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Scottish ministers asked to explain £330m taxpayer-backed deal with metal tycoon

Sanjeev Gupta’s firm GFG Alliance is currently the subject of a fraud investigation (Danny Lawson/PA)
Sanjeev Gupta’s firm GFG Alliance is currently the subject of a fraud investigation (Danny Lawson/PA)

Scottish ministers are facing transparency calls after it was revealed a metal tycoon under investigation for fraud paid just £5 towards the acquisition of a Highlands smelting plant – with taxpayers financing the rest of the £330 million deal.

Entrepreneur Sanjeev Gupta, chief executive of Liberty Steel, acquired the aluminium plant and two adjacent hydro power plants in 2016.

The Scottish Government has contributed up to half a billion pounds in guaranteed loans for the smelter and the hydro power plants, worth a total of £586 million.

And the deal has come under fire after the Sunday Times revealed Mr Gupta’s firm contributed £5 to the deal, according to documents filed at Company House.

Mr Gupta’s family empire, GFG Alliance, is the subject of alleged fraud and money laundering investigations.

The company have denied any wrongdoing.

Now the Scottish Liberal Democrats economy spokesperson, Willie Rennie, is urging the Scottish Government to “end the secrecy” and announce the details of the deal.

It comes as the UK Government withdrew guarantees on £400 million of loans Greensill Capital made to the tycoon’s companies.

The Scottish Government has been urged to follow suit and protect hundreds of million pounds of public finances.

Mr Rennie said: “The SNP Government has been gullible once again.

“Two thousand jobs were promised by Gupta which have not been delivered.

“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 finally 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.”

Jamie Halcro Johnson, Scottish Conservative business spokesperson, told the Sunday Times it was “staggering” the Government was prepared to risk more than half a billion pounds.

A Scottish Government spokesman said: “The Scottish Government is committed to openness and transparency. Our intervention to support the Lochaber aluminium smelter and to secure the continued operation of the Dalzell and Clydebridge steel mills has preserved strategic industrial capacity and supported the livelihoods of hundreds of people since 2016.

“The Scottish Government receives a commercial fee in respect of the Lochaber guarantee and guarantee fee payments are up-to-date.

“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.

“GFG has created 40 new jobs in Lochaber since 2016 – increasing direct employment in the complex to 200 jobs. The business remains committed to investment in the long term future of the site.

“The Liberty steel sites continue to trade and directly support 140 households. Both businesses support a valuable supply chain with hundreds of associated jobs.”