THE lawyer who advised Craig Whyte on his purchase of Rangers told him he was “mad” to go ahead with the deal and should walk away, a court has heard.
Gary Withey was giving evidence at Whyte’s trial at the High Court in Glasgow.
Under questioning by defence QC Donald Findlay, Withey, who worked for London tax specialists Collier Bristow, said he was initially given no indications about the club’s two tax liabilities – the so-called small and big tax cases. Findlay asked: “In the early stages you had no indications that they existed?”
Withey replied: “That is correct.” He added: “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 up front.”
Whyte paid Sir David Murray’s group £1 for Rangers but also agreed to pay an £18 million bank debt, a £2.8m tax bill, £1.7m for health and safety issues, plus £5m for players and £5m in working capital. The charges against Whyte allege that he had only £4m available from two sources at the time but took out a £24m loan from Ticketus against three years of future season ticket sales.
Withey told the court that executives of the Murray Group, then in control of Rangers, had set up a “data room” for viewing confidential files.
He said: “I came in to five A4 box files and I was told that was the data room. I was shocked.”
Findlay asked if he felt the Murray Group was being “open and candid”.
Withey said: “I knew they weren’t.”
The emergence of the big tax case also came as a shock, according to Withey. It is still being decided by the UK Supreme Court, with the liquidated oldco Rangers denying liability for tens of millions in back taxes.
Asked by Findlay if there were “a great number of people” aware of the Ticketus deal before the day the sale of Rangers was concluded, Withey replied: “Correct. Yes. Absolutely no doubt about it. Probably more than 80 people knew about it.”
Whyte denies acquiring Rangers by fraud and a second charge under the Companies Act. The trial continues.
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