The Scottish National Investment Bank (SNIB) has invested £20 million in a venture run by Edinburgh-based businessman Paul Munn, who was previously involved in the disastrous collapse of Farepak that saw 150,000 British savers lose an estimated £50 million.
Munn was one of nine directors of Farepak when the company went into administration in 2006, alongside its parent company European Home Retail. This led to thousands of low-income families losing out on money that had been entrusted to Farepak as part of its Christmas saving scheme.
During the Insolvency Service hearing following the collapse, it emerged that the savers’ money had not been held in trusts and was freely available for the company to use for its everyday operations. The directors had tried to place the funds into a trust but failed to do so, partly because of refusals to do so from the HBOC bank. The Insolvency Service tried to have Munn and the other directors disqualified in light of these failures but were prevented by the High Court.
Munn is now the Investor Relations Director at Par Equity, which has just received £20 million from the SNIB to “enable significant access to crucial scale-up funding to drive growth in the tech sector.”
Scottish Lib Dem economy spokesperson Willie Rennie told the Daily Record that “tens of thousands of Scots lost out when Farepak went bust, so this isn’t a great look for Scotland’s national investment bank.”
“The bank should be at the forefront of helping to build a high-wage and highly skilled economy and that means ensuring its investments are sound and will deliver for people across Scotland.”
The SNIB has previously been criticised for controversies owing to potential conflicts of interest at the Bank, as well as its failure to establish an advisory board despite its legal obligations.
Author: Harry Clynch
