Tax bill cut for debtor cited by Scott

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The Independent Online

Westminster Correspondent

A businessman named in the Scott report for exporting explosive equipment to Iraq and who ran up pounds 1m debts because Saddam Hussein refused to pay him when the Gulf war began, has had a pounds 500,000 tax bill set aside by the Inland Revenue and is applying for government grants to fund his latest pounds 4m venture.

Mel Blackburn, who ran Global Technical & Management Services, is urging creditors not to make him personally bankrupt. If they do, he says, he will be unable to remain the driving force behind Tristan, a project to build yachts to take poor children on sailing trips.

It is a charity but there is a bonus for Mr Blackburn if it takes off: it has contracted to buy the yachts from his boat-building company and the order should generate enough cash for him to pay off some of his debts.

The IR has agreed to waive pounds 574,000 of his admitted total tax liability of pounds 659,000 and has allowed him to repay pounds 85,000 over two years. On Wednesday he will plead with the other creditors, who are owed pounds 265,000, at a meeting in Warrington, Cheshire. A copy of his letter to them has been sent to the Independent.

He admits Global Technical Management Services ceased trading as a result of the Gulf war. It was owed pounds 5m for "engineering services", described by Scott as a contract to clear waterways of mines and train Iraqis to remove mines. Part of the contract included the supply of explosive detonator transponders, which required an export licence. No application was made and, said Scott, it should have been.

In his statement to creditors, Mr Blackburn says there is little chance of being paid by Iraq. "Following the Gulf war my financial affairs were investigated by the Inland Revenue ... particularly since I had failed to disclose income from abroad which had been paid into offshore bank accounts ... " Since 1991, he says, he has been co-operating with the IR. He also owes pounds 170,671 to Forward Trust Limited, the finance company petitioning for his bankruptcy. In all, nine businesses and individuals are listed as creditors.

Tristan Sailing, his private company, is to sell Tristan Trust, the charity, six yachts worth pounds 4m, leaving Tristan Sailing with enough cash, he says, for him to pay all his creditors 12.5p in the pound. But for that to happen, Mr Blackburn says, it is vital he is not made bankrupt and is allowed to remain in charge.