A SCOTTISH Enterprise awards scheme for business start-ups is under fire after a firm founded by a disqualified director was given £50,000 of public money.

Log Six Systems, which claims to have developed a chemical that kills all superbugs "known to man", was given the cash despite Scottish Enterprise knowing that its founder Stephen Roberts, pictured above (left) with Finance Secretary John Swinney, had been described by a judge as "evasive and devious".

The former bankrupt was also taken abroad yesterday as part of a trade delegation organised by Scottish Enterprise's foreign arm.

Tory MSP Murdo Fraser said the jobs quango had "serious questions to answer".

The money was awarded through the Scottish Edge, a Dragons' Den-style competition that awards cash to entrepreneurs. Run by SE on behalf of the Scottish Government, it has a £2 million pot available.

In June, a distinguished panel including quango chair Crawford Gillies and tycoon Sir Willie Haughey listened to funding pitches and grilled the applicants. SNP Finance Secretary John Swinney presented the awards.

However, questions are now being asked about the due diligence Scottish Enterprise carried out on the fledgling organisations.

Log Six Systems, a firm incorporated in September last year, was awarded the maximum £50,000 at the event. The company has two directors, but the organisation's "founder" is Ayrshire-based Roberts, according to his social-media profile. He is also the frontman for the company.

On the crowd-funding website Square Knot, in which Log Six Systems is seeking to raise £150,000, Roberts explained the firm's "miracle" healthcare product: "We kill superbugs, but we can do it 12 times faster and 100 times cheaper than existing disinfection methods."

In another video, this time addressing an audience at Heriot-Watt University, Roberts said of the "pre-revenue" firm: "We have developed a high-efficacy disinfectant chemical, which has been proven to kill every pathogen known to man."

However, Roberts has a highly questionable business past.

In 2010, he was disqualified from holding a directorship for four years - a ban that remains in place until July next year.

According to the Insolvency Service, Roberts was banned after he "failed to ensure" that a previous firm, Innova Business Solutions, from which he drew a salary of £125,000, paid its national insurance, VAT and PAYE contributions. At the time of liquidation, Innova owed the taxman £292,882.14.

In March 2011, a tribunal judge also criticised Roberts over Innova's tax affairs. The tax authorities had issued him and his then business partner with a "personal liability notice" over £90,959 of unpaid national insurance - a decision they appealed.

The judge rejected the appeal, noting: "They were responsible for the decision each month, while Innova traded, not to pay NIC and PAYE tax and chose instead to pay other creditors and their own salaries; they thus propped up for as long as possible an ailing business with funds which should have been remitted to HMRC."

He added: "No reasonable and prudent businessman would have behaved in this way or conducted business in this manner."

The judge added that "it is clear that a pattern has developed over the years whereby a company controlled by the appellants fails to pay NIC and PAYE tax; the company becomes insolvent, with debts due to inter alios, HMRC, and then goes into liquidation; a new successor company rises phoenix-like from the ashes of the insolvent company, trades for a time, becomes insolvent, with debts due to inter alios, HMRC, and then goes into liquidation ..."

On Roberts, he stated: "In cross examination he was evasive and devious." He was made bankrupt six months later over debts of £860,493 then founded Log Six Systems in the same month his bankruptcy expired. He is currently part of a 26-person trade delegation to the United Arab Emirates, organised by Scottish Development International.

REACTION

Tory MSP Murdo Fraser said: "A business failure in itself is not a reason to criticise someone, but in this case the matter is much more serious, with damning findings in court against Mr Roberts. Scottish Enterprise, who are distributing taxpayers' money, have serious questions to answer."

Log Six Systems founder Stephen Roberts said: "Was Scottish Enterprise aware of my background prior to our application to the Edge Fund? The answer to the questions was, and still is - they were fully aware. That's all I have to say on that matter."

Eleanor Mitchell, director of commercialisation at Scottish Enterprise, said: "Log Six Systems met all set criteria for the Scottish Edge competition, disclosed Mr Roberts' previous history as a director, and went through a robust due diligence process.

"The company's potential for growth was considered by our panel of highly experienced business people, who judged it a worthy winner of Edge funding."