Craig Whyte was warned about taking over Rangers, trial told
CRAIG Whyte was told he would be “mad” to take over Rangers, a court has heard.
Gary Withey and Craig Whyte
It came as the jury trying the tycoon’s fraud case heard the Ibrox club’s so-called “data room”, to be used in the event of the club being taken over, contained just a small number of box files.
Giving evidence for a third day today, lawyer Gary Withey said he warned Whyte that Rangers’ then owner Sir David Murray’s advisers had not been “open and candid”.
The accusations were heard at Whyte’s trial at the High Court in Glasgow.
Mr Withey said he warned Whyte that Sir David Murray’s advisers had not been 'open and candid'
The 46-year-old denies a charge of fraud and a second allegation under the Companies Act in connection with his May 2011 takeover.
I told Mr Whyte that he would be mad to go ahead with the transaction
Corporate lawyer Mr Withey, 52, had worked for English firm Collyer Bristow. He was instructed in the takeover talks having initially met Whyte in mid-2010.
Mr Withey was quizzed about a “data room” set up for any takeover.
The witness said: “I came in to five A4 box files and I was told that was the data room. I was shocked.”
The accusations were heard at Whyte’s trial at the High Court in Glasgow
Whyte’s QC, Donald Findlay, asked Mr Withey if he thought Sir David’s team were being “open and candid”. He replied: “I knew that they were not.”
Mr Findlay referred to two “liabilities” that had been facing Rangers – the so-called Small Tax Case and the Big Tax Case.
He put it to Mr Withey: “In the early stages you had no indications that they existed?”
Mr Withey said: “That is correct.”
The witness also said: “I told Mr Whyte that he would be mad to go ahead with the transaction and he should walk away.
“There were things that we had to discover and it made it uncomfortable having to discover things rather than being told upfront.”
Asked about the discovery of the Big Tax Case, Mr Withey told the court: “I remember having a spreadsheet. I remember having two meetings with their (Murray team) QC.
Whyte denies a charge of fraud and a second allegation under the Companies Act
“But anything else was highly confidential.”
Later, Mr Withey said both tax cases “caused real difficulty”.
Mr Findlay asked him: “So, you are left with saying to your client: ‘Here is the situation, I would walk away but it is up to you.’ That is what you did?”
Mr Withey: “Probably, on more occasions than I care to remember. I thought he was mad.
“I told him to walk away, but, by the time he is going to sign, it is too late... he is going to sign.”
Whyte went on to strike a £1 deal to acquire Sir David’s majority stake in Rangers.
The trial continues.