Owners of the UK’s last aluminium smelter have insisted investment plans for the Lochaber-based plant are on track as alarm was raised over its failure to file accounts for its businesses in the Highlands.
GFG Alliance, which acquired the 90-year old smelter and its hydropower plant from mining giant Rio Tino in a £330 million deal in 2016, faces having to pay fines as it finalises accounts for Alvance British Aluminium – formerly Liberty Aluminium Lochaber – and its power plant, Simec Lochaber Hydropower.
Companies House records show that Alvance is nearly 11 months late in filing its accounts for the year to the end of March 2020, while the group is more than six months late filing for various business entities associated with the hydropower business.
It is a legal obligation for companies to maintain their paperwork in a timely manner, although fines only amount to just £1,500 for each company.
However Liberal Democrat economy spokesman Willie Rennie said the inability to complete the accounts could be a “warning sign”.
He said: “We must all hope that this failure is not a sign that the smelter and the jobs are at risk but the warning signs have been clear for some time.”
The international conglomerate controlled by tycoon Sanjeev Gupta has faced crisis after crisis since the collapse last year of its lender Greensill Capital, which had had lent GFG, which stands for Gupta Family Group, companies as much as £3.5 billion.
The collapse prompted the Serious Fraud Office (SFO) to launch an investigation into “suspected fraud, fraudulent trading and money laundering” at GFG, raising concerns for the future of its 35,000-strong worldwide workforce, including 3,000 in the UK.
The company has insisted it is working on deals to find new finance as it fights fires fending off creditors in its businesses around the globe.
Most recently GFG has faced a winding up order from HMRC against four of its steel businesses in England over a £26.3m debt.
Mr Gupta and his group of companies has previously come under fire for “opaque” and poorly audited business structures.
The Business, Energy and Industrial Strategy (Beis) committee published a damning report last year into the governance of the group which cast doubt on whether the Anglo-Indian business man was a “fit and proper person” to receive government support, unless he restructured the business “into a more acceptable corporate structure and publishes consolidated accounts that are adequately audited”.
This followed business secretary Kwasi Kwarteng’s refusal to grant Liberty Steel, owner of steelworks in Scotland at Dalzell and Clydebridge, a £170m bail out as he was unable to ensure money provided would stay in the UK.
GFG, which also owns a stake in a major tidal array in the Pentland Firth, admitted the filing of its accounts were “delayed due to the disruption caused by Greensill Capital’s collapse”.
In a statement, the firm said: “We are in contact with Companies House and are now finalising these accounts which will be filed in due course.”
Its acquisition of the aluminium smelter business, which included a 14,000-acre estate that takes in part of Ben Nevis, has come under scrutiny after it emerged the 2016 deal was underwritten by a £586 million Scottish government guarantee to buy energy from the hydro plants.
The deal means the Scottish Government has “significant control” over the Alvance business, which has been operating at Fort William since 1929.
The Scottish Government continues to insist it was “undoubtedly the correct decision” to back the transaction, despite facing criticism over the secretive nature of the deal and delays in promised investment in plant and jobs.
In a statement, a Scottish Government spokesman said GFG was cleaning up its corporate governance act following the launch of a “restructuring and transformation committee” established in the wake of the SFO investigation.
It said: “The Lochaber businesses are aware of their obligations in respect to account filing.
“GFG has been undertaking activity to enhance corporate governance, including the creation of the restructuring and transformation committee in the UK.
“Providing the financial guarantee to protect jobs in the region, underpin additional investment at the site, and promote industry in Scotland, was undoubtedly the correct decision.”
Although GFG did not provide details of more recent trading, the company spokesman said the smelter enjoyed “strong earnings performance last year” on the back of a robust global price for aluminium, which in turn “provides a good platform” for GFG’s plans to develop a recycling and billet casting plant in Fort William.
Unite the union has also confirmed workers at the plant have struck a three year pay deal, underlining ongoing demand for the company’s product.
GFG’s spokesman added: “We are pressing on with front end design and engineering work and working with the local chamber of commerce to overcome a housing shortage so we can develop local talent for our skilled, long-term jobs.”
The smelter employs around 200, up 40 since 2016 according to the Scottish Government, which falls far short of the 2,000 Mr Gupta pledged to create when he bought the facility.
Lochaber Chamber of Commerce chief executive, Frazer Coupland confirmed GFG’s Alvance, along with fellow local employers fish farmer Mowi and timber producer BSW, were “working closely” with the chamber, the Highland Council and Scottish Government to find “innovative ways of providing housing solutions to support the staff required”.
He added: “As Lochaber businesses move towards the Government’s net zero targets it is essential that our businesses are afforded the opportunities and support they need to invest.”
Mr Rennie demanded more transparency from both the GFG and the Scottish Government.
“We need openness from the company about the future of the jobs and the plant and we also need honesty from the Scottish Government on the exposure to taxpayers following the multi-million pound government financial guarantee,” he said.
“We have had next to nothing in return for that guarantee and the promised 2,000 jobs have not materialised.
“We need the SNP government to be straightforward now.”
