Dave King shouldn't be treated as 'poor businessman' - court hears

Rangers chairman Dave King shouldn't be treated as a "poor businessman" who didn't know he's legally required to fund an £11 million share purchase, a court has heard.

Advocate James McNeill QC told judge Lord Bannatyne that the tycoon isn't an "innocent" who didn't know he had to offer other shareholders cash to buy remaining club shares.

The Court of Session heard on Friday how Mr King allegedly knew that legislation dictated that entrepreneurs who hold a 30 per cent stake in businesses are compelled to make the offer.

Mr McNeill told the judge that a suggestion made by Mr King's legal team that their client was unaware of the 2006 Companies Act was incorrect.

The lawyer said that there was evidence available to know that Mr King was fully aware that he would have to make an offer to remaining shareholders.

He said that financial investigators had believed they had established that Mr King acted "in concert" with three wealthy fans who are nicknamed the "Three Bears".

He said that Mr King acted with George Latham, George Taylor and Douglas Park to acquire a 34 per cent stake in the club.

Mr McNeill said he disagreed with claims that the four men didn't act in concert in acquiring the stake.

He also disagreed with a claim made by Mr King's lawyers that 14.7 per cent of the 34 per cent share was held by a company which is independent of Mr King.

The silk said that Mr King refused to co-operate with investigators and that all available evidence showed the businessman was in control of the 34 per cent stake.

Mr McNeill added: "Mr King is not some poor businessman who does not the workings of the Company Act.

"This is not someone who is a poor innocent. He didn't come before the panel and say 'I didn't realise'.

"He decided not to appear so he could not be cross examined."

Mr McNeill was speaking on the final day of a two day debate at the Edinburgh based court.

The Panel On Takeovers and Mergers, which regulates financial deals in the UK, says it has started proceedings after Mr King ignored an order to make an offer for the remaining shares.

The panel want the court to make an order which would force Mr King to make a cash offer at 20 pence a share to remaining shareholders.

The Court heard on Thursday how that on December 31 2014, the "three bears" purchased a 16.23 per cent of shares in Rangers.

Mr King then used cash from a family trust to buy 14.7 per cent of the shares. These shares were placed in the name of a company called New Oasis Asset Management Limited.

Mr King claims the firm, which is registered in the British Virgin Islands, is independent of him and he has no control over the shares.

On Friday, Mr McNeill told the court that financial investigators had obtained emails which showed that Mr King and three bears co-operated with each other.

He said that the evidence showed Mr King was well aware of the law.

Mr McNeill added: "Mr King has an understanding of the law. He has a detailed knowledge of the code."

The lawyer also addressed claims made by Mr King's legal team that their client didn't have any money.

The court heard claims that Mr King couldn't get cash because it was held in trusts that were held in his family's name. The businessman claimed that it was his family determined how the money was spent.

Mr McNeill said the money used to purchase the New Oasis Assessment Management Shares came from a trust "controlled" by Mr King.

He added: "He is in de facto control of the fund. Mr King has used a trust structure which allows him to plead to having a lack of funds to avoid his obligations.

"There is clear evidence available to the court that when it suited Mr King the trust funds were available in order to buy the shares.

"The court should make an order in order to ensure compliance."

Earlier on Friday, Mr King's advocate Lord Davidson of Glen Clova QC told the court that Mr King didn't have money and wasn't able to fund the buy back at 20 pence per share.

The lawyer told Lord Bannatyne that there was money in on shore and off shore trusts but they were in the name of Mr King's family and he didn't have control of them.

Lord Davidson said the court shouldn't pass the order required the panel because the shares were currently worth 27 pence.

He added: "Mr King is penniless. Any order wouldn't secure compliance. It won't. It is pointless."

Lord Davidson also said that before making an order in favour of the panel, the court may have to hold a hearing into Mr King's finances.

He added: "My submission is that the court should refuse the order which is sought.

"My Lord should allow the proof of these issues - one way of going forward to is to have proof of quantum of funds.

"However, my Lord is not obliged regardless of consequence to give the order sought."

Lord Bannatyne will issue his ruling at a later date.