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'Northern Climes, September 2007'

FISH FARMING SHETLAND-STYLE

Four years after SSG Seafoods, a cooperative of Shetland fish farmers, went belly-up to the tune of £13.5 million - including more than £7 million of community oil money funds - serious questions continue to be asked about the involvement in the affair of Shetland Island Council’s (SIC) chief executive officer, Morgan Goodlad.

Concern centres on the fact that Morgan Goodlad’s brother, Alistair, was chairman of SSG Seafoods when financial support for the company was being discussed by the council, and that Mr Goodlad should have recognised the danger of a potential conflict of interests. A complaint about the matter was subsequently lodged with the Scottish Public Services Ombudsman by Michael Peterson, a former SIC employee.

Morgan Goodlad insists that he had nothing to do with pumping council money into his brother’s firm: “Categorically I can tell you that I was not involved in any form of decision-making process with SDT [Shetland Development Trust] in relationship to SSG, nor could I,” he told the local newspaper, the Shetland Times.

Mr Goodlad must have suffered a memory lapse. A copy of an email dated 21 March 2002 from his office to the Shetland Development Trust commented on means of financing a £1 million loan to SSG Seafoods so that they could acquire Dury Salmon Ltd, a financially-challenged fish farm business in which SIC had invested and that SSG Seafoods wanted to buy.

The council had already invested heavily in SSG Seafoods, providing working capital of £1.5 million when the company was set up in 2002, and, thereafter, a further £5.5 million in shares, loans and guarantees. But in spite of all the warning signs, the loan was approved. The bank withdrew its support and SSG Seafoods collapsed.

In June, the Scottish Services Public Ombudsman concluded that Morgan Goodlad had been guilty of maladministration, although the ombudsman found nothing which suggested that “the Senior Official acted with anything other that proper motives,” he added, however, that it would have been prudent for him to put on record the fact that his brother Alistair was chairman of the company [SSG Seafoods]. His failure to do so constituted maladministration.

During the investigation, Mr Goodlad had told the ombudsman, “I was not aware, nor was I made aware by any other parties involved in the initial discussions of any fact or suggestion of my brother’s involvement in this company.” The ombudsman did not believe that this could have been the case: “In the circumstances, I cannot conclude that the Senior Official was unaware of his brother’s connection,” he wrote.

But that is not the end of the story. It has now emerged that Shetland Island Council is under investigation by Northern Constabulary about their investments in the SSG Seafoods salmon consortium. A number of people are alleged to have made statements to the police and a Crown Office spokeswoman confirmed: “We have received a report and there is an ongoing investigation into it at the moment.” The sad saga of SSG Seafoods continues.

Rod McGill