Rangers In 'Perilous' Financial State When Taken Over By Craig Whyte, Court Told
21 April 2017, 19:04
Rangers Football Club was in a ''pretty perilous'' financial state when it was taken over by Craig Whyte, a court has been told.
Jurors heard from former managers Walter Smith and Ally McCoist during the first day of evidence in the trial of the former Rangers owner.
Mr Smith, 69, told the High Court in Glasgow about his first meeting with Whyte, who is accused of acquiring the club fraudulently in May 2011.
The ex-manager, who was in charge of the team between 1991 and 1998, and then again from 2007 until 2011, said he had told Whyte it required investment and a ''level of freshness''.
Mr Smith told the court that, at the time, he was aware of a tax case relating to the use of employee benefit trusts (EBT) at Rangers but was not directly involved.
He said he was also aware of an overdraft the club had, which he agreed was in the region of £18 million when he left, just days after Whyte took over the club.
Donald Findlay QC, representing Whyte, asked: ''The finances were in a pretty perilous state it would seem, was that your impression?''
''Yes,'' Mr Smith said.
Mr Findlay continued: ''For someone like yourself with your experience and affection for the football club, it must have been very distressing to see it, the club, in a state like that.''
Mr Smith responded: ''Yes, it was but we had been trying our best to handle the situation while it was there.''
He agreed with Mr Findlay's assertion the ''future was not exactly bright at that time in terms of the quality of the team'' and there were ''real problems'' in getting the squad to a level that allowed it to compete with rivals Celtic.
The jury of eight men and seven women later heard from his successor Mr McCoist, 54.
He told the court he had a ''very positive'' response from Whyte in relation to the need to refresh the playing squad.
Under questioning from advocate depute Alex Prentice QC, he said: ''There was a number of players which I would have liked to have signed.
''I just felt that the offers that were being made for these players were certainly, just in my opinion, not realistic for us to have any chance of getting the players.''
Under cross-examination from Mr Findlay, Mr McCoist said he could not be sure exactly when he had signed his contract to become Rangers manager but confirmed no discussions had taken place with Whyte about the terms of that contract despite him inheriting it as the new owner.
He also acknowledged a number of signings took place after Whyte had taken over the club, including now captain Lee Wallace.
Mr Findlay said: ''More was being spent on your squad in terms of player salary than had been spent on the previous squad on which you were assistant manager. You may or may not have known that.''
''No,'' Mr McCoist replied.
Whyte, 46, denies two charges relating to the purchase, one of fraud and another under the Companies Act.
It is alleged he pretended to then Rangers owner Sir David Murray, and others, that funds were available to make all required payments to acquire a ''controlling and majority stake'' in the club - including clearing an £18 million bank debt, £2.8 million for the ''small tax case'' liability, a £1.7 million health-and-safety liability and £5 million for the playing squad.
The Crown alleges Mr Whyte had only £4 million available from two sources at the time but took out a £24 million loan from Ticketus against three years of future season ticket sales ''which was held subject to an agreement or agreements being entered into between the club and Ticketus after said acquisition''.
The second charge under the Companies Act centres on the £18 million payment between Mr Whyte's Wavetower company and Rangers to clear a Bank of Scotland debt.