A committee came together today at the Scottish Parliament to take evidence from Scottish Enterprise, the public body which provides grants for businesses,  over the closure of the Kaiam Plant in Livingston.

Kaiam, which manufactured parts used for high speed data transfer in data centres, had been awarded £850,000 by Scottish Enterprise in 2014 to relocate some of its production from China to Scotland. In addition, it received direct support of £9,500 for an efficiency project through the Scottish Manufacturing Advisory Service (SMAS).

The committee included Neil Francis, director of Trade and Investment Operations Scotland; Elaine Morrison, head of partnerships; Jane Pollock, team leader of Global Accounts; and Michael Cannon, head of Innovation and Enterprise Services.

More than 300 workers were laid off from the plant on Christmas Eve, with many going unpaid. Most shockingly, in the run up to the redundancies, Kaiam bosses told workers to continue working despite knowing they would not be paid.

KPMG administrators, who were appointed two days earlier, informed the staff of the situation and told them they would have to make claims through the insolvency service.

Outraged by the move, the public raised £22,648 through a Crowdfunding campaign last month in a bid to support the Kaiam workers who were made redundant.

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When asked what went wrong, Pollock said that the downward pressures in the market and issues around cash flow caused the downfall of the company.

Lockhart queried at which point the plant entered into Scottish Enterprise’s watch list after it suffered a pre-tax loss of £20m in 2016. Despite serious cash flow problems, no reports were made to the Scottish Government about the financial troubles the company faced.

Labour MSP Jackie Baillie said: “Is it correct for me to say that prior to November 16, there were no reports to the Scottish Government about any problems at Kaiam because you were effectively blindsided by what they told you?” Pollock, responded: “The behaviour was that they were confident that they would be able to secure what they needed in order to sell the business. That was always the message.”

Scottish Enterprise had held “four or five” conference calls, as well as a face-to-face meeting on 19th November with either the chief executive or the chief financial officer of Kaiam. At a meeting on 19th December, Scottish Enterprise invited PACE (the Scottish Government’s redundancy support service) to join a meeting with Kaiam to “remind them of their responsibilities”.

Scottish Enterprise confirmed that on 22nd December Kaiam had made them aware that it would not be able to pay its workers but had assured them “they would just manage through,” – they added that they planned to meet their obligations.

Pollock said that  Scottish Enterprise had encouraged the company to tell the staff and contractors that they would not receive payment. Baillie responded: “I would have expected you not to ask but demand that they share that information with workers.”

Cannon said that Scottish Enterprise had written to the administrator to get the grant back, but added it could not put a figure on that yet. He noted that the Government body was prepared to call in the parental company guarantee if the full amount is not received.