The Chamber said it had become aware of “unacceptable work practices” on the part of a small number of former employees at Edinburgh Business Development (EBD), which helps businesses to grow and offers training to get people back into work.
Police said they had been made aware of alleged financial irregularities and inquiries were ongoing to establish whether any criminality was involved. Meanwhile, a company set up by the Scottish Chambers of Commerce to help firms boost their exports has gone into liquidation.
Scottish Chambers Inter- national (SCI) was established just last year to help businesses take advantage of international trade opportunities and was a key player in running the Scottish Government-supported “Smart Exporter” programme. SCI was originally managed by EBD, but then transferred to an independent board.
A statement from the boards of the Edinburgh Chamber of Commerce group of companies said they had received reports of financial difficulties related to the valuations of work in progress in EBD towards the end of the last financial year.
It said financial consultants PWC were instructed to provide an independent analysis of the position.
It said: “PWC, together with our boards, and in the light of helpful information provided by former employees, identified previously unknown unacceptable work practices on the part of a small number of former employees.
“The boards, acting with the chief executive, Ron Hewitt, took the step of reporting these unacceptable practices to Lothian and Borders Police, who are currently carrying out an investigation. The boards, and the senior management and other staff at the Chamber group, are giving full support to this police investigation.”
The statement said that with the support of PWC, a recovery plan had now been put in place.
“The council of the Chamber will meet shortly to consider these matters,” it added
SCI was the brainchild of EBD managing director Alasdair Kerr, who wanted to bring together the expertise of the international trade divisions of all Scotland’s leading chambers of commerce, offering specialist international trade support services to businesses with global trade ambitions.
However, it is understood the EBD board eventually decided it could not take responsibility for the costs and risks involved and an independent SCI board was set up in March this year. Mr Kerr transferred to the new body as managing director.
But sources today claimed the business model for SCI’s involvement in the Smart Exporter programme proved flawed and the revenue it had expected failed to materialise.
Liz Cameron, chief executive of Scottish Chambers of Commerce, issued a statement on behalf of the directors of SCI Limited, confirming the liquidation move.