Judge attacks Sports Direct over RFC damages claim

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Justice Peter Smith 

A High Court judge has accused Sports Direct owner Mike Ashley of “wasting the court’s time,” after a £200k claim for damages against Rangers chairman Dave King was withdrawn from consideration.

The claim, which related to an alleged breach of a confidentiality agreement by King during a TV interview, was originally lodged in June this year. However after being told by counsel for the company that they were no longer requesting financial recompense the judge, Justice Peter Smith, said “”The whole way that the claimants have been conducting themselves … shows that they have been abusing processes of the court.”

Earlier counsel for Rangers, Mr McCormack QC had told the court that a witness statement from Ashley had only been received at 4.55pm on the day before the hearing, a delay blamed on the “festive rush,” in Sports Direct during the Christmas holidays. He added that while Ashley had said in his statement that his business had lost “tens of millions” due to King commenting on the supposed unfairness of Sports Direct’s commercial arrangements with Rangers, financial figures to support this claim were not accompanied by a “statement of truth” to their veracity making them inadmissible in court.

Justice Smith then asked counsel if he was asking him to send Ashley to jail, remarking “you can have your fun with him at the trial,” where the Sports Direct owner is expected to give evidence. Smith then ordered the sections of Ashley’s witness statement that referred to the supposed financial losses to be struck out and asked counsel for Rangers to submit an estimate of their costs over that section of the legal action. McCormack replied that “while we would dearly like the money” this would take time to quantify.

The judge then told the court he would deliver an interim judgment on the issue of King’s statement on Friday and a full trial on the issue would commence on 8 Febuary. He then remarked that his clerk had been receiving emails directing him to “blogs” that had accused the judge of being a member of a masonic lodge. He said he was not a mason and it was also untrue that his wife was a “life-long Rangers supporter.” Smith said the emailer had asked him to take action against the “blogs” but he had decided not to take the matter any further.

Court then rose.

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Rangers win £300k “arrestment” case.

 

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Glasgow Sheriff Court

A Scottish Sheriff has quashed a £300k arrestment order against Rangers ruling that, in his judgment, there is “no immediate risk” that the football club will become insolvent.

The warrant, which was issued on December 31st was on behalf of 802 Works Ltd who claim they are owed the third instalment of an agreed £900k payment for installing WiFi equipment at Ibrox Stadium. However counsel for Rangers argued that this was being withheld due to the equipment not meeting the standards agreed.

Sheriff Miller told the court that while he was satisfied 802 WiFi had a “prima facie” case, as despite the payment being overdue since June 2014 Rangers had only commissioned an expert report into the stadium Wifi in December last year and had not offered a proper defence, he was not convinced the arrestment order was justified as evidence given to him. Miller noted that the RFC annual report had shown that Rangers’ shareholders would “not stand by and let the club go under,” adding that many of them clearly had “deep pockets.” He also noted that no evidence had been presented to the court that Rangers were not paying other bills when they fell due.

A key document in the case was an updated profit and loss statement for Rangers operating company covering the period June 2015 to December 2015. Counsel for 802 Works had objected to this being considered as it was unaudited, however Sheriff Miller said that he had been assured by Rangers that the figures were accurate and said they showed a “significant improvement,” in the business’s financial position with half year losses down to around £500k. This, he said, had “weighed heavily in the balance,” in making his decision.

Court then moved on to the issue of costs with counsel for 802 Works arguing that since the pivotal profit and loss statement had not been presented to the court until the second morning of the hearing his client could not have taken it into account and therefore should not be held liable for the costs of Rangers. Sheriff Miller agreed and ruled that each party would only have to pay their own legal expenses.

A final decision in the dispute is not expected until mid 2017.

802 Works Ltd V The Rangers Football Club Ltd

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A company in dispute with Rangers is asking for £300,000 to be arrested by a Sherriff as it is concerned the club might go bust, a court heard today.

Counsel for 802 Works Ltd, which is currently suing for what it claims are unpaid bills relating to the installation of a WiFi system at Ibrox, told the court that no company can “sustain a loss of £7m-£8m per annum indefinitely,” and claimed that Rangers could go into liquidation before their claim for the cash was decided, which would not be until 2017.

However the advocate representing the club, Mr Wilson, told the court there was “no prospect of insolvency,” and presented financial figures from June to December 2015 which he said showed that the clubs trading position had “improved dramatically in the last 6 months.” He also stated that the Ibrox club had not paid the £300k bill as the WiFi system had “never reached the level agreed,” adding that the Club’s position was that 802 Works was “not entitled to payment until the issue was resolved.

Responding for the pursuers solicitor advocate Simon Catto presented the agreement between the club and 802 Works which said the capacity agreed for the stadium WiFi was 10,000 users at any one time as there was no assumption that everyone in the football ground would be online at the same time. He also told the court that the system had ceased to work in November not because of any action by his client, but instead because the internet service provider, Virgin Media were not being paid. “There was no notice of problems until payment was asked for,” he added.

Mr Wilson, for RFC closed his case by noting the £300k represented only 2% of Rangers’ annual turnover and the club were disputing the bill as “what was specified was not what was delivered.” Catto responded that while the club had £47M in assets, consisting of the stadium, training ground, brand and players “none of that can be turned into cash,” while the business was still operating.

Sheriff Miller ended the hearing by thanking both advocates for their submissions and said he would deliver a judgment on Friday morning (15 January)

Court then rose.

Indictment update

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As readers may be aware I  wrote yesterday I was planning to post the entire indictment in the Rangers Fraud Case taking the view that this is a public document that people are entitled to read.

However I have been contacted by a representative of the judicial service who informed me their considered view is ,that until the indictment is read out in court it remains private and should not be published as it may prejudice a fair trial being held.

I will be taking advice on the matter but as the right of anyone to a fair trial outweighs the right of people to know details of a forthcoming case I will hold off posting for now.

 

 

 

 

 

 

The Indictment Part 1

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[As this is a very long and dense document (and it has to be typed by hand) I’m going to post it in sections..

For legal reasons I will not be including details such as addresses, dates of birth, company numbers etc. These edits are indicated by “….”.]
Craig Thomas Whyte
Martin Withey
David Henry Grier
David John Whitehouse
Paul John Clark
Charles Alexander Green
Sheik Imran Ahmed (known as Imran Ahmed)
You are indicted at the instance of Her Majesty’s Advocate, and the charges against you are that:
001) Between 1 January 2010 and 16 Febuary 2012, both dates inclusive, at the premises occupied by:  The Rangers Football Club plc (“Club”)…Murray MHL limited..Dundas and Wilson LLP…Lloyds Banking Group…Dickson Minto WS…Shepherd and Wedderburn LLP…The Bank of Scotland plc…Merchant Turnaround plc…The Merchant House Group…Collyer Bristow LLP…The Worthington Group…Ticketus LLP..Octopus Investments LTD…C Hoare & Co, Private Bankers, The Takeover Panel…Plus Stock Exchange plc…Dickson Minto WS…Saffrey Champness, Cairn Financial Advisors…Dundas and Wilson LLP…MCR Business Consulting (Now Duff & Phelps)…The Chancery…The Dorchester Hotel…A hotel the name of which is to the prosecutor unknown at Charlotte St London: Clarke Wilmot PLC and at addresses meantime to the prosecutor unknown in France and Monaco,  you CRAIG THOMAS WHYTE, GARY MARTYN WITHEY, DAVID HENRY GRIER, DAVID JOHN WHITEHOUSE and PAUL JOHN CLARK did conspire together to acquire and obtain by fraud a majority and controlling stake in the shareholding of the club (herinafter referred to as the “acquisition”) through Wavetower Limited..this being a company incorporated for the purpose of and the means used to effect said acquisition and a company managed and controlled by you CRAIG THOMAS WHYTE and also being a wholly owned subsidiary of Liberty Capital Limited a company incorporated in the British Virgin Islands..this being a company owned by you CRAIG THOMAS WHYTE and of which you were the sole director, and in furtherance thereof by means of fraud, false representations and false pretences made by you CRAIG THOMAS WHYTE, GARY MARTYN WITHEY, DAVID HENRY GRIER, DAVID JOHN WHITEHOUSE and PAUL JOHN CLARK and by the hands of your authorised employees, agents and representatives through inter alia meetings, telephone calls, correspondence and emails did:-

 

 

The Indictment

Five people appeared in court in Edinburgh today,  Craig Whyte, David Grier, David Whitehouse, Paul Clark and Charles Green. For legal reasons we cannot report the bulk of proceedings but can summarise the charges as they stand at the moment.

The indictment read to the court is 20 pages long but can be broken down to three sections. The first set of charges relate to allegations that Craig Whyte fraudulently acquired Rangers Football Club (RFC) by concealing the fact he was funding his takeover using money borrowed from “Ticketus” (Octopus investments) instead claiming to various bodies that he was using his own personal wealth. He also committed fraud by not disclosing he had been previously banned from being a company director. David Grier David Whitehouse and Paul Clark are charged with conspiring in this alleged fraud to the sum of £28,262,094 with Whitehouse and Clark also accused of conspiring to pervert the course of justice by not disclosing information to a court.

The second set of charges relate to allegations of a conspiracy between Whyte, Whitehouse, Clark and Charles Green to place RFC in administration and then, after appointing Duff and Phelps as administrators acquiring the assets of the business for a sum significantly below the market value using a company, Sevco 5088 as a vehicle. This, the prosecution say deprived the company’s creditors of money that should have been due to them. Greens consortium, the Crown said, paid Duff and Phelps a £200,000 “exclusivity fee,” of which £137,500 of which was refunded by Craig Whyte. Green is also charged with misleading investors and others about Whyte’s role in the transaction.

The third set of charges relate to Green transferring the assets of the club to a new entity “Sevco Scotland Ltd,” hence taking possession of a “non-cash asset” without the approval of the directors of Sevco 5088. This also deprived investors in Sevco 5088 of a financial benefit and later led to inviting the public to invest in shares at an Initial Public Offering while depriving them of pertinent information, ie the potential claim of Sevco 5088 on the company.

No pleas or declarations can be reported. The case continues.