MINISTERS have been accused of concealing the real reason for sinking millions of pounds of public money into Ferguson's shipyard to avoid claims of acting unlawfully.
The yard's former owner Jim McColl has spoken out about a planned money trail inquiry and claims the real reason for a controversial £30m Scottish Government loan in June 2018 was not divulged to avoid unlawful state aid issues.
Concerns over a cover-up have risen as Scottish Government documents show that while ministers were publicly saying that the loan was in place to diversify the business - it was actually because Ferguson Marine was in financial trouble while dealing with the calamitous contract to build two lifeline ferries for Scottish islands.
Confidential Scottish Government papers have revealed that the Lord Advocate James Wolffe had been briefed and sought answers over the loan. It came against a background of avoiding unlawful state aid concerns.
The intent of state aid rules is to avoid financial assistance given by a government that favours a certain company or commercial group and which has the potential to distort market competition.
Mr McColl said he would 'bet my life' that there was 'nothing to see' in relation to where a total of £128m ploughed into the firm was spent, and believes the inquiry is a distraction from wider issues regarding the handling of the project.
Failed attempts have been made by Audit Scotland to establish where pre-nationalisation Ferguson Marine Engineering Limited (FMEL) under Mr McColl spent over £128.25m in public money in relation to the building of two long-delayed lifeline ferries before it was nationalised at the end of 2019.
Included in the audit scrutiny is the £30m loan which the Scottish Government said would provide working capital alongside investment from Mr McColl's Clyde Blowers Capital firm to help FMEL "diversify its business".
Then finance secretary Derek Mackay said it was a 'strategic investment in our industrial capability as both the marine engineering sector and commercial shipbuilding have vital roles to play in Scotland’s future'.
But internal Scottish Government documents reveal that the agreement was clearly linked to the delivery of the vessels and the dispute between FMEL, which was then a struggling company, and CMAL over the rising ferry costs.
Mr McColl said: "The reason that the government gave for claiming that the £30m loan was to further diversify the business was to avoid being accused of state aid.
"All of the funding by the government went towards progressing the build of the ships and this was verified."
One confidential memo said Liz Ditchburn, the Scottish Government's director general of economy, said that the loan agreement as negotiated represented a 'legitimate basis for action' and that the 'consideration of regularity, propriety, and value for money have been considered and I believe are satisfied on the basis of evidence and advice available to me'.
Administration was 'a real risk' which could 'damage the business, even further delay vessel delivery and risk generating significant job losses'.
Audit Scotland is to carry out a new wave of monitoring over the ferry fiasco - and is to carry out a full costing of the project if and when the vessels have been completed.
Scotland's Auditor General Stephen Boyle has been seeking to uncover what happened to the public money that was provided to support both the shipyard firm and the beleaguered project before nationalisation.
Mr McColl said: "There was no question that FMEL had received payments for work that had not been completed."
The businessman added: "They should not be allowed to claim that they did not go into detail of where the money went. They knew exactly where the money went... otherwise how could they sanction the drawdown."
David Tydeman, chief executive of the now nationalised Ferguson Marine had been asked for help in tracing what happened to the £128m which was ploughed into the firm before it was nationalised.
He previously said they had not sought to evaulate old files because they 'do not add value to the planning or budgeting work still needed to complete the vessels'.
He previously told MSPs he did not have details of the £45m taxpayer-funded loan and had been focussing on the the £83.25m paid by CMAL.
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