Due diligence done for hotel deal, says council
Scottish Borders Council has insisted that it followed due process when making Ramoyle Developments preferred bidder for the project to build a new hotel in Galashiels.
Inspection of Ramoyle’s accounts at the time would suggest that it did not have anything like the capital required to build a 50-bedroom hotel and retail unit at the former Burgh Yard.
Its 2012 balance sheet, as approved by its board on January 1, 2014, showed it had just £6,523 cash in the bank and in hand, and total net liabilities of £664, 210.
And in September 2014, the company released its 2013 balance sheet, showing even less cash available – £697 – and increased net liabilities of £873,326.
The council pulled out of the deal last week after missives were rescinded on the site.
The building of a hotel in the town centre is considered to be central to the town’s regeneration, so to have spent over three years waiting for Ramoyle to start work seems lackadaisical at best, say critics of the deal.
However, the council insists a thorough financial check was carried out.
A spokesman said: “Due diligence was carried out as part of the full assessment of the bids which included the council’s finance department carrying out financial checks on the company when it was chosen as preferred bidder in August 2014.”
The site is to be put back on the market in January.