Further questions

Gupta ‘put almost nothing into Scots plant’

Liberty Steel
Gupta’s business has been investigated

Metals tycoon Sanjeev Gupta made only a token contribution towards the £330 million purchase of a smelting plant in the Highlands, it has emerged.

The purchase in 2016 of the aluminium smelter at Lochaber and two adjacent hydro power plants was financed through a bridging loan by Greensill Capital to Gupta’s business empire.

Mr Gupta, who has been the subject of fraud and money laundering investigations, put just £5 into the deal, according to documents filed at Companies House, while the Scottish government provided guarantees of up to half a billion pounds.

Opposition politicians say the latest revelation in The Sunday Times adds another question to a growing list over the government’s decision to commit such a large sum to underwriting the project.

“It is now abundantly clear that this was a deal built on sand,” said Daniel Johnson, Labour’s finance spokesman. “What is not clear is what process could have cleared this deal and how ministers could have signed this off knowing these facts? Questions the SNP government must urgently answer.”

Jamie Halcro Johnston, the Scottish Conservative business spokesman, said: “It is staggering that [the government] were prepared to put at risk well over half a billion pounds of public money when the private firms involved effectively contributed nothing.”

Lib Dem MSP Willie Rennie last week demanded the Scottish government say whether it would be following a decision by the UK Government to withdraw guarantees on £400 million of loans Greensill Capital made to companies linked to Mr Gupta.

The Scottish Government told Daily Business on Tuesday that its intervention to support the smelter and Lanarkshire steel mills also owned by Mr Gupta had secured industrial capacity and hundreds of jobs.

Furthermore, the Scottish Government receives a commercial fee in respect of the Lochaber Guarantee and Guarantee fee payments are up-to-date, said a spokesman.

“There has been no call on the Guarantee and the Scottish Government holds a comprehensive suite of securities over the assets at Lochaber that have been valued at more than the outstanding amount guaranteed.”

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