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Business / Space centre team satisfied funder is legitimate

The space centre at Lamba Nessin Unst is expected to create hundreds of jobs in Shetland and further afield.Image: Shetland Space Centre

THE TEAM behind the proposed Shetland Space Centre (SSC) says it is “entirely satisfied” that a firm said to be investing £2 million in the project is legitimate.

Questions have been raised over the equity firm Leonne International by national newspaper the Sunday Mail in the last two weeks.

The Financial Conduct Authority (FCA) announced in March that it believed the firm had been “providing financial services or products in the UK without our authorisation”.

“This firm is not authorised by us and is targeting people in the UK,” it said.

“Based upon information we hold, we believe it is carrying on regulated activities which require authorisation.”

It is understood Leonne International, which is listed in Companies House as Leonreed Limited, does not feel its activities fall within the category of those which require FCA authorisation and has sought clarity on the matter.

But according to SSC chief executive Frank Strang “due diligence” on Leonne International was carried out by the space centre’s major partners with “no issues” being raised.

The SSC team had been introduced to Leonne International by a regulated broker in the city of London at which point the firm cleared further checks, he said.

A spokesperson for Shetland Space Centre said that the investment is £2 million in cash coming in as instalments over the space of 10 months.

Strang said today (Thursday): “To be clear Leonne have met all their obligations and there is a flow of funds into SSC as per the agreement…we entered into a legally binding agreement whereby they have taken a minority investment, they are not involved in the day to day running of the company and they are not directors.”

A website for Leonne’s director Michael Haston describes him as a Monaco-based “wonder kid” who had sold a Cayman-based fund for a reported $650 million.

Shetland Space Centre (SSC) announced in February that it had received a “£2m investment boost” from Leonne International to support the project in its quest to create a satellite launching facilities in Unst.

The company said Leonne would be given a 20 per cent stake in SSC in return.

In a statement issued at the end of last week, the board of SSC said it “wishes to make clear that the company has received and continues to receive funds from Leonne in full compliance with the legal agreement signed more than a month ago”.

“Moreover, Shetland Space Centre has carried out due diligence checks and the board is entirely satisfied that Leonne is a legitimate funder,” it added.

The company said the investment would enable it to “proceed with the first stages of gaining the necessary permissions and licences required to operate the facility and get on with building our launch site and ground station”.

Strang added on Thursday that a share swap between Leonreed Limited, and SSC, was “purely a negotiation whereby we were hoping to get more value back into SSC by way of dividend from Leonne whenever it starts to release them”.

“Any shareholder in Leonne should not be concerned about the validity of their investment as we have transferred the shares as per the agreement and with the continued progress we are making on a weekly basis their shares will only increase in value I hope,” he added.