation”. A letter is sent to the registered office asking for confirmation of the position. If, after one month, there is no reply, a further letter is sent. In the absence of a response within one month to the second letter, the letter referred to above is sent.

Interestingly, this is the third consecutive year that the striking off procedure has been put into process for Tixway UK Ltd. On the previous 2 occasions, dissolution was prevented close to the deadline.

If nothing more is done to prevent striking off, then any assets of the company will be declared “bona vacantia” and paid over to the Scottish Consolidated Fund, effectively the Scottish Executive’s bank account. Perhaps, in view of the sums involved, this is Mr Whyte’s way of making sure that tax paid in Scotland stays in Scotland

Bearing in mind that Tixway UK Ltd’s last accounts, dated January 2010, disclosed that the company held over £2.5 million worth of assets, then I am sure Mr Whyte will want his administrative colleagues to get the finger out and to reply to the Registrar! tixway–Annual-Accounts

Perhaps these things simply slip his memory, as did the reason for his disqualification.

It constantly amazes me that, for all of his undoubted business and entrepreneurial skills, Mr Whyte’s grasp of administration and time limits laid down by law seems to be so lacking. Alternatively, his administrative systems require a substantial overhaul.

Of course, if the assets have been used, and there is nothing in Tixway UK Ltd any more, the striking off process might result in One Stop, if successful in their court action, receiving nothing. I am sure however that Mr Whyte would not seek to make deliberate use of this procedure to have his company avoid paying debts due by it.

Sadly, as the company has not lodged any accounts since those for year ended January 2010, it is impossible to say what might have happened to the £2.5 million in assets which existed then.

 

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Filed under Companies Act 2006, Craig Whyte's Companies, One Stop Roofing Supplies Ltd v Tixway UK Ltd, The Company Directors Disqualification Act 1986.