Seach for the missing millions of bankrupt tycoon who helped to bankroll the Tories

Investigations Editor

Sunday 29 July 2012

CREDITORS and administrators are trying to trace the assets of a bankrupt tycoon who was one of the Scottish Tory party's biggest donors.

Malcolm Scott

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EXCLUSIVE By Paul Hutcheon

Malcolm Scott's business empire collapsed earlier this year after he could not repay millions of pounds borrowed from banks.

The Edinburgh-born-and-bred tycoon is facing questions about where the money went, while financial investigators are seeking to locate unaccounted-for assets, such as two Persian rugs worth about £50,000.

Scott's parents have also become embroiled in the financial mess after they gave personal guarantees for their son's debt worth £20 million.For the past seven years, Scott has been one of the key Tory figures north of the Border. He donated about £1.6m to the party and was being tipped for a peerage.He allowed Prime Minister David Cameron and Foreign Secretary William Hague, his strongest political ally, to use his private jet and was treasurer of the Scottish party.Scott's millionaire status had been built on a portfolio of grain and property interests, bolstered by leased pubs in Edinburgh. His problems came about after he borrowed millions against the value of his land holdings, which he then struggled to pay back.Owing millions to Barclays, Lloyds and Societe Generale, his businesses were put into administration. The Bank Of Scotland (Ireland) Limited then successfully petitioned a court last month for his sequestration.Scott's personal properties – a nine-bedroom mansion in Kirknewton, West Lothian and a £706,000 retreat in Elie, Fife – were also put up for sale.As well as giving generously to the Conservatives and the Prince's Trust, the Old Fettesian is believed to have spent millions of dollars on a private jet, which has now been sold.The Sunday Herald can reveal he spent at least £2m on gardening for his £1.85m house in Kirknewton.Creditors and political figures are now demanding answers about what Scott spent his fortune on. One source close to the administration process said: "The question the creditors are asking is: 'Where did all the money he borrowed go?'."Ernst & Young, one of the administration firms, is also making enquiries about assets held by Scott's former firms.According to an official statement, the company is "investigating" the sale of 16,600 tonnes of malting barley and 2000 tonnes of standard barley sold before the company's appointment.The same document states that there is also an "investigation into the whereabouts" of silver and Persian rugs with book values of £1743 and £45,500 respectively.Scott's father, David, a respected businessman in his own right, last year signed a "personal guarantee" to meet £10m of his son's personal and corporate obligations, while in January this year, his mother, Florence signed an almost identical guarantee for the same amount.An employee at one of Scott's former leased pubs in Edinburgh has criticised his one-time boss. Neil Butler, the manager of the Fiddler's Arms, said he regularly had to pay suppliers out of his own pocket.He recalled: "Malcolm Scott was never there. You could never get in touch with him. He was an absolute nightmare."Butler said there was little respect for the tycoon: "Somebody wrote in the women's toilets, 'Malcolm Scott is a w*****'. Nobody took it down."The manager said the pub had been transformed since Scott's departure.An SNP spokesman said: "Answers on where this money has gone must be forthcoming. "If Mr Scott is unable to provide clear evidence on what was spent where, then the onus is on the Conservative Party in Scotland to detail exactly every pound, penny and gift they received from their former treasurer."Labour MSP Elaine Murray said: "I hope the Scottish Tories state categorically that they will not accept a single penny from Scott at any point in the future until all his debts and purse adding liabilities are paid in full."Scott could not be contacted yesterday, while his mother said: "I'm sorry, I can't speak to you."

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Seach for the missing millions of bankrupt tycoon who helped to bankroll the Tories

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