The Scottish National Investment Bank (SNIB) is facing fresh questions about its handling of public money as Disruption Banking reveals the Bank invested £7.5 million in a loss-making firm that failed to file company accounts for 26 months.
Records available on Companies House show that the travel technology company TravelNest made a loss of £4.3 million in the year ending December 2021. However, the company did not submit their accounts until April 2023. During this period, in which TravelNest did not submit accounts for 26 months, Companies House had a “red overdue flag” on the tech firm.
Despite this, in March 2022, the SNIB invested £7.5 million in TravelNest. Disruption Banking previously revealed that the CEO of TravelNest, Doug Stephenson, had family connections to the SNIB. His sister served as an “Investment Origination Analyst” between January 2021 and August 2022, leaving shortly after the investment in TravelNest was made.
The TravelNest deal has been scrutinised in the Scottish Parliament owing to the controversial role played by Mark Logan, who has served as a government advisor since May 2020 and last year was appointed “Chief Entrepreneurial Advisor to the Scottish Government.”
Logan has had a personal financial interest in TravelNest for several years. In 2017, Logan participated in a £3 million funding round and became a Non-Executive Director of the company. However, he was also involved with the SNIB at the same time the Bank invested £7.5 million of taxpayers’ money in TravelNest.
As Graham Simpson, the Tory MSP for Central Scotland, pointed out to Holyrood’s Economy and Fair Work Committee, Logan personally wrote the SNIB’s review of TravelNest that says: “investment in TravelNest supports the Bank’s mission to invest in innovation and industries of the future and supports key elements of the Scottish Technology Ecosystem Review.”
When Simpson suggested to Logan on 11th January 2023 that this represented a potential conflict of interest, Logan replied that he had resigned from his post at TravelNest. However, Companies House documents suggest that Logan resigned two weeks later, on 26th January 2023. The Scottish Government told Disruption Banking that Logan provided them with evidence, in the form of his resignation letter, that he resigned on the 5th January but said “it would not be appropriate for the Scottish Government to share such documents relating to a private company.”
The SNIB said: “As with all of our investments, detailed due diligence is conducted before any investment is made in the company.
“All investment decisions are overseen by the Bank’s independent investment committee who rigorously and objectively assess each business case on its commercial merits, its anticipated impact against the Bank’s missions, and the Bank’s remit as a patient investor.
“Timing of filing the accounts is a decision for the directors of the company, adhering to their fiduciary duties as standard. The filing date can be influenced by factors such as the timing of completion of funding.
“The Bank noted Mark Logan’s Directorship of TravelNest before the investment committee process commenced. Mark Logan does not hold a role with the Bank and therefore has no involvement or influence in the Bank’s investment processes.”
Mark Logan did not respond to a request for comment.
Author: Harry Clynch
