Lib Dems call on Scottish Government to reveal extent of ties with businessman Sanjeev Gupta
The Scottish Liberal Democrats have called on the Scottish Government to detail how the public purse will be protected from links to Sanjeev Gupta after the British Business Bank severed ties with the businessman.
In 2016 the Scottish Government provided a taxpayer-backed loan guarantee to Gupta’s GFG Alliance to enable it to buy a Lochaber-based aluminium smelting plant and two nearby hydropower stations. Following a two-year Freedom of Information battle with the Financial Times it was revealed last year that the total sum guaranteed was £586m.
The deal was hailed at Holyrood for enabling Gupta to guarantee 160 jobs, but his business interests were thrown into crisis following the collapse of Greenshill Capital last year.
The financial services company, which former Prime Minister David Cameron lobbied on behalf of, filed for insolvency after insurers stopped providing cover for its loans.
This impacted on Gupta because the entirety of a £400m facility provided to Greenshill from the British Business Bank had been lent out to businesses he controlled.
This week the UK Government said the British Business Bank, which is state owned, would no longer guarantee any loans provided by Greenshill following an investigation into its lending practices.
Gupta’s business interests are also under investigation by the Serious Fraud Office, which suspects fraud, fraudulent trading and money laundering on the part of GFG Alliance, including its financing arrangements with Greenshill.
Scottish Liberal Democrat economy spokesperson Willie Rennie said the Scottish Government must now set out the steps it is taking to protect Scottish public finances and the taxpayer.
“The financial arrangements between the SNP Government and the GFG Alliance are mired in secrecy,” he said.
“I have repeatedly asked for details of the steps ministers have taken to protect our hard-earned taxes but I have been blocked at every corner.
“We were promised 2,000 jobs at Lochaber in return for hundreds of millions of pounds of financial guarantees, but those jobs have not materialised.
“The SNP Government’s cack-handed approach to the Lanarkshire steel mills means that we could be exposed to millions of pounds for the environmental clean-up.
“The industrial intervention strategy of this government is not a good one, which is why we need to be told more.
“The UK Government have taken action and been open about it so why can’t the Scottish Government do likewise?”
A Scottish Government spokesperson said there are no current concerns regarding Holyrood's business arrangement with Gupta.
“The Scottish Government receives a commercial fee in respect of the Lochaber guarantee and guarantee fee payments are up-to-date.
"There has been no call on the guarantee and the Scottish Government holds a comprehensive suite of securities over the assets at Lochaber that have been valued at more than the outstanding amount guaranteed.
“GFG has created 40 new jobs in Lochaber since 2016 – increasing direct employment in the complex to 200 jobs.
"The business remains committed to investment in the long term future of the site."