The Scottish government ministers are under fire for lack of transparency after it alleged that metal tycoon Sanjeev Gupta is under investigation for deceit and paid only £5 towards acquiring a Highlands smelting plant, with taxpayers financing the rest of the £330 million deal.
In 2016, the CEO and Chairman of GFG Alliance, Sanjeev Gupta, took possession of the Lochaber aluminium smelter and its two hydropower plants. The Scottish Government has guaranteed loans worth £586 million for the smelter and the hydropower plants.
GFG Alliance is currently under investigation for alleged fraud and money laundering. In a recent move, the UK Government ceased guaranteeing £400 million of loans Greensill Capital made to Gupta's companies.
It has been urged that the Scottish Government follow suit to safeguard hundreds of millions of pounds of taxpayers' money.
In a statement, Willie Rennie, Scottish Liberal Democrat MSP, demanded that the Scottish Government unveil the deal's details to the public.
The member of the Scottish Parliament further added, "We knew that 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 properly explain this deal, the financial exposure for the Government and its detailed plan to recover the position and limit the exposure for the taxpayer."
The Government's willingness to risk more than half a billion pounds is "staggering", according to Tory MSP Jamie Halcro Johnson. However, the Scottish Government pledged to "ensure that transparency and openness are upheld".
A spokesperson from the Scottish Government said: "We have supported hundreds of livelihoods and preserved strategic industrial capacity by supporting the Lochaber aluminium smelter and the Dalzell and Clydebridge steel mills since 2016."
"Scottish Government receives a commercial fee with Lochaber Guarantee payments and complies with the Guarantee fee. The Scottish Government holds a comprehensive suite of securities over the Lochaber assets valued at more than the outstanding guarantee amount, and no demand has been made on the Guarantee."
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