Aluminium smelting operations continue as usual at GFG Alliance’s Lochaber smelter despite an investigation into its parent company for serious financial crimes.
On Friday the Scottish government’s Serious Fraud Office said it had begun an investigation into the firm for “suspected fraud, fraudulent trading and money laundering” related to the financing of GFG’s various companies.
The SFO’s investigation will look into GFG’s relationship with Greensill Capital, the financially-troubled lender. GFG said in a statement that it is cooperating fully with the investigation and continues to work toward refinancing.
Lochaber Chamber of Commerce CEO Frazer Coupland told a local newspaper that he has an eye on the situation.
“Lochaber’s smelter and hydro power station are a critical part of our Lochaber community, providing skilled jobs while also being central to the wider industrial supply chain in the Highlands,” he noted.
“I am in regular communication with the management team at Alvance, and whilst the recent announcements are unsettling, the situation locally is that it does not affect operations: the team remain focussed on serving their customers and operating safely.”
GFG bought the Lochaber aluminium smelter from Rio Tinto five years ago, running the plant under the auspices of its Alvance division. Then on shaky financial ground, GFG purchased it for £330 million and with a promise from the Scottish government to purchase power from the plant for the next 25 years.
Meanwhile, evidence indicates that GFG was heavily reliant upon Greensill for financing until its recent collapse. The foundering financier lent around £3.6 billion to GFG.
Prior to Greensill’s collapse GFG said an expansion of operations at the plant was under development. The £94-million expansion was expected to add another 7 jobs to the plant’s current workforce of around 200.