All money paid into an account for a company called Northern Isles Knitwear owned by Lerwick North councillor and Judane adviser Caroline Miller was used to pay Judane’s creditors, according to a letter issued by her lawyers.
Last month The Shetland Times raised questions over why £21,500 in payments from then tenant of Judane’s factory Chris Hodge had been made to the Northern Isles Knitwear account, to Mrs Miller as a sole trader, between January and November 2007.
It followed the news that councillors had agreed to write off two-thirds of the £600,000 in loan repayments owed to Shetland Development Trust by the knitwear firm, which went out of business in 2005, a matter which Shetland Islands Council has not made any official comment on to date.
At the time Mrs Miller refused to make any comment but in a letter to The Shetland Times on Tuesday, Edinburgh-based solicitors Morton Fraser said that Judane’s first ranking creditor the Royal Bank of Scotland insisted that the company’s bank account be changed to a “balance reduction only” account.
The letter stated: “The bank understood and agreed that the only way that payments could be made to other creditors was for the company to use a separate bank account. Northern Isles Knitwear was no longer an active firm. The account which it held was therefore used for the purpose which we have explained.
“All monies paid into the Northern Isles Knitwear account from Mr Hodge were used to pay Judane’s creditors. Not only were these transactions included in group accounts submitted to Companies House, they were made to the satisfaction of Shetland Development Trust who held a second ranking charge on the company’s factory premises.”
The letter continued that accountants for both Judane and Mrs Miller were satisfied with the “transparency and accuracy” of the accounts and “our client has not benefited personally in any way from these transactions”. It also stated that Mrs Miller consulted the SIC’s administration department regarding the required disclosures on her register of interests.
“The accounting status of the relevant payments was disclosed in the accounts which were supplied on a frequent basis to the council and Shetland Development Trust. Nothing in these transactions was hidden from scrutiny by council development officers and councillors.”
On 23rd December Mrs Miller instructed her solicitors to seek an interim interdict at the Court of Session in Edinburgh against the Shetland News website and her fellow SIC councillor Gary Robinson over allegedly defamatory statements about her relationship with Judane, which the Court of Session refused to grant.
But the letter notes: “The Court of Session has made no ruling regarding whether the statements which have been made regarding Mrs Miller are defamatory. Our client therefore reserves her rights in full to take any further action which she considers necessary to protect her reputation.”