A businessman vying to build the UK’s first spaceport transferred a £610,000 public loan to another of his firms before it was liquidated.
Former RAF officer Frank Strang’s Shetland FM, which managed accommodation for offshore workers in Shetland, collapsed last month with a huge sum outstanding to Highlands and Islands Enterprise (HIE).
The Scottish Government finance quango gave his Sella Ness-based firm the loan in 2017.
Last week, it said it could take legal action to recover the owed money.
But father-of-two Strang, who is also the boss of Shetland Space Centre (SSC), has insisted he will pay back the loan. Latest accounts for Shetland FM – a facilities management firm based at Sella Ness on the main island in the Shetlands – show it transferred the six-figure loan to another of Strang’s companies, Saxa Vord Limited, in July 2017.
Both companies list him and wife Deborah, 54, as being the only officers for the firms.
The following December, Saxa Vord Limited changed its ownership structure so that it was largely owned by Temily Holdings Limited, which in turn is owned by his children Emily and Thomas.
Despite the complicated structure surrounding the loan, Strang says there is nothing “sinister” about the outstanding loan.
The 62-year-old said he was committed to paying it back.
He added: “There’s nothing sinister about it. There is no scurrilous deal or anything like that.
“There is an inference that my wife Deborah and I took the loan for personal gain and it can’t be further from the truth.
“The money went straight to the bank in debt we owed to them for Saxo Vord and Shetland FM.
“Like many businesses, we went to HIE for help and we borrowed money to drive the business forward. There are rules that has meant the money had to go to Shetland FM.
“It was used to service outstanding debts owed by the group. I haven’t paid back any of it yet but intend to.
“I am personally responsible for it and will pay it back.”
Saxo Vord is a former RAF site Strang has turned into an award-winning tourist resort on Unst. Strang’s other business interests include the SSC, which also has former Scottish Liberal Democrat leader Tavish Scott as a director.
Their plans for Shetland to become the first base for satellite launches in the UK has failed to soar in recent months. In March, Strang accused HIE of failing to back his plans.
A spokesman for HIE said: “We provided Shetland FM with a loan in 2017. This was on commercial terms and with security.
“The loan was to strengthen the company’s financial position so it could attract further lending and continue its growth.
“It was used to help purchase land and buildings at Saxo Vord, over which HIE had first standard security for the loan.
“As a responsible public body and in the public interest, we will act on legal advice in terms of the steps we should take to recover the outstanding debt.”
