June 25 (Bloomberg) -- Scottish prosecutors ordered a criminal investigation into the acquisition of Rangers Football Club Plc by Craig Whyte in May 2011 and the subsequent running of the club.
The 54-time Scottish soccer champion went into liquidation earlier this month after the U.K. tax authorities rejected a proposal to repay creditors only a fraction of the club’s debts as part of a plan to exit administration.
The probe will be carried out by Strathclyde Police in Glasgow, the Crown Office said in an e-mailed statement today.
Whyte, who was disqualified in 2000 from being a company director for seven years, bought an 85% stake in the club from David Murray for one pound ($1.55) in return for assuming debts of 18 million pounds owed to HBOS, a unit of Lloyds Banking Group Plc.
Whyte put the club into administration on Feb. 14 in response to efforts by HM Revenue and Customs to recover 14.4 million pounds of unpaid taxes, including taxes deducted from players’ wages and not passed on. The tax authority is also awaiting judgement in a dispute relating to offshore employee benefit trusts.
The club may owe more than 93 million pounds in unpaid taxes and a further 41 million pounds to other creditors, former administrators Duff & Phelps estimated on April 5.
Whyte used money received from Ticketus to repay HBOS. In total, Ticketus advanced almost 30 million pounds to the club in 2011 in return for the ticket agency receiving the revenue from season ticket sales for four years, the administrators said. Whyte, who provided personal guarantees for the loans, is now being sued by Ticketus for 27 million pounds.
As part of its reasons for rejecting a Creditors Voluntary Arrangement to allow Rangers to exit administration, HMRC said the club could make a fresh start by going into liquidation.
“A liquidation provides the best opportunity to protect taxpayers, by allowing the potential investigation and pursuit of possible claims against those responsible for the company’s financial affairs in recent years,” HMRC said in a statement on its website.
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