RISKY GALORE
POLITICIANS CALL FOR REVIEW AS BUSINESSMAN RECEIVES GOVERNMENT CASH BOOST FOR WHISKY FIRM Tycoon who lost £15million of public cash in a flop energy firm is given another £1million grant to open up a distillery
A businessman has been given a £1million grant to open a whisky distillery after taxpayers lost £15million on his last venture.
Martin McAdam, 57, was CEO of wave energy firm Aquamarine Power until a year before they went bust, having swallowed up huge payments from business quango Scottish Enterprise (SE). Despite the company being a spectacular flop, he pocketed about £1million in wages between 2009 and 2014.
Now the Sunday Mail can reveal the entrepreneur – who describes himself as a “risk taker” – has got another government boost in the form of a £982,000 grant to open a distillery in Inverclyde.
Opposition politicians have reacted angrily to the handout and called for the decision to be reviewed.
Edinburgh-based Aquamarine Power drafted in administrators in October 2015 after failing to develop commercially viable wave energy with two huge converters in the sea off Orkney.
The company left debts of more than £11million, with the biggest creditor being SE, who were owed £ 6.2million.
Over the firm’s lifetime, they were estimated to have received about £15.2million of taxpayers’ cash.
Accounts filed with Companies House show that, despite the company’s woes, McAdam consistently drew a large six-figure salary. Analysis of the documents suggest he earned about £1.2million over six years, drawing almost £ 300,000 in 2011 alone.
McAdam claimed the total figure he was paid was closer to £1million and £241,373 in 2011.
He did not respond when asked if pension contributions were included in his calculations. The Irishman, who is registered as living in a £560,000 flat in Edinburgh’s New Town, also claimed to have lost a personal investment of £250,000 in Aquamarine Power.
After resigning as a director in October 2014, McAdam went on to set up the Ardgowan Distillery Company, registering as a director in July 2016.
A new manufacturing plant and visitors’ centre is planned for a former sawmi ll near Inverkip in Inverclyde and the Scottish Government have agreed to pump public money into the building plans.
A £ 982,000 payment was agreed in November through the Food Processing, Marketing and Co-operation (FPMC) grant scheme, which is itself funded by European Union and Scottish Government money. SE also contr ibuted £ 8490 to the “strategic development” of the distillery plans.
McAdam vigorously defended his record at Aquamarine Power and the use of public money for his schemes.
He said: “I think government grants are an impor tant economic stimulus.
“In a world where we thought energy prices would continue to rise, development of new technologies such as wave power would have brought great benefits to Scotland and Scottish manufacturing.
“What sustained the company was not just government grants but the venture capital and private equity and individual investors such as myself. We need to encourage people to create businesses and sometimes government grants are part and parcel of achieving that.
“I’ve been responsible for the start-up or management of five companies in my career.
“I’m delighted to say that three of these were successful, one was break- even and one wasn’t successful.
“I’m now working on creating a new distillery and we’re working hard to raise the finance for that project.”
McAdam’s new business is located on the Ardgowan Estate. The strategy is to release a seven-year-old lowland single malt whisky that will have “a distinctive taste and f lavour given its proximity to the sea and the Gulf Stream”.
The firm also want to sell blended whisky to “raise the brand profi le and support short-term cash flow”.
The company plan to raise £ 17mi l l ion to cover their £11million distillery, as well as wages, cask purchases, stock production for maturation and the creation of “intellectual property”.
McAdam claims he and other founders have invested more than £400,000 and that, during construction, 35 jobs will be created.
Once operational, it is estimated the distillery would support six jobs and up to 15 in
There should be a review of this grant to make sure it is the most appropriate use of funds
the visitor centre. Willie Phillips, who headed whisky brand Macal lan, was appointed chairman of the Ardgowan Distillery earlier this year.
Former Bruichladdich and Springbank director Gordon Wright is also joining as an adviser on commercial development and sales.
But politicians have questioned the huge sums of taxpayers’ cash being ploughed in amid concerns over McAdam’s former role at Aquamarine Power.
Scottish Labour’s economy spokesperson Jackie Baillie said: “This is a deeply troubling revelation that raises serious questions yet again about the Government’s judgment.
“It’s clear businesses across the country need support but taxpayers’ money simply cannot be given away without proper checks and balances.
“There should be a review of this grant to ensure it is the most appropriate use of funds.”
Scottish Liberal Democrat MSP Mike Rumbles said: “A million pounds is a considerable pot of public funding.
“For the Scottish Government to give this out as a float to Mr McAdam’s new venture, they ought to have sought cast-iron guarantees it won’t go the same way as the last one.”
Earlier this month, we told how SE refused to reveal the name of a firm who got £500,000 in public cash in a secret deal.
SE sa id: “Our funding decisions are based on where we can help improve international competitiveness and secure more and better jobs for the people of Scotland.”
The Scottish Government added: “Each application to the Food Processing, Marketing and Co- operation grant scheme is subject to a robust assessment process, including proof of match-funding, deliverability, value for money and consideration by independent food and drink experts.
“This showed that the construction phase of the new facility alone was estimated to generate £1.9million and 35 jobs in Inverclyde. Funds are paid after construction begins, with the final instalment only paid following a site visit to confirm completion of the project.”