Scottish ministers are facing calls for greater transparency after it was reported that a metal tycoon under investigation for fraud paid just £5 for the acquisition of a smelter in the Highlands – with taxpayers funding the remainder of the £330m deal.
Entrepreneur Sanjeev Gupta, managing director of Liberty Steel, acquired the Lochaber aluminum plant and its two hydropower plants in 2016.
The Scottish Government has guaranteed loans for the smelter and hydropower plants worth £586 million.
The Sunday Times revealed that Mr Gupta’s companies invested £5 in the deal, according to company filings, not the previously thought £35million.
Mr Gupta’s family empire, GFG Alliance, is under investigation for alleged fraud and money laundering.
The company has denied any wrongdoing.
The UK government recently ended guarantees on £400m of loans that Greensill Capital made to Mr Gupta’s businesses.
The Scottish government has been urged to follow suit to protect hundreds of millions of taxpayers’ money.
Scottish Liberal Democrat MP Willie Rennie said the Scottish Government must “end the secrecy” and reveal details of the deal.
“We knew the Scottish Government’s industrial intervention strategy was a disaster, but this takes it to a new level.
“We need a statement from ministers to finally properly explain this deal, the government’s financial exposure and its detailed plan to recover the position and limit taxpayer exposure.”
Tory MP Jamie Halcro Johnson said it was “staggering” the government was willing to risk more than half a billion pounds.
The Scottish government has said it is “committed to openness and transparency”.
A spokesperson said: “Our intervention to support the Lochaber aluminum smelter and to ensure the continued operation of the Dalzell and Clydebridge steelworks has preserved strategic industrial capacity and supported the livelihoods of hundreds of people since 2016.
“The Scottish Government collects a commercial commission under the Lochaber guarantee and the guarantee fee payments are up to date.
“There has been no call on the guarantee and the Scottish Government holds a full suite of title to Lochaber’s assets which have been valued at more than the outstanding amount guaranteed.
“GFG has created 40 new jobs at Lochaber since 2016, bringing direct employment at the resort to 200 jobs. The company remains committed to investing in the site’s long-term future. Liberty’s steel sites continue to trade and directly support 140 homes. Both companies support a valuable supply chain with hundreds of associated jobs. »
