SEIZED: Scotland's biggest bankrupt Gregory King forced out of £5m home in Marbella's La Zagaleta ... Ex-blue chip lawyer loses prized mansion in enclave protected by armed guards and where Putin was a neighbour ... Fraud probe financier back in Glasgow 16 years after the unsolved doorstep murder of business partner Alex Blue ... Now trustee goes after SECOND Costa del Sol casa

SCOTLAND’S biggest bankrupt has been forced to abandon his £5million Spanish mansion which was seized to pay some of his debts.

Gregory King, 49, has returned to Glasgow after his trustee Adrian Hyde took control of the stunning hilltop home overlooking Marbella.

The house in the Costa del Sol’s exclusive La Zagaleta enclave has been sold for €5.7million (£5.11m).

Hyde is now attempting to obtain a neighbouring mansion previously occupied by King’s bookmaker dad Hugh King, 77, and worth at least as much.

Hyde, a partner with CVR Global, said: “When we took possession of the house, Mr King appears to have left in a hurry as it was full of paperwork, clothing and other personal effects.  It was almost as if they had simply left on holiday but never returned. 

“There were two cars in the driveway and one of his many Harley Davidson motorbikes in the garage.

“The house was owned by a Spanish company with a Gibraltar parent company which in turn was owned by Mr King.

“When Mr King was made bankrupt, we used our investigatory powers to obtain various legal files and other information regarding the ownership of properties purchased by him.

“They showed he was the ultimate beneficial owner of the house and from that we changed the directors of the subsidiary company which allowed us to take possession and then sell it.

“We are very pleased to have recovered this property and to have sold it for such a good price.

“Once Mr King’s sizeable Spanish tax liabilities were settled, we were able to distribute some £2million to creditors.”

London-based Hyde is conducting a global hunt for any assets which can be sold to pay King’s personal debts of around £120million.

They include an £800,000 house occupied by King’s wife Theresa, 40, in the Glasgow suburb of Giffnock

He added: “We are now attempting to do the same thing with other properties owned by Mr King, or purchased with funds misappropriated by him.

“We are also taking action in Gibraltar over ownership of the house in Giffnock.

“A document has been produced apparently showing this property was gifted by Mr King to his wife but we have never seen the original and are contesting this claim.

“It is owned by a Gibraltar company and we’re having a fight over who owns that company. We’re saying that as Mr King’s trustee we do while Mrs King is saying she does.”

Former blue chip lawyer King came to public attention following the murder of his Glasgow taxi business partner Alex Blue in 2002.

Blue, 41, was stabbed and beaten to death on his own doorstep in the city’s Downhill area. His murder remains unsolved.

Three years later, King launched the hedge fund Heather Capital which attracted around £400 million from worldwide investors to fund property deals in Scotland.

Investors’ money was channelled through a network of offshore companies controlled by King, in places such as Gibraltar, Isle of Man and Cayman Islands.

King enjoyed a lavish lifestyle and in 2008 staged a 40th birthday party at his La Zagaleta mansion.

The enclave is described as being Europe’s most expensive real estate and is home to the world’s super rich who are protected by armed guards, checkpoints and high walls.

It has been reported that secretive homeowners include Russian President Vladimir Putin.

The same year as King’s birthday party, King was awarded a papal knighthood, arranged by ‘priest to the stars’ Father Michael Seed.

At one point, King had so much money that he attempted to open his own bank in Gibraltar.

But in 2010, Heather collapsed — with investors’ cash unaccounted for.

An Isle of Man court judgement compared Heather to a 'Ponzi' scheme, made famous by jailed New York financier Bernie Madhoff.

Ponzis work by using new investors’ cash to make bogus returns to earlier investors, giving the illusion of success and generating more investment.

Liquidators claimed in court papers that many of the loans it made were ‘a fabrication and a sham’. 

Police in Scotland launched a fraud investigation which resulted in King and three associates being reported to the Crown Office. All four men denied any wrongdoing.

After five years considering the case, the Crown decided not to prosecute earlier this year — prompting concerns about the ability to deal with complex financial cases in Scotland.

The authorities in Gibraltar moved quickly to shut down another King finance firm — Advalorem Value Asset Fund, which also offered big returns on investments via property deals in Scotland.

The British overseas territory’s Financial Services Commission (FSC) alleged they were fraudulent and appointed Hyde as its special trustee.

Last year he bankrupted King over debts of £7.5million — but that figure has since risen to £120million, making him Scotland’s biggest ever bankrupt.

Malcolm Scott, ex-treasurer of the Scottish Conservatives, was Scotland’s previous bankruptcy record holder with debts of £41.1million.

Following the Gibraltar court’s bankruptcy of King, Hyde said: “This has ultimately ended with a judgment that shows that Gibraltar will not tolerate its companies being used as vehicles for fraud and will deal appropriately with culprits.”

King previously owned a string of high end cars including an extremely rare Jaguar E-Type, Porsche, Ferrari and at least five Harley Davidsons which he was often seen driving around the glitzy resort of Marbella.

One source said: “He burned through money as if he were a billionaire — with huge sums spent on property, cars, private jets and designer goods. Problem was, it was other people’s money. It’s now a question of working out what’s left and whether it can be found.

“However, it appears that King did not expect to lose his jewel in the crown — the La Zagaleta mansion. That will have really hurt.”

Hyde has vowed to recover as much money as possible for investors.

He said: “The extent of Mr King’s spending was incredible. We have found ownership records of many high end vehicles, although we believe the majority of these were disposed of by Mr King before we were appointed.

“For the benefit of all those people who are owed money, we are determined to track down any realisable assets, wherever they may be in the world.”

Versions of this report first appeared in The Sunday Times and Sunday Mail newspapers on September 2, 2018