Greensill Capital: Scottish ministers rapped on knuckles by watchdog over Lochaber documents

Scottish Ministers breached Freedom of Information legislation by incorrectly claiming they held no information relating to Greensill Capital and the Lochaber guarantee.

In a ruling by the Scottish Information Commissioner, published on Wednesday, the Scottish Government was forced to U-turn on its claim no relevant information was held on the topic.

Ministers were forced to apologise during the transparency probe after what they described as an “oversight”.

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Lochaber £586m guarantee with Scottish Government 'may have breached state aid r...

A member of the public had asked ministers for information about interactions with Greensill Capital in connection with the Lochaber smelter guarantee and reimbursement agreement.

The Lochaber guarantee, when agreed, led to an exposure to the taxpayer worth £586m and allowed Liberty Steel to purchase the smelter on the back of the debt raised from the agreement.

It has been subject to increased scrutiny in the past year after Greensill Capital, Liberty Steel’s main funder, collapsed into insolvency in March 2021, sparking a political and financial scandal.

Officials within the Scottish Government initially claimed they did not hold any information relating to Greensill and the guarantee agreement, but later changed their mind, citing information held on their behalf by legal and commercial advisers fell within the scope of the request.

Nicola Sturgeon was answering questions from MSPs in Holyrood

The decision notice states: “However, during the Commissioner’s investigation, the ministers identified that information, held on their behalf by their legal and commercial advisers, would fall within the scope of the request.

"The ministers apologised for this oversight and conceded they were not entitled to respond to the request in terms of section 17(1) of FOISA.”

Daren Fitzhenry, the information commissioner, concluded: “The Commissioner finds that, by incorrectly informing the applicant that they did not hold information falling within the scope of the request, the ministers failed to comply with section 1(1) of FOISA.”

The Scotsman revealed ministers were advised the guarantee agreement may have breached state aid rules amid the publication of details from a consultancy report.

Documents state ministers secured a security worth £162m, which included the smelter, the connected hydro plant owned by the father of Liberty Steel owner, Sanjeev Gupta, and the land on which the complex sits.

Ministers have consistently claimed the agreement with Liberty Steel and GFG Alliance was not in breach of state aid rules.

A Scottish Government spokesperson said: “Scottish Government officials provided the information sought by the applicant in February this year after reviewing the earlier handling of the case.

"The Scottish Information Commissioner’s decision does not require Ministers to take any action.”

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