Nicola Sturgeon has said she did not know about allegations of corruption against the parent company of a Chinese firm involved in a possible £10bn investment deal with the Scottish government.
The first minister signed a formal “memorandum of understanding” (MOU) to explore investment in transport infrastructure, clean energy and housing projects with two Chinese companies, the SinoFortone group and the China Railway No 3 Engineering Group, last month.
Concerns were initially raised when details of the deal – which was concluded on 21 March – were reported first in the Chinese media, with no official announcement made by the Scottish government.
It has since emerged that the parent company of one of the organisations involved, the China Railway Group Limited, has been blacklisted by Norway’s oil investment fund, which pulled its £26m stake after its ethics council concluded there was “a risk that the company is involved in gross corruption”.
Questions have also been raised over the level of scrutiny carried out prior to the MOU being signed.
On Tuesday, the Scottish government said it was not necessary to carry out a full due diligence process into the companies because the MOU did not commit Scotland to a formal contract with the potential investors.
Speaking on the election campaign trail in Edinburgh, Sturgeon said: “What happened is we signed a memorandum of understanding to explore options for investment.
“If we get to the stage where there are any proposals for investment, then full due diligence will be done at that stage. That’s how these things normally happen.”
Pressed on whether she knew of the allegations against CRG at the time the MOU was signed, she said: “We don’t do full due diligence until we get to the stage of actual proposals.”
Asked again, she said: “I’m telling you we don’t do full due diligence so, you know, I am not aware of that. But if we get to the stage where there are any actual proposals on the table, then we do full due diligence at that stage.”
The Scottish Liberal Democrat leader, Willie Rennie, who had been pressing Sturgeon to clarify whether she had prior knowledge of the allegations, described this as “a ridiculous way to do business”.
He said: “The Norwegian oil fund showed how it should have been done. Even the simplest checks would have revealed cause for concern but the FM did not ask basic questions before putting pen to paper.” found here
Wed 06 April 2016
NICOLA Sturgeon is facing calls to publish official Scottish Government’s procedures surrounding the signing memoranda of understanding with other nations over a controversial £10 billion deal struck with China.
Liberal Democrat leader Willie Rennie said it was a “ridiculous way to do business” after it emerged one of the firms signed up to the potential investment arrangement was previously at the centre of a bribery scandal.
The First Minister said on Wednesday she was “not aware” there had been corruption allegations against the owner of one of the Chinese companies, but insisted ministers “don’t do due diligence” until formal proposals are put on the table.
READ MORE: Nicola Sturgeon refuses to answer on China bribes allegations
But Mr Rennie said: “Nicola Sturgeon signed a so-called agreement of understanding with people that she doesn’t know anything about. This is a ridiculous way to do business. The First Minister needs to explain the protocol for signing such memorandums and whether she complied with that protocol when she signed this one.
“The Norwegian oil fund showed how it should have been done. Even the simplest checks would have revealed cause for concern but the FM did not ask basic questions before putting pen to paper.”
It emerged last week that the First Minister signed a “memorandum of understanding” (MOU) with SinoFortone and China Railway No 3 Engineering Group (CR3) which could be worth up to £10 billion. Found Here
Scotland and China agree £10 billion investment dealNicola Sturgeon, flanked by Peter Zhang (left) & Sir Richard Heygate.
A CHINESE consortium has agreed an infrastructure deal with Scotland worth £10 billion, it has been revealed.
The consortium, made up of the SinoFortone Group and China Railway No 3 Engineering Group – the largest construction firm in the world – both signed a ‘memorandum of understanding’ at Bute House earlier this week.
The projects are also likely to create a number of jobs and are set to boost the construction materials business.
Industry experts believe that the deal will focus on Scotland’s rail network.
Luo Renjian, a researcher at the Beijing-headquartered National Development and Reform Commission (NDRC) said that the agreement could also ‘pave the way for significant investment in clean energy, transport and affordable housing’.
Luo added: “With high-speed trains traveling at a speed of over 300 kilometres per hour, it certainly will help Scotland change the situation in which its ground commuting systems long been dominated by automobiles.
“And related projects can generate a large number of jobs and construction materials supplying businesses.”
First Minister Nicola Sturgeon signed the agreement at Bute House on Monday, along with SinoFortone managing director Peter Zhang, China Railway No 3 Engineering Group senior advisor Sir Richard Heygate, and China Consul General Pan Xinchun.
Ms Sturgeon said: “We have been cooperating and engaging with China since 2007 and I further progressed Scotland’s business credentials during my trip last year.
“This Memorandum of Understanding will strengthen our economic links with China in a number of areas.
“We have high hopes for Scotland’s economy and it is in a strong position, but if we can drive further growth by looking beyond our shores and building relationships with firms across the world then we will seek to make that happen.”
Mr Zhang added: “We are delighted to act as a bridge between Chinese infrastructure expertise and finance with Scotland, to provide a real example of the benefits of the Belt and Road Initiative in action.”
Consul General Pan added that the project would benefit Chinese enterprises and the Scottish people. The Scotsman
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