Now Scotland hits out over Macquarie Bank

The Scottish government has added to concerns being voiced about Macquarie Bank potentially “asset stripping” Britain’s prized Green Investment Bank if the Australian investment bank is successful in acquiring the bank, possibly as early as next month.

The Scottish government’s Cabinet Secretary for Economy Jobs and Fair Work Keith Brown has written to the UK government, warning that privatising the bank “may result in an asset stripping exercise.”

His concerns mean serving and former MPs from five political parties have sounded alarm at the prospect of the so-called “Millionaires Factory” taking over the Green Bank.

Although Mr Brown’s statement does not mention Macquarie Bank by name, it is the only serious contender to buy up the £2 billion ($3.4 billion) bank.

“The veiled manner in which privatisation is taking place offers no reassurance that the future of the Green Investment Bank is being modelled in line with the reassurances offered to the Scottish Government in 2015, which state that the original purpose of the bank would be maintained.”

‘Financial asset stripper’

The term “asset stripping” means breaking up a company and selling off its most profitable parts, even if that is not in the company’s long-term interests. Critics of the sale fear Macquarie Bank will break up the Green Bank in this way and rob it of its ability to act with an environmental mission.

Macquarie Bank has been hit with the unflattering “asset stripping” tag for more than a decade, when the board of the London Stock Exchange deemed the bank unfit for a takeover.  Britain’s Telegraph cited a source close to the LSE describing Macquarie Bank as “purely a financial asset stripper.”

The SNP’s intervention is significant as it has previously suggested the British government might have to formally seek Scotland’s approval for any privatisation deal. The Green Investment Bank was created in 2012 to finance infrastructure green energy projects would otherwise struggle to find.  In 2015 it began turning a profit. Its headquarters are located in Edinburgh.

Mr Brown’s statement adds to concerns raised in the past few weeks by MPs from a range of political parties, including the former Tory and Liberal Democrat Ministers who helped create the bank, the Labour opposition and the Greens.  Former Tory Minister Gregory Barker called for the sale to be halted immediately and the former Lib-Dem Secretary Vince Cable last week told Fairfax Media that Macquarie Bank was the “worst kind of company” to be acquiring a bank set up to solely finance environmental projects.