Police called in over oil firm fraud claims

POLICE have launched a criminal investigation into allegations that engineering business Cosalt was the victim of fraud.

The Crown Office has ordered Grampian Police to conduct a full investigation after the company handed over files prepared for a civil case against millionaire brothers Calum and Stuart Melville and supply firm Meapac.

The documents were compiled before the Melvilles and Meapac agreed to hand back £2million to Cosalt, which they used to run, in an out-of-court settlement after being sued over equipment Cosalt Offshore claimed had not been delivered.

Following the civil settlement, the Melville brothers said they were not admitting liability for an alleged multimillion-pound fraud.

The head of the Crown Office’s serious and organised crime division, Lindsey Miller, has now sent a letter to Cosalt chief executive Trevor Sands confirming Grampian Police will be investigating matters.

The force will now put together an interim report for the Crown Office setting out any likely suspects and offences.

The news emerged as Cosalt Offshore’s parent firm –  Cosalt plc – confirmed yesterday that it was sliding towards administration.

Mr Sands said Cosalt Offshore – which supplies equipment to the oil and gas sector – would “co-operate fully” with the police investigation.

“Our priority in pursuing the civil case was that the integrity of the business was restored, as that was very important for our staff, customers and suppliers in Aberdeen,” he said.

Following the civil settlement, the Melvilles and Meapac were ordered to pay Cosalt £1million immediately, with the second £1million paid over an 18-month period.

The brothers were told they would have to give up their new firm, Global Integrated Services, a direct rival to Cosalt, if they failed to make the payments.

The civil battle centred on claims made by Cosalt Offshore – which traded as GTC Group until the brothers sold the firm in 2007 – that equipment worth millions had not been received by its Aberdeen arm.

The firm alleged there may have been a fraud involving payments to Meapac for goods that were never delivered, the proceeds of which would end up in accounts controlled by the Melvilles.

Following the settlement in October last year, the brothers said there were “very strong business reasons” for avoiding court action but said they would have welcomed the opportunity to resolve the matter in the Court of Session.

A Crown Office spokes-man said: “We can confirm that, following a complaint regarding fraudulent conduct made to the Crown Office by Cosalt, a police investigation has been instructed and this is being overseen by the economic crime unit of the serious and organised crime division.

“As this is a live inquiry, it would not be appropriate to comment further.”

A Grampian Police spokesman confirmed the investigation was under way but was at an early stage.

When the Press and Journal contacted Calum Melville for a comment, his solicitors responded on his behalf and insisted the police investigation did not centre on him.

Mr Melville – Grampian’s Industrialist of the Year in 2010 – was also on the board of Dundee Football Club before the team’s slide into administration in the same year.