Liquidations, Unemployment, Polluted Communities & The Public Purse
Peter Lawwell’s fingerprints and those of a cabal of former Directors have now been found in the coal dust of three Scottish Coal companies plus another company, Monktonhall Colliery, all of which ended up in administration/liquidated. This was after the profits & assets were stripped out in the good times. The latest liquidation, on top of the previous ones, has resulted in 650 unemployed miners being dumped on the slagheap and a massive £60 million remediation/cleanup bill dropping into the lap of the taxpayers as the directors walk out the door. Former mining communities have been left with the threat of pollution affecting the health of their families and the value of their properties & businesses while Local Councils plead with governments to pay for the clean-up . All this while directors walked away with their millions and hide from their responsibilities behind lawyers & liquidators.
Like UK bankers, it appears that these Scottish Coal company directors were quite willing to take the profits while not putting enough aside to rectify the environmental mess they were making in the mining communities of Scotland. They are quite willing to take the profit but want the taxpayer to pay the bill when it all goes to hell.
The Scottish & UK governments have to institute a Royal Commission to investigate the series of administrations/liquidations, the latest of which is that of the Scottish Resource Group and The Scottish Coal companies and examine their modus operandus going over several decades. Only by such an inquiry will the public be reassured that this abuse of the public purse was not the intention from the founding of these companies and directors held to account if it was.
We’ve already seen Peter Lawwell’s involvement in two previous Scottish coal company liquidations:
Damage: Jobs 300 lost, £20 million in losses, Remediation £10’s of millions, Creditors losses?
2. The Scottish Coal (Deep Mine) Liquidation https://footballtaxhavens.wordpress.com/2013/01/13/peter-lawwell-and-the-scottish-coal-deep-mine-company-limited-liquidation/ and the aftermath of the liquidation where the public subsidies agreed while Lawwell was Finance Director came to light: https://footballtaxhavens.wordpress.com/2013/01/13/aftermath-of-the-scottish-coal-deep-mine-company-limited-liquidation/
Damage: Jobs 500 lost, £4.5 million overdraft paid out by Govt, Govt subsidies of £41 million wasted, Remediation £10’s of millions
Now we come to the latest of a long line of liquidations in Scottish coal mining from related companies.
The Scottish Coal Co. Ltd. and Scottish Resource Group Liquidation
Early this year in April 2013, the directors of The Scottish Coal Co. Ltd put the company into Administration putting almost 600 miners onto the dole heap in East Ayrshire, South Lanarkshire and Fife. The company is now in Liquidation. The group holding company Scottish Resource Group Ltd which owned The Scottish Coal Co. Ltd. also went into Administration. The company structure can be seen below:
[Note:The Scottish Coal (Deep Mine) Co. Ltd., the SRG subsidiary which went into liquidation previously in March 2002. see link above]
The Scottish Coal Co. Ltd. shut-down was reported on the BBC website on the 19th April 2013:
‘Almost 600 people have been made redundant, following the collapse of one of Scotland’s biggest coal-mining companies.
‘Directors of Scottish Coal have put the firm into administration.’
‘Its six open cast mines in East Ayrshire, South Lanarkshire and Fife have stopped production.’
‘Scottish Coal is part of the Scottish Resources Group which announced last month that 450 staff were being put on notice of redundancy.’
Liquidators and Directors of Scottish Coal evade Clean-up Bill
On the 17th July 2013 it was reported on the BBC website:
‘Later it emerged that as well as the Scottish Coal & Scottish Resource Group Directors evading their responsibilities by walking away, the Liquidators of both companies are also not going to pick up the clean-up tab. It will fall on the taxpayers again.’
‘On the 17th July 2013 the BBC reported: ‘Liquidators of the Scottish Coal mines operation have escaped responsibility for a £73m clean-up bill.’
‘it was stated money which might otherwise go to creditors of the failed company was being eaten up by the costs of maintaining sites still on SCC’s books.‘
‘As discussion focussed on the clean-up costs legal debate centred on the principle of a liquidator abandoning property, which, the court heard, was unprecedented in Scots law.’
‘As potential costs may eventually may eventually fall to the taxpayer, the Scottish Environmental Protection Agency, Scottish Natural Heritage, East Ayrshire Council and South Lanarkshire Council were also involved in the hearing.’
On the STV website, it reported on the 14th July 2013:
A court decision to give Scottish Coal’s liquidators the right to abandon cleanup operations on opencast mines has been blasted by environmental campaigners.
On Thursday, judges at the Court of Session agreed that the troubled firm could ignore statutory obligations to restrict dust and water pollution and to restore the land afterwards.
The Court also agreed that the company’s liquidators KPMG could pay themselves before making payments to local planning authorities to restore the abandoned mines.
Malcolm Spaven, Chair of the Scottish Opencast Communities Alliance (Soca), said the decision was “a backward step for environmental responsibility“.
He said: “Having trashed the countryside, Scottish Coal are now being given carte blanche to walk away from the mess they have created. They have also created a precedent for any future company to abandon the obligations imposed on them when they were granted planning permission.
“The end result is that Scottish Coal’s directors get to disappear with millions while cash-strapped local authorities and government agencies such as SEPA are left with an impossible bill for clean-up.
“Meanwhile the communities that have had to endure noise, dust and pollution for years face the prospect of many sites never being restored.”
The Lib-Dems had already called in the Scottish Parliament for an inquiry to be set-up on the 20th June 2013:
‘Opencast mining leaves communities “environmentally bankrupt” while making millions for operators, according to Scottish Liberal Democrat leader Willie Rennie.’
‘The MSP has now called for an independent inquiry into how the mines are cleaned up after use.’
‘Restoration bonds are supposed to cover the cost of repairing damage caused by opencast mines. But local authorities such as East Ayrshire and Fife are facing shortfalls, Mr Rennie said.’
‘”While some companies have made millions, communities have been left environmentally bankrupt,” he said during First Minister’s Questions at Holyrood.’
On 24th May 2013 it was reported on the Coal Action Scotland website that an initial report into the opencast coal mining industry said:
‘Most significantly, the report reveals that only £16.1 million are held in Scottish Coal restoration bonds’.
So there is a discrepancy of almost £60 million.
Peter Lawwell’s Involvement
Peter Lawwell was a director at both of Scottish Coal and Scottish Resource Group for 3.5 years
Peter Lawwell left both companies several years ago but these companies have had their profits stripped out over decades and the environmental damage accumulated over that time. Why was there not enough remediation/clean-up fund put aside in a trust during the mines life to be available at the end? Could it be construed, that the plan was to leave the remediation/clean-up costs to the Taxpayer all along, from the time when these companies acquired the Scottish coal mines? This modus operandus can be seen in the liquidations in the previous companies Monktonhall Colliery and The Scottish Coal(Deep Mine) Co. Ltd., at which Peter Lawwell was a Director, and now this has been replicated in the case of The Scottish Coal Co. Ltd. and the Scottish Resource Group Ltd. where he was a director before.
Royal Commission of Inquiry
It is time a Royal Commission is set-up by the Scottish and UK government to examine the operations of all the Scottish coal mining private companies that have gone bust after having the profits stripped out of them then the remediation/clean-up bill for the environmental disasters left behind and handed to the taxpayers and local councils.
Questions Need to be Asked:
What were the obligations placed on the boards & directors of these mining companies when the Scottish mines were acquired from British Coal in 1994?
Did the company directors operate their companies in line with these obligations to clean-up the environment at the end of each mine’s life?
Why were there not enough funds kept back by boards & directors for remediation when they making profits?
Were these companies run right into the ground with the plan that the taxpayer would be left with the clean-up bills?
Should the directors of these companies not be made accountable in terms of fines & bans for their neglect of their duties?
Why again do governments allow Profit to be privatised and Losses dumped on the taxpaying Public while Directors walk away?