Bank Does Not Own Bridge Says Dewar
Despite currently holding 997 out of 1000 shares in the Skye Bridge Company, the Bank of America does not own the Skye Bridge, said the Scottish Secretary of State Donald Dewar.
On 23rd January 1992 the three original shareholders in the Skye Bridge Company - Miller Civil Engineering, Bank of America International Finance Corp. and Dywidag - entered into a share pledge agreement with Bank of America International which bridge campaigners SKAT have interpreted as transferring ownership solely to Bank of America.
However, according to legal experts, although this deal has effectively given up control of the bridge shares to BoA it has not given up ownership.
Under the terms of the deal, the bank is obliged to use the shares it now holds to further the commercial interests of the Skye Bridge Company. The original shareholders are still (or SHOULD still) be the net beneficiaries. If this is true, then upon liquidation, or an arranged termination date, the original names will receive the benefit of the shares.
This, apparently, is standard business practise, but the Scottish Office and Skye Bridge Ltd.'s repeated refusal to let the public know what was behind the apparent transfer of control clouded the issue. The Secretary's late reply was prompted by a parliamentary question from local MP Charles Kennedy.
Neither the bridge company or the Scottish Office bothered to to tell the public enquiry or the National Audit Office about the share deal because as they see it despite a change in share control, the ownership of Skye Bridge Ltd. remains the same. One of the safeguards put into place in the bridge concession agreement was the stipulation that the Secretary of State for Scotland had to be informed of any changes in Skye Bridge Co. shareholders. The question is did the Scottish Office not inform the NAO because they didn't think it relevant, or because they themselves had not been informed.
In 1996, the National Audit Office started a year long investigation into the Skye Bridge project as a Private Finance Initiative and in May 1997 published a report which criticised the way the Scottish office arranged the contract with the bridge company for not getting "best value for money".
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Copyright © Ray Shields, 1998.
Most recent revision, 13 March 1998