- Thursday, April 25, 2024
The Scottish finance minister faces questions from opposition over her role in handing Sanjeev Gupta’s GFG Alliance a taxpayer-backed guarantee of £586 million when it acquired a loss-making aluminium venture.
By: Shubham Ghosh
Kate Forbes, who joined the race for the leadership of the Scottish National Party (SNP) earlier this week after Nicola Sturgeon decided to step down, has been urged to reveal her dealings with Sanjeev Gupta, a controversial steel tycoon, in detail.
The 34-year-old Scottish finance minister now faces questions from political opponents over the role she played in handing Gupta’s GFG Alliance a taxpayer-backed guarantee of £586 million when it acquired a loss-making venture — an aluminium plant in the Scottish Highlands, The Telegraph reported.
Forbes is already battling a backlash for personally opposing same-sex marriage on grounds of her religious conviction and the latest move could further challenger her ambition to become the first minister.
Jamie Halcro Johnston, Scottish Conservative shadow minister for business, trade, tourism and enterprise, alleged while speaking to The Telegraph that the SNP put over half a billion pounds of taxpayers’ money at risk by riding “roughshod over state aid rules”.
Speaking about Forbes, he said, “As not only the finance secretary, but the constituency MSP, Kate Forbes would be acting in the public interest by being as transparent as possible over this murky business.”
The GFG Alliance said at the time that it had invested millions of pounds to protect thousands of jobs across the UK. A spokesperson said they bought businesses out of administration and worked with unions and policy makers closely with a goal to make them viable.
The Scottish government said it had “carried out appropriate due diligence of the Lochaber guarantee prior to its approval, including the value of its comprehensive security package with respect to the extent of the guarantee”, The Telegraph report added.
In 2016, Gupta purchased the Lochaber aluminium smelter and associated hydropower plant at Fort William for £330 million from Rio Tinto with the help of a 25-year guarantee, despite the government cautioning about his empire’s financial strength.
He also acquired a Scottish hunting estate measuring 114,000 acre as part of the deal.
The future of the GFG Alliance, which employed more than 30,000 people worldwide, faced uncertainty two years ago following the collapse of Greensill, its main lender.
Forbes, who has been a member of the Scottish parliament representing Skye, Lochaber and Badenoch since 2016, has been serving as the cabinet secretary for finance and economy since 2020. She was the minister for public finance prior to that.
It was revealed previously that Forbes accepted a rugby ticket worth £600 from Gupta in 2018 as the latter tried for more state support.
At the time, the SNP explained that Forbes had accepted the invitation from Gupta as a member of the parliament and before she became a minister.
According to a spokesperson, once she became the minister, Forbes was recused from all ministerial decision-making linked to any aspect of the GFG Alliance holdings at Lochaber because of her constituency interests.
Letters released by the Scottish government in a later period showed that Gupta was lobbying for more taxpayer backing to help “unlock” more investment from his empire. It was also learnt that in the months that followed the rugby match, grants amounting to over £1 million were given to the steel giant by Scottish Enterprise, The Telegraph report added.
While Forbes was the parliamentary liaison officer to the finance secretary at the time of accepting the ticket in 2018 and her top ministerial appointments came months later, Johnston said she had a “perfect opportunity” to show transparency over the deal with the public.
Speaking on the matter, Forbes accused the Tories of always complaining.
“If it weren’t for Scottish Government intervention, none of the jobs at the smelter would have been saved. The Tories will always look to complain. If the Scottish government hadn’t stepped in, they’d have complained. The Scottish government did step in, and the Tories still complain,” she was quoted as saying by The Telegraph.
“As the local MSP I want to ensure GFG delivers on their commitments to Fort William so that the local economy continues to grow and create jobs.
“The biggest issues facing employers right now are rising inflation, shortage of materials and difficulties in recruitment – perhaps these are issues that the Tories should get exercised about.”
