Ferguson Marine - 'Subscription & Shareholders Agreement'

The request was partially successful.

Dear Scottish Ministers,

Please provide a copy of the 'Subscription and Shareholders Agreement' as referenced in the June 2018 loan agreement between Scottish Ministers, Ferguson Marine Engineering (Holdings) Limited and Ferguson Marine Engineering Limited.

Please acknowledge receipt of this FOI request.

Yours faithfully,

Mr Paterson

Dear Scottish Ministers,

I note that I have not received acknowledgement of my FOI request "Ferguson Marine - Subscription & Shareholders Agreement" dated 20 December 2018.

Please acknowledge receipt of my FOI request.

Yours faithfully,

Mr Paterson

Scottish Government

FOISA Acknowledgment of request

Thank you for your request seeking a copy of the Subscription and
Shareholders Agreement in relation to the June 2018 loan agreement between
Scottish Ministers and FMEL.

We received your request on 20 December 2018 and will respond in
accordance with FOISA by 23 January 2019.

If you have any queries, please feel free to contact me quoting case
number FoI/19/00022.

Kind regards,

Jennifer Moore

 

Jennifer Moore

Policy Officer, Strategic Industrial Projects

Innovation, Investment and Industries

 

Directorate for Economic Development

Scottish Government, 3^rd Floor, Atlantic Quay, 150 Broomielaw, Glasgow G2
8LU

 

'013124(44386)

'07584206983

y[1][email address]

 

 

 

 

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Scottish Government

1 Attachment

Mr Paterson

 

Please find attached a response to your FoI request received on 20
December 2018.

 

Kind Regards

Jennifer

 

Jennifer Moore

Policy Officer, Strategic Industrial Projects

Innovation, Investment and Industries

 

Directorate for Economic Development

Scottish Government, 3^rd Floor, Atlantic Quay, 150 Broomielaw, Glasgow G2
8LU

 

'013124(44386)

'07584206983

y[1][email address]

 

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References

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1. mailto:[email address]

Dear Scottish Ministers,

Message for Mary McAllan, Director of Economic Development

Request for internal review: FOI/19/00022

The response to my request is unsatisfactory. The response falls considerably short of expectations and shows contempt for FOISA and information users.

There is no exemption available under FOISA to completely withhold all information.

“may prejudice” is not an exemption available under FOISA.

I draw your attention to guidance from the Scottish Information Commissioner:

“The exemption in section 33(1)(b) can only be applied where disclosure would, or would be likely to, cause substantial prejudice. There must be at least a significant probability that substantial prejudice would occur in order for the exemption to be properly applied. There must also be a genuine link between disclosure and the harm: it cannot simply be a remote or hypothetical possibility.”

Further:

“Where the authority considers that the commercial interests of a third party would (or would be likely to) be harmed, it must make this clear, and must indicate the nature of those commercial interests and how these interests would, or would be likely to, be prejudiced substantially.”

Public interest test:

“I am not comfortable with the view that the public interest test is purely subjective. It is not simply a “finger in the air” exercise. When carrying out the test, an authority must identify and set out the competing arguments as to how the public interest would be served by disclosure of the information and how it would be served by withholding the information. Having identified the public interest arguments on each side, the authority must then carry out a balancing exercise to determine where the public interest lies. Where the balance is even, the information should be disclosed.”

Clearly there are substantial public interest arguments for full disclosure as part of a transparent and accountable government. Public interest arguments for disclosure have been ignored in the response.

Please acknowledge my request for internal review.

Yours faithfully,

Mr Paterson

Scottish Government

1 Attachment

Dear Mr Paterson

 

Please see attached letter acknowledging your request of a review of our
response to your request ref FOI/19/00022 under the Freedom of Information
(Scotland) Act 2002

 

Regards

 

 

Cathy Cacace│ Head of Performance and Governance│European Structural
Funds│3rd Floor│150 Broomielaw│Glasgow│G2 8LU│0131 244
1239│07816073316│[email address]

 

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Dear Scottish Ministers,

Cathy Cacace│ Head of Performance and Governance│European Structural Funds

FOI: 19/00022

Thank you for acknowledging receipt of my request for internal review.

In addition to the matters set out in my request for internal review, I would like to add the following matters as support for full disclosure:

1. False use of section 33(1)(b) by Ministers to prevent public and political scrutiny of government decision making and the use of £30 million of public funds.

Scottish Ministers are transferring large sums of public money into the private sector without public and political scrutiny. A loan of £30 million is being converted into share warrants with a nominal value of just 10% of the loan value. In turn, the value of the shares, given the financial condition of Ferguson Marine Engineering Limited, will be negligible. The £30m loan is retained by the company and used to fund cost overruns on an onerous contract for the construction of two public-use ferries (a £97m contract with Caledonian Maritime Assets Limited – a company wholly owned by Scottish Ministers).

Ministers are misleading (including through material omission) Parliament and the public in representing the transaction as a ‘loan’. It is, therefore, in the public interest that full circumstances of the subscription / shareholding arrangement are disclosed.

2. Information already in the public domain

Some information about the subscription and shareholding arrangement is in the public domain as it is publicly available at Companies House – Ferguson Marine Engineering (Holdings) Limited Annual Financial Statements 2016 (published 19 December 2018) and Articles of Association (published 2 July 2018). The following is an extract:

“On 25 June 2018, Ferguson Marine Engineering (Holdings) Limited (“Holdings”) entered into a £30m secured loan agreement with The Scottish Ministers. The loan has a repayment date of 25 June 2028. The loan accrues interest at a fixed rate of 13% per annum. On the same day, a Warrant Instrument was entered into which provides for Holdings to issue warrants to The Scottish Ministers on a quarterly basis (commencing 30 September 2018) in respect of every £10 of principal amount of loan drawn down in the preceding quarter. Once warrants are issued in respect of any part of the loan, interest ceases to accrue on that part of the loan. Each warrant gives The Scottish Ministers the option to subscribe for one share in Holdings. On the exercise of the warrant the principal amount of loan outstanding will be reduced by an amount equal to the subscriptions price paid by way of set-off against the loan value. At the date of signing of these accounts £ 17 m of the loan has been drawn and £1.7m warrants issued.

On 25 June 20 18 a subscription and shareholders’ agreement was entered into by Holdings, The Scottish Ministers and CBC. This agreement requires CBC, under certain conditions, to invest additional monies of up to £8.5m into Holdings. These additional monies are in two tranches with the first being £0.1 for every £ 1 of loan drawn from the 25 June 2018 loan agreement up to a maximum of £3m and a second tranche of £5.5m to be invested to support the enhancement to the capabilities of the business or support the business development initiatives of the business but by no later than 25 June 2019. To date CBC have not provided additional equity funding under these arrangements.”

3. Improved stakeholder confidence

Rather than prejudice the commercial interests of an entity, disclosure of a government shareholding would be commercially beneficial for the entity’s existing / prospective customers, suppliers, employees and local communities in providing longer term confidence in the future of the business.

Yours faithfully,

Mr Paterson

Dear Scottish Ministers,

FoI/19/00022

Message for Cathy Cacace│ Head of Performance and Governance│European Structural Funds

Correction

I would like to amend by message of 23 January 2019 as follows:

Please replace:

“There is no exemption available under FOISA to completely withhold all information.”

With:

“Section 33 (1)(b) of FOISA does not allow all information to be withheld”

Add:

I ask you to classify Ministers’ original response to my FOI request as vexatious for non-compliance with FOISA.

Yours faithfully,

Mr Paterson

Scottish Government

2 Attachments

Dear Mr Paterson

 

Please find attached response to your request for review of FOI 19/00022
dated 23 January 2019.

 

Kind regards

 

Cathy

 

Cathy Cacace│ Head of Performance and Governance│European Structural
Funds│3rd Floor│150 Broomielaw│Glasgow│G2 8LU│0131 244
1239│07816073316│[email address]

 

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Mr Paterson left an annotation ()

No case log information!

What could have happened to the information?!

https://www.whatdotheyknow.com/request/f...

Mr Paterson left an annotation ()

Reason for withholding information:

" It is my view that this information is sufficiently commercially sensitive such that it should not be
released, for the reasons explained to you in our original response. It is not in the public interest
that a company’s competitors gain an advantage on future similar tendering exercises, to the
detriment of that company, nor that the Scottish Government is left unable to ensure that we
are always able to obtain the best value for public money when tendering for contracts."

Dear Scottish Ministers,

Message for Cathy Cacace│ Head of Performance and Governance│European Structural Funds

FOI/19/00022

The content of your response to my request for internal review is incoherent - and I have assumed, deliberately so. The Subscription and Shareholder agreement is a discretionary arrangement between Ministers and the company concerned. It does NOT result from a tendering exercise.

Unless you clarify your comment by return, I will ask the Information Commissioner to classify your response to my request for internal review as vexatious.

Yours faithfully,

Mr Paterson

Scottish Government

Dear Mr Paterson

I note the content of your email. As outlined in our letter issued via email on the 19 February 2019, if you are unhappy with the outcome of the review you should appeal to the Scottish Information Commissioner for a decision, which I note you have done. Any concerns you have regarding this case should be addressed within that appeal.

Yours faithfully

Cathy

Cathy Cacace│ Head of Performance and Governance│European Structural Funds│3rd Floor│150 Broomielaw│Glasgow│G2 8LU│0131 244 1239│07816073316│[email address]

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Dear Scottish Ministers,

Message for Cathy Cacace│ Head of Performance and Governance│European Structural Funds

I was highlighting to you that your response to my request for internal review is incoherent and I was, therefore, requesting that you clarify your response. I note that you appear to have declined this request preferring obfuscation.

Yours faithfully,

Mr Paterson

Mr Paterson left an annotation ()

This is the story of how the government tried to hide the real purpose of the £30 million loan.

By obfuscation after obfuscation.