The Scottish National Investment Bank (SNIB) is facing questions about potential conflicts of interests after it emerged that the Bank has invested in three companies with close links to the Scottish Government.
Disruption Banking has identified three separate occasions where the SNIB has invested British taxpayers’ money – totalling £16.5 million – in companies where senior figures have also served on Scottish Government advisory boards. This raises questions as to how Scottish business leaders with government relationships are accessing the SNIB’s allocated public capital.
In June 2022, CEO of renewable energy company Verlume, Richard Knox, was appointed to serve on a Scottish Government ministerial trade board. Less than a year later, in April 2023, Verlume received a £6.6 million investment from the SNIB.
In January 2020, the CEO of biopharmaceutical firm Elasmogen, Caroline Barelle, was appointed to a Scottish government enterprise and skills strategic board. Shortly afterwards, in May 2022, Elasmogen received £3.5 million in taxpayers’ money from the SNIB.
Tidal energy company Nova Innovation secured £6.4 million in investment from the SNIB in September 2021. The company’s former Director, Kevin Norris, has served on the Scottish Government ministerial trade board since February 2019, while its current CEO, Simon Forrest, was appointed to the same board in June 2022.
All three companies deny that the investment involved any conflicts of interest and say they were subject to rigorous due diligence processes.
A Scottish Government spokesperson said: “The Scottish Government routinely engages with a wide range of business leaders to inform policy.
“The Scottish National Investment Bank’s investment decisions are made on a purely commercial basis, carrying out due diligence, with no involvement from the Scottish Government.”
The SNIB also added the Bank “maintains operational independence from the Scottish Government. Any investment decisions are overseen by a formal Investment Committee who rigorously and objectively assess each business case on its commercial merits and its anticipated impact against the Bank’s missions.”
However, a senior politician raised concerns that the SNIB’s due diligence procedures are not fully transparent and that current processes are insufficient to manage potential conflicts of interest. SNIB’s publicly available investment strategy, which mentions its due diligence practices, makes no mention of how the Bank handles potential conflicts of interest.
Liz Smith, the Shadow Cabinet Secretary for Finance and the Economy in Holyrood, told Disruption Banking that she “fully supports the moves taken by the Scottish Parliament’s Economy Committee to hold the SNIB to account.”
“It is essential that there is full transparency when it comes to the use of public money.”
Author: Harry Clynch