The Scottish National Investment Bank (SNIB) has come under fire in Holyrood, with Members of the Scottish Parliament raising concerns about the Bank’s operations after Disruption Banking reporting revealed potential conflicts of interest.
Douglas Lumsden, the Conservative MSP for North East Scotland, questioned ministers yesterday over their failure to establish an advisory board for the Bank. In June, Disruption Banking noted that the Bank may be operating unlawfully as ministers have not established a board to oversee the Bank’s operations, contrary to the legislation that mandated the opening of the SNIB.
“The Scottish National Investment Bank has been in operation for three years now and, recently, serious allegations have been made against it. One is that the bank lent £7.5 million to a company that is run by the brother of a bank employee — a company that was loss making and whose accounts were overdue. It has also been reported that there was political pressure to invest £9 million in Circularity Scotland, most of which has now been lost,” Lumsden said.
“I do not know whether those accusations are true, but I know that, if the advisory board was in place, as is required in law, we would have the assurance that things were in order. Does the cabinet secretary accept that it is vital that the advisory board is put in place as soon as possible?” he asked.
The cabinet secretary, Neil Gray, agreed that an advisory board should be put in place but did not provide any further details about when this would happen, saying only that it would “be set up as soon as possible, now that the Bank is fully operational.”
Ash Regan, the Alba MSP for Edinburgh Eastern, followed up with another question about potential conflicts of interest at the Bank. She referred to the case of the Bank investing £5 million of taxpayers’ money in a firm partly owned by one of its own directors, which Disruption Banking revealed in August.
“In light of recent reports that the Scottish National Investment Bank is investing in firms that are linked to personnel at the bank, what work is the Scottish Government undertaking to improve transparency at the bank, avoid such conflicts of interest, and meet the high standards that are expected of a public entity?” Regan asked Neil Gray.
Gray responded only that “all investments are made in a transparent way so that people can see them clearly.” However, the SNIB has previously refused to disclose its conflicts of interest register.
Further questions are likely to be raised over the SNIB’s activities as concerns grow over how the Bank is using taxpayers’ money. Disruption Banking revealed that the SNIB has invested £16.5 million in three companies run by individuals linked to the Scottish Government.
Author: Harry Clynch
