Where Did The Money Go?

The private company that ran CairnGorm mountain went bust in November leaving behind a broken hill railway and a failed plan to bring an incredible number of pounds of much-needed investment to the snowsports centre near Aviemore. From the beginning some social people said what was promised at CairnGorm Mountain was too good to be true. When Natural Retreats – a ongoing company until then most recognized with running a holiday rentals company – took over, a change was promised because of it. Publicity material said the aspiration was to host the X games, a world-famous extreme sports event, and produce multiple gold medals at the wintertime Olympics by creating a world class training facility.

When the company that ran the mountain went bust last fall months much of the focus understandably was on safeguarding jobs and making sure there is a ski season of some kind this winter. But we wanted to try to know very well what happened, whether it was avoidable and what could be discovered from it. That designed unpicking an elaborate web of public physiques, private companies and unmet objectives. Even training who possessed what wasn’t simple. The infrastructure on the mountain – the railway and lifts – are in public areas hands.

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Highlands and Islands Enterprise possesses them and the land. Until 2014 the hill was run by them via an operating company – CairnGorm Mountain Limited. That year they announced that Natural Retreats were overtaking. These were a leisure company who had began developing holiday rentals in national parks. The operating company – along with assets like vehicles and movable infrastructure on the hill – were sold for just over £230,000. We can see from the initial tender document that financial support was essential to getting the agreement.

Almost immediately bloggers who had been critical of the management of the mountain began digging away. They discovered that the company had in fact been sold to Natural Assets Investments Limited (NAIL) – a company with many of the same directors as Natural Retreats. Natural Retreats experienced the lease to use the hill – however the assets had been used in the wider group.

NAIL was also in debt. HIE has since said financial checks were done on both companies. In the 2014 media release, HIE welcomed Natural Retreats’ decision to get more than £6m in the mountain. This is the main element to the offer – sell the operating company and release private capital to allow the hill to diversify. The hope was that there would be an investment in the skiing business. But more than that the purpose was to build up the summertime business too – this would protect the hill from the ups and downs of weather-affected snow skiing. Our research has established that £6m wasn’t quite what it seemed.

When we sat down with HIE they informed us that £4m of this was to be a loan of open public money from HIE to Natural Retreats. Two years following the handover Natural Retreats still hadn’t taken that up. The business arrived to HIE and said that they wished to change the business model which got won them the initial agreement. HIE approved a fresh business plan but that investment didn’t happen either.

Highland and Islands Enterprise told us that Natural Retreats invested about £1m in your day Lodge on the mountain. Therefore the whole basis for the asset transfer was never realised. Even as we spoke to residents who had investigated Natural Retreats’ time on the mountain it became clear the concern wasn’t simply what hadn’t been invested, it was what had been applied for also. Natural Assets Investment Limited and Natural Retreats share directors.

There are also other leisure companies authorized at Companies House where in fact the same names come up over and over again. Their accounts show a complicated system of inter-company charging. This is not unusual or at all wrong. The framework of an operating company and a property company that charge between each other is common in the leisure industry.

But what folks wished to know was if Natural Retreats wasn’t investing as originally planned, was it also taking money out? That is where the Administrator’s Statement came in handy. It’s a document produced by those charged with realising the possessions of an organization that has gone into administration and settling its bills.