Ministers last week said that six-figure losses made by The Gathering 2009 Ltd, run by Tory peer Lord Sempill, would be borne by the public purse.
The company is now under scrutiny after confirming that it made out a £38,000 loan to another firm partly owned by Lord Sempill – a sum that is also going to be written off.
The Gathering 2009 Ltd was provided with around £500,000 of public money to help stage the celebration, which included a two-day Highland Games event in Holyrood Park.
Although it was claimed the event attracted more than 47,000 people, the firm behind it made a £600,000 loss.
Half of the sum, due to private sector creditors, is to be picked up by the Destination Edinburgh Marketing Alliance, a public-private organisation that will organise another Clan Gathering.
The SNP government is to take on board the remaining £291,000, which is made up of monies due to Historic Scotland, Lothian and Borders police and the Scottish Ambulance Service.
It also includes writing off a £180,000 loan the government made to The Gathering 2009 Ltd this year, help that was originally offered to allay the firm’s cash-flow problems.
In a Sunday Herald investigation we can reveal the company’s 2009 accounts show that it made out a £38,809 loan to Panalba Ltd, a firm in which Lord Sempill is a director and owns a 25% stake.
Panalba was incorporated in September last year and has yet to file full accounts.
A spokesman for The Gathering 2009 initially told the Sunday Herald: “Panalba is owned by similar people, but it is not really anything to do with the Gathering.”
After he was informed about the loan, the spokesman said there was a “synergy” between the two companies, describing Panalba as a social networking website set up “partially” to promote the Clan Gathering, and that the loan was required to fund the website. He declined to name the firm paid to construct the website.
As of September 16, when Panalba’s six-month draft management accounts were produced, the loan was still unpaid.
The firm’s official spokesman said: “If they [Panalba] were in a position to repay the loan as a gesture of goodwill to the public, they would, but they are not able to. It is another one that is going to have to be written off.”
A source close to the company said that the loan would be offset against £32,800 of website management provided by another Panalba director.
Lord Sempill is a hereditary peer and a former Conservative parliamentary candidate who is listed as a former director of several dissolved companies, including Scotch Direct Ltd, Malt Masterclass, and Holyrood Strategy.
He said: “Panalba is not cash rich and is not in a position to pay back the loan. It makes sense to cancel the loan against the work carried out by another director.”
Margo Macdonald, an MSP for the Lothians, said: “There is too much money involved here for it simply to be dismissed. A proper breakdown of the loan is called for here. It’s got to be a government department that investigates it in the first instance.”
Labour MP Tom Harris said: “It seems extraordinary that the SNP are prepared to hand over so much taxpayers’ money without due diligence. I think Audit Scotland needs to investigate this grant. The Year of Homecoming has been badly handled from start to finish.”
A Scottish Government spokesperson said: “Before agreeing to provide the £180,000 loan in June 2009, detailed discussions with the company were held about a specific cash-flow issue the company were experiencing, in relation to income from ticket sales being held by World Pay until after the event had taken place.”
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