An elected member says he is satisfied Shetland will see “significant benefits” from the SIC’s purchase of Shetland Leasing and Property Developments (Slap), despite news the council paid over one and a half million pounds too much for it.
Last week it emerged the council had paid £17.5 million for the property portfolio last year – some £1.55 million more than its worth.
But South Mainland councillor Robbie McGregor insisted on Wednesday there was no telling a lower bid would have been successful.
Speaking at the afternoon’s special full council meeting, he added he was satisfied due diligence was carried out appropriately.
“The valuation is always an opinion. Mr Kenny remarked that the robust business case would bring significant benefits to this council,” he said.
“We don’t know if a lower bid would have been successful.”
Mr McGregor touched on the audit committee meeting which took place earlier in the day, when assets manager Robert Sinclair told members a valuation had been carried out two years beforehand.
“I feel due diligence was attended to, and I feel – very, very strongly – this acquisition will benefit the finances of Shetland Islands Council and the people of Shetland for many years to come.”
His comments came after representatives from external auditor Deloitte issued an unmodified opinion of the council’s accounts, something which was welcomed by the council’s political leader Steven Coutts.
But Deloitte director Pat Kenny told members that the purchase of Slap was the “main development” examined since June.
“I am keen to emphasise that we believe there was a very strong and robust business case for that transaction that will give the council significant benefits in the medium to long term,” he said.
“We do think there are some lessons to be learned from the due diligence that was taking place during the Slap transaction.”