Money

Scottish Enterprise wrote off £131 million from failed investments during past decade



Economic development agency Scottish Enterprise has written off £131m of public money during the past decade due to failed investments.

The public body has a remit from the government that enables it to invest in the shares of businesses and provide them with loans or grants.

Its annual accounts revealed the figure for the period between April 2010 and March 2020, comprising those shares, grants and loans which failed to achieve value.

The reports mention more than 750 cases, but only provides specific information on incidents where the loss was greater than £250,000.

Wave power companies Pelamis and Aquamarine Technology were the single biggest losses made by the body. It had to write off £16.3m for Pelamis in 2014-2015, with £15.2m being written off the following year for Aquamarine Technology.

The companies were expected to help speed up the nation’s move to renewable energy. However, they both went into liquidation after running out of cash and failed to prove the technology was commercially viable.

The third largest sum went to Fife shop fitter and commercial furniture maker Havelock Europa, which went bust in 2019 losing £3.2m.

Scottish Enterprise also reported a £2.7m loss in its 2020 accounts for Edinburgh-based software developer NetThings, which went into administration towards the end of 2018.

Other notable investments it made losses on were Burntisland Fabrication (BiFab), in which it cancelled the debt for £1.45m in 2019.

BiFab, which had steel fabrication yards in Fife and the Isle of Lewis, went under last year after failing to secure any new contracts to build offshore platforms for wind turbines.

The Scottish Government directly invested £37m into BiFab via equity and loans, and had offered a further £15m loan facility.

Elsewhere, Scottish Enterprise lost £1.5m on its investment on Inside Biometrics, which went into administration and was dissolved in 2019. 

It lost the full investment, despite the company being bought out of administration in 2017 and changing its name to International Biometrics International.

The body lost £2.4m in 2017 on an investment into Aberdeen based Gas2, which spent 10 years developing gas to liquid technology to be used in gas fields. However, the slump in oil price meant the company was unable to raise further funds and went into liquidation.

Another high-profile write-off was the £1m invested in social networking website Talent Nation, launched in 2009 by former Scottish Sun editor Steve Sampson, which attracted Celtic midfielder Scott Brown and ex-Rangers striker Kenny Miller as investors.

It went into liquidation in 2011, following the Scottish Enterprise taking the company to court over unpaid payments to Olympian Brian Whittle.

A spokeswoman for Scottish Enterprise said: “Our equity investment activities are not without risk, however, many of our investee companies go on to attract significant further private investment and become globally successful businesses creating jobs and ultimately benefiting the Scottish economy in the longer term.

“Since 2003 Scottish Enterprise has invested £624m, which has in turn has leveraged £1.75bn in private sector investment, creating growth across the Scottish economy.”

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