Could Mr Whyte Pass A “Fit & Proper Test”?

The Scots entrepreneur once dubbed “the next Richard Branson” was accused of failing to pay his employees’ wages and was at the centre of a massive tax investigation by the Inland Revenue. But after fleeing to the tax haven of Monte Carlo, where he continued with an extravagant lifestyle, he has now made an equally extravagant return to Scotland.  Whyte is back home after forking out a colossal £720,000 for a Scottish castle. He and wife Kim have snapped up Castle Grant in Grantown-On-Spey, Moray.  The ancient ancestral seat of the chiefs of the Grant Clan, the 15th-century castle sits on a small hill around a mile north of the town.  It contains dozens of rooms, one of which is a massive dining hall. In recent years, it has been a popular visitor attraction for Grants from all over the world, who see the castle as their ancestral home.  After being listed alongside the likes of David Beckham and Prince Naseem Hamed as among Britain’s richest young people in 1999, Whyte’s fortunes took a dip.

 

His business career started early and by the time he left school, he had amassed a personal fortune of £20,000 by playing the stockmarkets.  Whyte acquired Vital UK in 1993 and built it into a conglomerate. But it went into voluntary liquidation in 1996, with debts totalling £600,000.  In 1999, a report hinted that he had failed to register some of his employees for PAYE tax.  The tycoon ended up at the High Court, where his legal team admitted he owed £3.5 million to a single creditor. It was around the same time that members of the 700-strong workforce from his company network even threatened to riot over unpaid wages.  But despite the allegations and court cases, he insisted in an exclusive interview with the Sunday Mirror at his Monte Carlo home eight years ago that he was debt-free. “I don’t owe anyone any money – least of all the taxman,” he said.  And now, as he returns to Scotland, Whyte says he is to restore his newly acquired castle to its former glory.

 

Yesterday he spoke of his delight at being back in Scotland and insisted he was debtfree and no longer under investgation by the Inland Revenue.  He said: “I am debt-free and now own substantial holdings and assets in various parts of the world.  “There are no outstanding claims against me. I continue to hold property and assets overseas.  My wife and I have always wanted to own a home in Scotland, and what more beautiful spot than Strathspey. The Inland Revenue is satisfied with my status and previous claims of debts proved completely false. I have never been declared bankrupt.”  Asked about his plans for the castle, he added: “We have held discussions with Historic Scotland and it is happy with our long- term ambitions.  This involves a multi-million-pound restoration over the next few years.  We will be at pains to preserve the historic character and ambience of the castle.”

 

But when the Sunday Mirror contacted Historic Scotland, a spokesperson claimed they had no record of any discussions with Mr Whyte concerning his plans for the castle.

 

The Herald, June 17, 2004 –

 

AN ex-associate of one-time Scottish business “whizz- kid” Craig Whyte has surrendered his right to practise as a chartered accountant after admitting professional misconduct.  Kenneth Murdo Macleod, former director of VH Investments, one of Whyte’s many companies, has agreed to resign from membership of the 15,000-strong Institute of Chartered Accountants of Scotland following a disciplinary probe lasting several years. Millionaire playboy Whyte fled from Glasgow to Monaco in 1999 after a government investigation was launched into his business activities. Then aged 30, Whyte, once dubbed “the next David Murray” (), was alleged to have masterminded a scheme to hive off hundreds of thousands of pounds to companies in an offshore tax haven.  A winding-up petition over unpaid wages was launched against his firm, Vital Hold-ings, at the high court in London.

 

 

Daily Mail, February 17, 1999

 

AT THE age of 27, Craig Whyte was fabulously wealthy and had a lifestyle to match his millionaire income.  But three years after he amassed a fortune by hiring out security guards, his business is the subject of a Government investigation and he has debts believed to be around £4million.  As former employees pursue him through the courts to recover unpaid wages, Mr Whyte has left Scotland and set up home in Monte Carlo.  The young tycoon was once heralded as the shining star of Scottish industry and listed in the top ten of British ‘Rich Kids’.  His personal wealth of £20million put him ahead of millionaire rock stars such as the Gallagher brothers of Oasis.  The cash financed luxurious living, including penthouse in a Glasgow waterfront development, a sleek black Mercedes convertible, a powerboat berthed on Loch Lomond and an executive box at Rangers Football Club.

 

But Mr Whyte now owes some £3.5million to one creditor and is officially ‘insolvent’. He is believed to have created a complicated network of companies extending far beyond Scotland and was responsible for transferring large quantities of money to interests in the tax haven of the Bahamas.  Companies with which Mr Whyte was connected have folded, staff and suppliers are unpaid and massive VAT and income tax bills are outstanding.  Liquidators have already passed a report to the Department of Trade and Industry and it is believed that the department of Customs and Excise has launched an investigation.  But Mr Whyte remains holed up at a secret location in Monte Carlo and is stubbornly vowing to clear his name.  His former security company, Vital UK, based in Dennistoun, Glasgow, collapsed with debts of around £750,000 in 1996. Disgruntled employees of another connected firm, Vital Holdings, are lodging an action at the High Court in London in an attempt to win back unpaid wages.

 

Whyte launched Vital Holdings when he was 23 and embarked on a process of acquisition, travelling the country buying up plant hire and security businesses to bring under his commercial umbrella.  At the height of its success in the early Nineties, his security and plant hire company employed around 700 people, but by 1995 it had gone into voluntary liquidation.  A former acquaintance said: ‘When Vital was going belly-up, all of its assets were sold to a company called Pelcroft.  ‘Then they were immediately sold to another company which immediately sold them to another company, and on each occasion Craig Whyte organised the transfer. He was just putting things out of reach.’ When Vital UK crashed, it owed £33,000 in VAT, £66,500 to trade and in expenses, and £280,000 in income tax.

 

The flamboyant entrepreneur, who was once thought of as the next Richard Branson, had a rapid rise to prominence in the business world.  The former Kelvinside Academy pupil began playing the money markets while still at school, buying his first shares at the age of 15 with the proceeds from various part-time jobs.  By his mid-20s he had secured the lifestyle he had dreamed of, spending with great passion.  It seemed he was destined for greatness, and development agencies, desperate to foster the entrepreneurial spirit, held him aloft as a glowing example.  Perhaps they should first have examined his business track record more closely.  After leaving school he signed up for a course in accountancy but dropped out and never went back to complete it.  A company he founded at the age of 20 quickly hit the rocks and was sunk by large debts.  ‘You might say it was a valuable experience,’ he said philosophically at the time.  “I would prefer that it hadn’t happened but it has reduced the chances of it happening again.’ Last night, a spokesman for the liquidators said: ‘We have obviously tried to contact Mr Whyte on a number of occasions but we are informed by his lawyer that he is living abroad.’ A spokesman at the Glasgow base of Vital Holdings, which continues to trade, said Mr Whyte was unavailable for comment.

 

The spokesman said he had issued a statement disputing the allegations made against him and declaring his intention to seek legal redress.  He added: ‘I can’t say where Mr Whyte is at the moment, but he is speaking to his solicitors about this.’ 

 

Fit and Proper?

 

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