Keane hits out at BoS ‘cover-up’; Former treasurer accused in Livingston collapse

By Ian Fraser

Date: August 29th, 2004

Published: Sunday Herald

Dominic Keane: accuses Bank of Scotland of a “cover-up” over Masterton’s collapsed companies

DOMINIC Keane, the former chairman of Livingston Football Club, has accused the Bank of Scotland of a “cover-up” in its handling of the administration of Livingston FC and the way collapsed Stadia group was salvaged earlier this year.

The Stadia group of companies, set up by Bank of Scotland’s retired treasurer and managing director Gavin Masterton, collapsed into receivership in February 2004, with total debts estimated at £25-£28 million.

Keane claims the bank brought in Yorkshire-based Scarborough Development Group to pick up the pieces in a bid to avoid embarrassment and protect its former treasurer.

SDG’s chairman Kevin McCabe set up a new company called SDG Caledonia, which officially took over Masterton’s stake and a share held by venture capitalist company 3i in the collapsed Stadia ventures for what is understood to have been a nominal sum in May.

The deal was structured to enable the Bank of Scotland to recycle debt – including £3.7m owed by Livingston FC – and to draw a line under what could have become a seriously damaging episode.

“Here was the guy who had been in charge of corporate lending at Bank of Scotland for many years racking up losses running into millions of pounds with his own private ventures in the space of four years,” said one source.

Livingston FC was forced into administration on February 4, with Kroll being appointed as administrators.

Keane strongly believes that the bank’s need to push Livingston FC into administration was linked to its desire to pull off a swift rescue of Stadia and permit its former treasurer and general manager to make as dignified as possible an exit from the wreckage.

Keane, who is preparing a complaint to the Financial Services Authority about the conduct of both Masterton and the Bank of Scotland, told the Sunday Herald he “assumed” during his first meetings with Masterton in April 2000 that Stadia “was the bank”. He entered a joint venture with the entity in 2000, although this was initially agreed only verbally. It was not formalised until August 2001.

An office building built by Inverness-based Tulloch Construction was already half built on the site when that agreement was formalised.

Keane said that Masterton seemed incredibly eager to develop land around the Almondvale Stadium when they first met in April 2000. Keane said Masterton wanted to make this a “showcase” for the Stadia concept that could be shown off to other football clubs around the UK and he was attracted by Keane’s strong relationship with the football-friendly West Lothian Council.

Masterton’s idea, first mooted while he was still a senior executive at Bank of Scotland, was to enter into joint ventures with struggling football clubs throughout the UK.

His business would provide finance and development skills in exchange for the clubs injecting their property assets into each joint venture. The proceeds from such developments – which were to include hotels, offices and leisure complexes – were to be shared between the clubs and the Stadia group of companies.

Keane said of the April-October unofficial agreements between himself and Masterton: “I never had any doubt that when I was dealing with Gavin I was dealing with the bank. There was absolutely no talk about him leaving the bank. The impression I got from Masterton was [Stadia] was a bank company. I did not know until January or March 2001 that Masterton would be retiring.”

Masterton finally left Bank of Scotland in June 2001.

But Jack Irvine, chairman of Media House International, and a spokesman for SDG, said: “Only a very naive individual would have thought Stadia was a 100% Bank of Scotland venture. Gavin made no secret that he was working on Stadia and Dunfermline Football Club as he was winding down at the bank prior to official retirement. Indeed he announced this at his retirement dinner in front of 400 guests. Keane must be the only man in Scotland who didn’t know this.”

A Bank of Scotland spokesman said: “There was no possibility of any confusion between Gavin Masterton, the private individual, and the Bank of Scotland. As a matter of fact, the transaction in question was completed in August 2001, after Gavin Masterton retired from Bank of Scotland.”

To read a more in depth feature on this saga, also published in the Sunday Herald, see Keane’s Last Stand.

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Posted by Ian Fraser on Aug 29 2004. Filed under Article Library, Investigations. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry