The devolved government of Scotland, the Scottish Government stands strong amid encountering an inherent financial disclosure of £161 million in regards to its connection in the Lochaber aluminium smelter acquisition deal by British Businessman, Sanjeev Gupta owned GFG Alliance.
The Scottish Government officials stated, “There was extensive security on the deal and they were more than covered.”
However, the Public Audit Committee at Holyrood was informed that the government’s financial exposure scaled to £161 million in 2021 from £37 million in 2020.
The ministers of the government delivered a financial commitment to the GFG Alliance, the new buyer of the aluminium smelter at Fort Willian in 2016. Even so, the main lender of GFG Alliance, Greensill Capital, collapsed in 2021.
Colin Cook, the Director of economic development for the Scottish Government said to the committee: “There are some well-known financial issues that they are dealing with but, as regards the Lochaber asset, we believe that the value of the provision is more than covered by the security package that we have when it comes to protecting the public finances.”
“That includes the smelter, it includes the hydro, it includes some extensive land holdings.”
He added: “I think we’re in a robust position as one can be from a financial point of view at the moment.”
“And, to repeat, we are in a very robust position because we have protected really valuable jobs and a really valuable strategic asset in the West Highlands.”
Richard Leonard, the convenor of the committee convener highlighted, “GFG Alliance was now the subject of an investigation by the Serious Fraud Office, and asked what contingencies the government had in place.”
“While some of GFG’s assets in England were being wound up by HM Revenue & Customs, the Scottish plants were not a part of that”, Cook added.
“It is a complicated group and there are undoubtedly arrangements across that group, there may well be loans from one part to the other.”
“So there is always a potential that the actions of the HMRC do spill over into the assets in Scotland, but at the moment that’s not the case.”
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