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Ineos 'hiding true value' of Grangemouth refinery

Company insists assets worthless but expert questions figures

Financial experts have predicted the Scottish government will have a tough time finding a buyer for Grangemouth oil refinery because owner Ineos is obscuring its true value.

Scottish Finance Secretary John Swinney confirmed yesterday his office had approached several multinationals to buy the suspended refinery and ruled out nationalisation.

But forensic accountant Richard Murphy, who investigated Ineos's accounts for oil workers' union Unite, said even Ineos's own accountants did not appear to be sure what the site was worth.

"It's exceptionally difficult to say for certain what is going on at Grangemouth because Ineos have made it very hard to find out," said Mr Murphy.

"It's registered in Switzerland so we can't see the accounts of the parent company. We can't get a look at its UK operations as there's no one company we can say is running the plant there."

All production has been stopped at the refinery amid demands from Ineos management for drastic cuts to workers' pay, pensions and terms of employment.

The site is responsible for processing around 80 per cent of Scotland's petrol supply, but Ineos has insisted it will need either the cuts or a state bailout to remain profitable.

The company made headlines on October 5 when it wrote off the value of Grangemouth Chemicals' assets - previously valued at £389 million - as nil, saying it had little confidence in the plant's profitability.

But Mr Murphy's own search of the company accounts showed that in the last year sales increased by 50 per cent, gross profit by 20 per cent and operating profit by 56 per cent.

Meanwhile auditor PriceWaterhouseCoopers signed off a report detailing £117m in deferred tax assets from the site which Mr Murphy says Ineos can only do if it "expects to be profitable, because that's the only way it can get value out of the losses the deferred tax asset represents."

He added: "We've got to assume Ineos telling the truth, which means it's going to get value out of this - which means it's going to make a profit.

"The problem is I don't see how it can claim it expects to be loss-making and profitable at the same time: only one of those can be true."

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