Black fish scam: Shetland firm stripped of £1.5m assets and fined £150,000
A COMPANY at the heart of a massive “black fish” scam has been stripped of assets worth £1.5 million and fined another £150,000.
Shetland Catch Ltd could have faced greater financial penalties for “conniving” with skippers in the illegal landing of mackerel and herring worth £47 million.
However, Lord Turnbull said he recognised the importance of Lerwick’s fish processing plant to the islands’ economy, and that the firm had been at the forefront of the fishing industry’s drive to “clean up its act” and recover from an “episode of shame”.
Shetland Catch had admitted at an earlier hearing that illegal landings were made at its plant between January 2002 and March 2005.
Lord Turnbull had to decide at the High Court in Edinburgh the size of a confiscation order under proceeds of crime legislation, before imposing a fine for the offence.
Previously, he granted confiscation orders totalling almost £3 million against 17 skippers, and fined them a total of about £1 million. He said the men had been involved in “an episode of shame” for the fishing industry.
Murdo Macleod, QC, for Shetland Catch, said the firm had been almost helpless in going along with the scam. Board members had wanted to stop, but knew the skippers would simply take their catches elsewhere, and the company would have no business at all.
“It was concluded that, quite simply, Shetland Catch would not survive if it refused to accept the black fish,” said Mr Macleod.
He added that the firm had led the way in the industry “cleaning up its act”.
The court heard that Shetland Catch had been set up in 1989 as an answer to east European factory ships, and in an attempt to re-establish a locally based fish processing industry to provide employment for islanders.
The firm had one of the largest plants in Europe and had more than 100 full-time and seasonal staff with an annual wages bill of £3 million. It contributed to the local economy in other significant ways, such as paying rent of £500,000 a year to Lerwick Harbour Trust.
“The company has always relied upon substantial support from its bankers in order to operate...in balance sheets for 2002 to 2011, indebtedness to the company’s bankers in excess of £20 million has regularly been recorded,” said Lord Turnbull.
He was told that pre-tax profits had generally been “healthy” in that period - £5.5 million for the last year - but prospects for the current year and the immediate future were not good. A loss of nearly £5 million was predicted.
Lord Turnbull said: “The conduct...was engaged in on a massive scale...under declarations were made by landing masters, with the connivance of the company, on more than 700 occasions. I was satisfied...that the economic advantage which it obtained was at least £2,776,603.”
The judge decided, however, that a confiscation order in the reduced sum of £1.5 million should be made.
“It is presently at the limit of the facilities provided to it by its bankers. The history of the company and the contribution it makes to the local economy are also relevant matters. The company did not take advantage of the practice in which it was engaged to make large payments to its directors or shareholders, or to accumulate substantial assets. The advantage gained was put to the general running of the company and the profits made, both before the investigation and since, have gone to reduce from time to time the company’s level of indebtedness to its bankers. This is in marked contrast to the position of some at least of the vessel masters.”
Setting a fine of £150,000 as “just and fair”, the judge said he gave considerable weight to the way in which the company had conducted itself in the seven years since the offence and the importance given to conservation and sustainability of fish stocks.
“It is perfectly obvious the present company has an approach and set of attitudes which are utterly commendable and entirely distinct from circumstances which pertained in the past,” added Lord Turnbull.
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Weather for Edinburgh
Saturday 18 May 2013
Temperature: 9 C to 13 C
Wind Speed: 18 mph
Wind direction: North east
Temperature: 9 C to 18 C
Wind Speed: 8 mph
Wind direction: North east