Small and Medium sized Enterprise (SME) housebuilders emergency Covid liquidity fund: FOI release

Information request and response under the Freedom of Information (Scotland) Act 2002.


Information requested

Information on the award of a loan made to Kapital Residential Limited through the Scottish Government SME Liquidity Fund.

1) When the initial loan was granted what percentage of the loan was;
a) Secured against Greenfield House
b) Secured against the Lundin Links Hotel
c) Remained unsecured.

2) When the loan was restructured to be secured against a single property what percentage of the remaining loan was;
a) Secured against the Lundin Links Hotel
b) Remained unsecured

3) What was the total, including interest, due to be repaid at the end of July 2022.

4) Is there an estimate of how much of the total outstanding the Scottish Government might now recover, if so what is it.

5) Where were the 44 houses that were under construction in March 2020 located.

6) How many of those houses were completed, when were they completed and where are the completed houses located.

7) How many jobs did the loan secure and how many people were made redundant when the company went into liquidation.

8) Will the Scottish Government be investigating if the information it was given to provide the original loan, and later to secure the balance against a single property,  was accurate.

9) What action will the Scottish Government take if it is found that Kapital Residential Ltd did not in fact meet the criteria for the loan.

10) Does the Scottish Government have a specific department which investigates fraud if so what are its contact details and will it be investigating the circumstances of this loan.

Response

1) When the initial loan was granted what percentage of the loan was;
a) Secured against Greenfield House
b) Secured against the Lundin Links Hotel

c) Remained unsecured.

1) Security was not apportioned on a percentage basis against the loan. The Scottish Government was granted first ranking security over the sites known as Greenfield House and Lundin Links Hotel.

2) When the loan was restructured to be secured against a single property what percentage of the remaining loan was;
a) Secured against the Lundin Links Hotel
b) Remained unsecured


2 – Security was not apportioned on a percentage basis against the loan.

3) What was the total, including interest, due to be repaid at the end of July 2022.

3) The total, including interest, due to be repaid at the end of July 2022 was £728,930.

4) Is there an estimate of how much of the total outstanding the Scottish Government might now recover, if so what is it.

4) The Scottish Government does not hold this information. A liquidator has been appointed and is responsible for the realisation of the assets and property of the company to pay off the outstanding debts and liabilities. This process is ongoing.

5) Where were the 44 houses that were under construction in March 2020 located.

5) The Scottish Government does not hold this information.

6) How many of those houses were completed, when were they completed and where are the completed houses located.

6) The Scottish Government does not hold this information.

7) How many jobs did the loan secure and how many people were made redundant when the company went into liquidation.

7) Kapital Residential Ltd stated that they employed 13 employees when they made their application. Scottish Government does not hold information on the number of people who were made redundant when the company went into liquidation.

8) Will the Scottish Government be investigating if the information it was given to provide the original loan, and later to secure the balance against a single property,  was accurate.


8) Details of the approach followed by the Scottish Government can be found in the Scottish Public Finance Manual.

9) What action will the Scottish Government take if it is found that Kapital Residential Ltd did not in fact meet the criteria for the loan.

9) The evidence to support any allegation that Kapital Residential did not meet the criteria would have to be investigated before the course of action could be determined. This would be guided by the Scottish Public Finance Manual.

10) Does the Scottish Government have a specific department which investigates fraud if so what are its contact details and will it be investigating the circumstances of this loan.

10) Details of the Scottish Government’s counter fraud strategy, policy and response plan can be found in the Scottish Public Finance Manual. More Homes Division follows this guidance for any suspected fraud.

While our aim is to provide information whenever possible, in this instance the Scottish Government does not have some of the information you have requested. The reasons why we do not have the information are explained below:

4, 5, and 6 - This information is not held by the Scottish Government.

About FOI

The Scottish Government is committed to publishing all information released in response to Freedom of Information requests. View all FOI responses at http://www.gov.scot/foi-responses.

Contact

Please quote the FOI reference
Central Enquiry Unit
Email: ceu@gov.scot
Phone: 0300 244 4000

The Scottish Government
St Andrews House
Regent Road
Edinburgh
EH1 3DG

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