A ROW has broken out over a £7.3m Scottish Enterprise grant to a transport firm with deep financial links to leading SNP donor Sir Brian Souter.

Bus manufacturer Alexander Dennis Ltd (ADL) made an £18.5m profit last year but has been awarded the biggest research and development payment in the quango’s history.

A majority of ADL shares are owned by HGT Investments Ltd, which is controlled by two firms owned by Highland Global Transport Ltd. Sir Brian is the largest shareholder in HGT, followed by Gloag, who has no financial connections to the SNP.

Neither Souter nor Gloag are directors of ADL and nor do they have any involvement in the management of the firm.

Labour MSP Jackie Baillie said: "There are serious questions to be asked about transparency here. Taxpayer cash going to support R&D in Scottish industry is unquestionably a good thing, but the fact that it has gone to a company with commercial ties to a man who has given millions to the SNP could attract accusations of cronyism.”

However, Adrian Gillespie, Managing Director at Scottish Enterprise, defended the award:

“We support R&D investment by businesses in Scotland because evidence shows it boosts productivity and growth.

“Eligibility criteria and the application process is the same for every company and we follow a robust diligence process, including an independent external evaluation, so we can be sure that our contribution is generating additional jobs and a positive impact for the economy.”

ADL is a leading bus and coach manufacturer based in Falkirk which employs around 2,000 people across the globe.

It specialises in making environmentally-friendly, fuel-efficient vehicles and is a growing company.

The £7.3m grant, announced by Scottish Enterprise last week, is to accelerate ADL’s £31m low-carbon vehicles programme, create 101 new jobs and secure 126 existing posts.

First Minister Nicola Sturgeon visited the company on the same day as the award was announced and the Scottish Government issued a press release about the award.

However, Labour have questioned the grant due to the involvement of Souter in ADL.

Sir Brian and his sister Ann Gloag collectively hold, via companies they control, 55.1% of the shares and voting rights in the company.

The multi-millionaire tycoon, who is also the chairman and co-founder of transport giant Stagecoach, has donated around £2.6m to the SNP and effectively bankrolled the party’s 2007 and 2011 Holyrood election campaigns.

ADL also attracted the record R&D grant despite being a hugely successful company.

Turnover in 2015 was around £602m, up from £494.5m in the previous year, while the Group’s post-tax profits also rose from £10.5m to £18.5m.

In the same year, a dividend of £7.8m were approved and paid.

Baillie added: "We've been here before with Brian Souter and the SNP. It was just a few months ago that Brian Souter knew about a deal the SNP signed with a Chinese consortium before anyone else in Scotland.

"Meanwhile bus passengers across Scotland are seeing routes cut and fares rise because the SNP repeatedly block Labour's plan to regulate the industry – something Brian Souter staunchly opposes. The last decade of SNP Government has been pretty good for Brian Souter."

A spokesperson for ADL said: “ADL is pleased to have passed stringent, transparent and independently-audited criteria as part of the rigorous selection process to qualify for the £7.3m Scottish Enterprise grant. This grant, complemented by our own investment of £24m, will be used for several R&D projects, developing new technologies and products to respond to low carbon requirements in the UK and international markets.”