A court has heard that a director of Rangers Football Club raised concern about a deal to buy the Ibrox side two weeks before it was concluded.
Dave King also warned of a possible police investigation into Craig Whyte’s takeover of the club, which Mr Whyte bought in May 2011.
Mr Whyte is on trial at the High Court in Glasgow accused of a fraudulent acquisition of Rangers.
He denies a charge of fraud and another under the Companies Act.
Mr Whyte’s bid to buy Rangers required the setting up of a statutory takeover panel. The court heard about a letter sent to the panel from Mr King, a former Rangers board member.
Mr King, who had referred to himself as Rangers’ biggest minority shareholder after he invested £20m in the side, was appointed to the Rangers board in 2002.
He sent a note to the takeover panel in April 2011 about concerns he had about the source of Mr Whyte’s funds to buy Rangers.
It said: “There is concern at a proposal by Mr Craig Whyte to acquire a controlling interest in Rangers Football Club by purchase of the total share hold currently owned by Murray Group.
“There are concerns about the sources of the funds that are available for the potential acquisition and that this may lead to formal investigation by the policing authorities responsible for these matters.”
The note emerged during a second day of questioning of former Rangers owner Sir David Murray, who sold the club to Mr Whyte.
During cross-examination, defence QC Donald Findlay also showed Sir David an email addressed to him from then Rangers chairman Alastair Johnston.
In the email sent in March 2011, Mr Johnston wrote: “There has been, in my opinion, no credible opportunity for Craig Whyte in this process that would have allowed him to totally understand the issues that he will face as majority owner of Rangers Football Club.”
These included the “shambles” of a playing squad, the upkeep of Ibrox stadium and health and safety-related maintenance.
The court has already heard that Sir David stepped down as chairman of Rangers in 2009 before selling his 85% share in the club to Mr Whyte for £1.
Defence QC Mr Findlay said: “In general terms, you entrusted the club to a board that you believed were capable of following the plan that you had left in place but they bring in no investment, their playing squad ends up as a shambles and this is two months before the deal with Mr Whyte…
“You were being let down by people who didn’t have a clue what they were doing when running Rangers.”
Sir David replied: “I don’t agree about the squad being a shambles but the facts are there.”
Mr Findlay also produced notes from David Horne, one of Sir David Murray’s “closest advisors”, dating from November 2010.
The note said: “Octopus discussion w/CW re £15m possible facility”.
The lawyer said: “Octopus was Ticketus, so it would seem that one of your closest advisers, David Horne, was aware that Mr Whyte may be looking for a partner, a possibility of £15m by somebody called Octopus.”
Sir David replied: “It appears by that note. I’ve never seen or heard of that.”
He also told the court that he considered the idea of pre-pack administration for Rangers but dismissed it as not a viable option.
Mr Whyte is accused of pretending to former 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.
The funds included clearing the £18m bank debt, £2.8m for the “small tax case” liability, a £1.7m health-and-safety liability and £5m for the playing squad.
The Crown alleges Mr Whyte had only £4m available from two sources at the time but took out a £24m loan from Ticketus “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 £18m payment between Mr Whyte’s Wavetower company and Rangers to clear a bank debt.
The trial before eight men and seven women continues.