• Monday, May 23, 2022

Business

Scotland’s minister faces scrutiny over £55m unpaid Gupta debt

FILE PHOTO: Scotland’s First Minister Nicola Sturgeon speaks during a pro-Scottish Independence rally in Glasgow, Scotland, November 2, 2019. REUTERS/Russell Cheyne/File Photo

By: Shilpa Sharma

SCOTLAND’S first minister Nicola Sturgeon is under a fresh scrutiny over her dealings with the steel tycoon Sanjeev Gupta after he failed to set aside the pledged amount of £55 million for Britain’s last aluminium smelter, The Telegraph reported.

In 2016, Gupta’s GFG Alliance had struck a taxpayer-backed deal with Scottish ministers for the Fort William smelter and associated hydropower plant for £330m.

Holyrood also handed Gupta a 114,000-acre Scottish hunting estate as part of the deal.

In return, Gupta committed to making regular payments into a “project account” overseen by the Scottish government for the development of the business. A substantial “milestone payment” was due by March, but emails released under freedom of information laws revealed that Gupta had not made payment weeks later.

On May 5, Fergus Ewing, Scotland’s rural economy secretary, wrote to Gupta asking: “When will you make further milestone investment payments into the charge account where, as you may know, £55m is now overdue?”

Earlier, the Scottish government had refused to say whether the payment had been made.

Scottish Conservative Highlands and Islands MSP Jamie Halcro Johnston said: “The SNP continue to be evasive over this affair.

“Local jobs and livelihoods, as well as millions of pounds of taxpayers’ money, are at stake here. SNP ministers must be fully transparent over what commitments they have received from the business, as well as the level of exposure of public funds.

“This affair is all too typical of an SNP government who are always too keen to avoid scrutiny, particularly when public money is at stake.”

The newspaper revealed in March that pension advisers had warned pension trustees about GFG’s finances ahead of the Scottish government providing hundreds of millions of pounds in taxpayer support in 2016.

The conglomerate, which employs 35,000 globally and 5,000 in the UK, has been scrambling for survival after the collapse of its main financier Greensill Capital in March.

Later, the Serious Fraud Office opened an investigation into GFG over suspected fraudulent trading and money laundering. Inquiries include GFG’s financing arrangements with Greensill.

A spokesman for GFG Alliance said: “Under its agreement with the Scottish government, GFG Alliance makes regular payments into its account that is charged exclusively for the development of its businesses in Lochaber.

“In March GFG Alliance’s main finance provider collapsed, which put pressure on group resources and unfortunately meant a delay in scheduled payments into the account. GFG is in discussions with the Scottish government and remains committed to its investment plans for Lochaber.”

A spokesman for the Scottish government said: “The project milestones referred to are inter-company transfers within the GFG Alliance related to planned investments of the business at the Lochaber smelter site. There is no debt owed to the Scottish government.”

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