2006/226/EC: Commission Decision of  7 December 2005  Investments of Shetland Leasing and Property Developments Ltd in the Shetland Islands (United Kingdom)  (notified under document number C(2005) 4649)   (Text with EEA relevance)
Date: 2005-12-07
Institutions: European Commission
Subjects: State aid, United Kingdom, control of State aid, fishing industry, investment aid

L 81/36

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Official Journal of the European Union

18.3.2006

COMMISSION DECISION

of 7 December 2005

Investments of Shetland Leasing and Property Developments Ltd in the Shetland Islands
(United Kingdom)

(notified under document number C(2005) 4649)

(Only the English text is authentic)

(Text with EEA relevance)

(2006/226/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

the European Union on 10 June 2005 (2). The Commission
invited any interested parties to submit their observations
on the case. No comments were received.

Having regard to the Treaty
establishing the European
Community and in particular the first paragraph of Article 88
(2) thereof,

Having regard to Council Regulation (EC) No 659/1999 of
22 March 1999 laying down detailed rules for the application
of Article 93 of the EC Treaty (1), and in particular Article 14
thereof,

Having invited interested third parties to present their obser-
vations, in accordance with the first subparagraph of Article 88
(2),

Whereas:

I PROCEDURE

(1)

(2)

of

the United Kingdom of

the United Kingdom which

In January 2004 the Commission was informed by a
investments made
citizen of
the Shetland
with the involvement of authorities of
Islands
possibly
constituted State aid. By letters of 17 February 2004
and of 1 September 2004 the Commission requested
the United Kingdom to provide information about
these
to which the United Kingdom
replied by letters of 30 April 2004 and 13 December
2004.

investments,

The Commission informed the United Kingdom by letter
of 20 April 2005 of the decision to initiate the formal
investigation procedure under Article 88 (2) of the EC
Treaty. The United Kingdom gave its comments on the
case by letter of 19 May 2005.

(3)

The Commission decision to initiate the formal investi-
gation procedure was published in the Official Journal of

(4)

(5)

(6)

(7)

(8)

II DESCRIPTION

The Shetland Islands Council (SIC), a public authority in
Shetland, set up two trusts, the Shetland Development
(Development Trust) and the Shetland Islands
Trust
Council Charitable Trust (Charitable Trust).

for

The Development Trust was established to serve as the
main means
economic development
projects in Shetland; it makes funding available through
loans. The trustees are the councillors of SIC plus two
independent trustees.

financing

The Charitable Trust is the trust fund of the SIC that
grants loans for charitable purposes. The trustees of the
Charitable Trust are the councillors of SIC, plus two
independent trustees.

The funding of both the Charitable Trust and the Devel-
opment Trust is derived from a reserve fund set up by
is funded from an
the SIC. This reserve fund itself
agreement concluded on 12 July 1974 between the SIC
and oil companies using the harbour facilities of Sullum
Voe. This agreement states that fees are paid by these
companies ‘in respect of the import of crude oil and as
compensation for disturbance caused thereby’.

For commercial and development activities the SIC has
set up Shetland Leasing and Property Ltd (SLAP), which
is a trading company with limited liability, operating for
profit and wholly owned by Charitable Trust. The tasks
of SLAP are to take equity holdings in local businesses, to
make loans to local industry at commercial rates and to
construct
industrial buildings for lease at commercial
rents.

(1) OJ L 83, 27.3.1999, p. 1. Regulation as amended by the 2003 Act

of Accession.

(2) OJ C 141, 10.6.2005, p. 12.

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(9)

(10)

(11)

(12)

As a commercial limited company wholly owned by the
Charitable Trust, SLAP obtains
its
activities from the Charitable Trust and from its own
profits. For
also
provided by the Development Trust.

the funding for

specific projects

funds

some

are

in a
In 1999 the board of SLAP decided to invest
company named Shetland Seafish Ltd This company
was established on 7 October 1999 as a result of a
financial merger between Williamson Ltd and Ronas
Ltd. Both companies were loss-making at the time and
were considered insolvent. By setting up Shetland Seafish
Ltd and merging both loss-making companies it was
expected that profits would grow and that
the new
company would be profit making within a short time.
It was projected that by the end of 2002 Shetland
Seafish Ltd would be generating a profit in excess of
GBP 460 000.

SLAP invested in Shetland Seafish Ltd by acquiring
156 250 shares (62,5 %) of the ordinary shares of GBP
1 each and 1 000 000 preference shares of GBP 1 each
(100 %). The other shareholders of ordinary shares were
the Shetland Seafish Producers Organisation Ltd (43 750
shares), Mr. L.A. Williamson (18 750 shares), Mr. R.A.
Carter
and the Shetland Fisheries
Centre Ltd (12 500 shares).

(18 750 shares)

In June 2000 the board of SLAP decided to invest once
more in Shetland Seafish Ltd when the company decided
to take over the activities of Whalsay Ltd, a loss-making
fish-processing company based in Shetland. The funding
of this takeover by SLAP consisted in SLAP’s acquiring
in Shetland
2 000 000 additional preference
Seafish Ltd, which were subscribed by SLAP in two
tranches; in November 2000 SLAP acquired 1 200 000
Preference Shares and on 16 February another 800 000
Preference Shares.

shares

(13) As from 16 February 2001, the issued shared capital of
Shetland Seafish Ltd thus comprised 250 000 Ordinary
shares and 3 000 000 Preference shares, held in the same
proportions and by the same shareholders as at the initial
issuing of shares in 1999.

(14) According to a

special

resolution adopted in 17
December 1999 by the board of Shetland Seafish Ltd
the preference shares in Shetland Seafish Ltd have ‘the
right to a fixed non-cumulative preferential dividend at the
rate of 10 % (net of associated tax credit) per annum on the
capital for the time being paid up or credit as paid up thereon
accruing from the date of subscription therefore and to be paid

(to the extent that there are profits available for distribution)
annually on 31 January in each year in respect of the 12
months ending on that date; and may be redeemed at par
(i.e. at 1 per preference share) plus any unpaid preferential
dividend, at the option of the Company at any time after the
first anniversary of the date of the allotment of the preference
shares.’

(15)

From the data provided it is clear that Shetland Seafish
Ltd has been loss making since 1999.

(16)

(17)

In its letters of 30 April 2004 and 13 December 2004,
the United Kingdom stated that the investments should
be considered as private investments, as SLAP is a private
body and at the time of the investments both the SIC
and SLAP had legitimate expectations that the monies
involved should be considered as private funds.

Secondly the United Kingdom stated that if the monies
the
considered to be public
involved are
investments made by SLAP are investments which
could have been decided upon by a normal private
operator. To
the United
this
Kingdom had provided two reports issued with regard
the Shetland Seafish
to the investments in question:
Merger Report and the Whalsay Report.

statement

support

funds,

S h e t l a n d S e a f i s h M e r g e r R e p o r t

(18)

The Seafish Merger Report of 27 September 1999 is a
report by Mr. M. Goodlad and Mr. S. Gillani to the
Directors of SLAP on ‘A proposed restructure and
merger of L.A. Williamson & Sons (Shetland) Limited
& Ronas Fisheries Limited’.

(19) According to the figures and the prognoses in the report,
the merger of L.A. Williamson & Sons (Shetland) Limited
& Ronas Fisheries Limited, through the establishment of
Shetland Seafish Ltd would begin to yield profits within
three years.

W h a l s a y R e p o r t

(20)

The Whalsay Report is a report by Mr. John Inkster, who
at that time held the position of Managing Director of
Whalsay Fish Processors Ltd, issued in June 2000. This
report gives an analysis of the situation of the companies
involved, the developments in the market and possible
advantages for Shetland Seafish Ltd to acquire Whalsay
Ltd.

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(21)

Grounds of the formal investigation procedure

private

The Commission considered that it could not be estab-
lished from the figures and data contained in the reports
submitted by the authorities of
the United Kingdom
whether these investments could be considered to be
profitable investments and whether SLAP had acted like
the
a normal
investor. As,
the
investments were
in
companies
direct competition with other fish-processing companies
both within the United Kingdom and in other Member
States, the Commission considered that the investments
appeared to be State aid within the meaning of Article
87 of the EC Treaty.

furthermore,
the benefit of
companies were

for
clearly
involved and those

Kingdom closes by saying that the UK authorities have
consistently acted in such a way that it could reasonably
be concluded that the fund is a private fund under the
rules governing the Community Structural Funds.

IV ASSESSMENT

(25)

It must be determined first whether the measure can be
regarded as State aid and, if this is the case, whether this
aid is compatible with the common market.

A. Existence of State aid

fulfil

(22) As the investments were made in 1999 and 2000, they
were assessed in the light of the 1997 Guidelines for the
examination of State aid to fisheries and aquaculture (1).
According to point 2.3 of those Guidelines, aid that does
not
the conditions laid down therein must be
assessed on a case-by-case basis. According to point
1.2., State aid which is granted without imposing any
obligation on the part of the recipients and which is
intended to improve the situation of undertakings and
increase their business liquidity and which has the effect
of improving the recipient’s income is, as operating aid,
incompatible with the common market. According to the
Guidelines, operating aid can only be declared compatible
if such aid is linked to a
with the common market
common
the
restructuring
plan was not
market. As
that
submitted,
the
investments were
common
market.

compatible with
restructuring

incompatible with the

the Commission

plan
such a

considered

(23)

III COMMENTS FROM THE UNITED KINGDOM

the United Kingdom
In its reply of 19 May 2005,
contends that SLAP should be considered as a private
body. It further states that all evidence concerning the
case had already been forwarded to the Commission, that
the information contained in the Seafish Merger Report is
considered sufficient as a basis for the assumptions made,
the assumptions made in the report should be
that
considered conservative and prudent, and that
the
original business case for the mergers as set out in the
report was justifiable in the context of SLAP’s capacity as
a private investor.

(26) According to Article 87(1) of the EC Treaty,

by

undertakings

‘save as
otherwise provided in this Treaty, any aid granted by a
Member State or through State resources in any form
whatsoever which distorts or threatens to distort compe-
tition
the
certain
favouring
production of certain goods shall,
insofar as it affects
trade between Member States, be incompatible with the
common market’. Four conditions are required for clas-
sifying a measure as a State aid: first, the measure must
provide some advantage to the undertakings which
benefit from it; second, the aid must be granted by the
State or through State resources; third, it must distort or
threaten to distort competition by favouring certain
undertakings; and,
trade between
Member States.

finally, must affect

or

State resources

(27)

the
The funds of SLAP which have been used for
investment are derived from funding by the Charitable
Trust. The Charitable Trust was created by the SIC to
receive and hold, on behalf of the Shetland community,
disturbance receipts which the oil
industry had agreed
to pay.

(28) As was already pointed out by the Commission in its
decision of 3 June 2003 on loans for the purchase of
fishing quotas in the Shetland Islands,
these monies,
which are directly related to the disturbance caused to
the Shetland Islands population and not to the actual
provision of the harbour facilities, cannot be regarded
‘State
as private
resources’
the EC
Treaty.

for the purposes of Article 87 of

funds but must be

regarded as

(24)

The United Kingdom maintains that if the Commission
adopts a negative decision, recovery of the aid should not
be required, as it would be contrary to the principle of
the protection of legitimate expectations. With reference
to Commission Decision 2003/612/EC of 3 June 2003
fishing quotas in the
on loans for the purchase of
the United
Shetland Islands

(United Kingdom) (2),

(29)

(1) OJ C 100, 27.3.1997, p. 12.
(2) OJ L 211, 21.8.2003, p. 63.

The investments of SLAP currently under investigation
are funded from the same type of funding. With regard
to the conclusions of the Commission in its decision
mentioned in paragraph (24) and the fact
the
United Kingdom has not provided any additional
evidence
the
funds
Commission considers that
the investments must be
regarded as funded from State resources.

are private

funds,

these

that

that

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I m p u t a b i l i t y

(30)

In its decision mentioned above, the Commission also
pointed out that the trustees of the Charitable Trust are
the councillors of the SIC. Although these councillors act
as trustees ex officio, the fact that they are nominated by
the SIC means that
the latter is able to exercise a
dominant influence over the trust and SLAP as well as
over the funds at their disposal. There is therefore a set
indicators showing that decisions cannot be taken
of
without
the public
authority.

requirements of

regard to the

arguments

are
assumptions,
for which insufficient
provided. The report contains a projected profit–and-
loss account, a projected balance sheet and a projected
cash flow statement for 2000, 2001 and 2002. The data
in those sheets show that Shetland Seafish Ltd would
become profitable and that the turnover was expected
to increase, relative to 2000, by more than 16 % in
2001 and by 26 % in 2002. However, the report does
not contain sufficient figures and arguments to demon-
since the
strate the reliability of
requisite
and production
needed to support these expectations are not contained
in the report.

figures on supply, prices

these projections,

(31)

Therefore, in the light of the Stardust case (1) and given
the fact that the funds of SLAP are derived from public
funding and that the public authority is able, directly or
indirectly, to exercise a dominant influence over both the
Charitable Trust and its funds, the decisions regarding
those funds must be regarded as decisions imputable to
the public authority and granted through State resources.

credibility of

(36) Apart from the fact that the Commission is not able to
and
establish the
assumptions, even if they could be considered accurate
and reliable, without such figures on supply, prices and
production they would be insufficient for any normal
private investor wishing to invest in such an operation.

these projections

Advantage for the beneficiary and the Market economy investor
principle

(32)

Public investments are regarded as State aid if
the
investments are decided upon in circumstances which
would not be acceptable to a private investor acting
under normal market-economy principles.

(37)

(33) According to the United Kingdom, SLAP acted like a
in
normal market-economy
Shetland Seafish Ltd and the takeover of Whalsay Ltd
by Shetland Seafish Ltd. This allegedly follows from
two reports submitted to the board at the time of the
investments: the Shetland Seafish Merger Report and the
Whalsay Report.

in investing

investor

shortfall within the

It is mentioned in the report that ‘the new management
organisation and production strategy have been carefully devised
to address previous
two companies
concerned. But the core of the new philosophy is the recognition
led approach will ensure success and
that only a market
Shetland’, which
continued
whitefish
according to the United Kingdom demonstrates that the
intent at the time when the investments were made was
to ensure that the companies were operating in a manner
consistent with their market in order to ensure the long
term viability of the companies.

processing

in

investor

(34) An investment can be considered to be in line with the
market economy investor principle if the investment is
made in circumstances that would be acceptable to a
private
normal market
economy conditions. An investment would not be
considered in line with the principle where
the
financial position of the company, and particularly the
structure and volume of its debt, is such that a normal
return cannot be expected within a reasonable time from
the investment.

operating

under

S h e t l a n d S e a f i s h M e r g e r R e p o r t

(35)

The prognoses of profit contained in the Seafish Merger
Report of 27 September 1999 are based on a number of

(1) Case C 482/99 France v Commission, [2002] ECR I-4397.

(38)

From the figures and data contained in the report the
Commission observes that the UK’s arguments have not
been applied correctly and thoroughly.
In absence of
comprehensive data pointing to the decision to invest,
the Commission considers,
indeed, that the investment
cannot be considered a profitable investment and thus
that SLAP had not acted like a normal private investor.

W h a l s a y R e p o r t

(39)

The Whalsay report was issued by the managing director
of Whalsay Ltd and cannot be considered to be an inde-
pendent report on Whalsay and on the possible acqui-
sition of the company by Shetland Seafish Ltd In the
report
is stated that both companies clearly suffer
from the restrictive supplies of salmon on the market
and that a merger between the two companies ‘offers
not only the best, but maybe the only chance of securing
continued and sustainable employment in this industry’.

it

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The report furthermore concludes that ‘The decision of the
Board of SLAP, should it approve proposals to invest in the
merger between Seafish and Whalsay, must therefore be to a
background of ensuring that salmon supplies are secured on an
the risk of not achieving this must make
enduring basis;
approval of the merger a highly risky decision and leave both
SLAP and Seafish vulnerable.’.

(46)

(40)

(41)

that no additional

The report clearly expresses doubts as to the profits
following from the merger between the companies and
the reference to securing employment in this industry.
Furthermore, the report does not contain sufficient data
to show the profitability of the investment in question. It
shows
information has become
available and been used when deciding to invest; the
the
United Kingdom has
decision to invest was indeed taken solely on the basis
of this report. Therefore, in particular having regard to
the doubt expressed in the report and the lack of addi-
tional data proving otherwise, the Commission can only
conclude that this investment would likewise not have
been decided upon by a normal private investor.

explicitly confirmed that

(42) With regard to the foregoing, the Commission considers
that the investments in Shetland Seafish Ltd made in
1999 and 2000 by SLAP are not normal commercial
investments which could have been decided upon by
any normal private investor.

(43)

information available,

From the
the Commission
concludes that the companies involved, L.A. Williamson
Ltd and Ronas Ltd, merged into Shetland Seafish Ltd and
Whalsay Ltd, would not have been able to continue
operating without
In any
case, the investments have strengthened their position
on the market, which would not have occurred
otherwise.

the investments concerned.

Selectivity and distortion of competition

(44)

The investments are for the benefit of the companies
involved, and these companies are in direct competition
with other fish processing companies both within the
United Kingdom and in other Member States; therefore
they distort or threaten to distort competition.

Conclusion

(45)

In the light of the foregoing the investments of SLAP in
Shetland Seafish Ltd are regarded as State aid within the
meaning of Article 87 of the EC Treaty.

B. Compatibility with the common market

State aid can be declared compatible with the common
market if it complies with one of the exceptions set out
in the EC Treaty. As regards State aid to the fisheries
sector, State aid measures are deemed to be compatible
with the common market
they comply with the
conditions of the 2004 Guidelines for the examination
of State aid to fisheries and aquaculture (1). According to
point 5.3 of those Guidelines, an ‘unlawful aid’ within the
meaning of Article 1(f) of Regulation (EC) No 659/1999
will be appraised in accordance with the guidelines
applicable at
the time when the administrative act
setting up the aid has entered into force.

if

(47) As the investments made by SLAP took place in 1999
and 2000, the compatibility of the aid will have to be
assessed under the Guidelines for the examination of
State aid to fisheries and aquaculture of 1997 (hereinafter
referred to as ‘the Guidelines’; see point 22)), which were
in force at the time.

(48) According to point 2.3 of

the Guidelines, aid to
investment in the processing and marketing of fishery
products may be deemed compatible with the common
market provided that the conditions for granting it are
comparable with those laid down in Regulation (EC) No
least as stringent, and provided
3699/93 and are at
further that the level of the aid does not exceed,
in
subsidy equivalent, the overall level of the national and
In
Community subsidies permitted under those rules.
that are,
addition,
according to Regulation (EC) No 3699/93, not eligible
for Community assistance, the Commission has to assess
its compatibility with the objectives of
the Common
Fisheries Policy on a case-by-case basis.

the aid concerns

investments

if

(49) According to Article 11(1) of Regulation (EC) No
2468/98, which replaced Regulation (EC) No 3699/93
on 3 November 1998 (2), Member States may under
to that
the conditions of Annex II
regulation take
measures to encourage capital
investment in the field
of processing and marketing of fishery and aquaculture
products. Point 2.4 of Annex II states that eligible
investments
in
particular relate to the construction and acquisition of
buildings and installations,
to the acquisition of new
equipment and installations needed for the processing
and marketing of
fishery and aquaculture products
between the time of landing and the end-product stage
or to the application of new technologies intended in
particular to improve competitiveness and add value.

for processing and marketing shall

(1) OJ C 229, 14.9.2004, p. 5.
(2) Council Regulation (EC) No 2468/98 of 3 November 1998 laying
down the criteria and arrangements regarding Community structural
assistance in the fisheries and aquaculture sector and the processing
and marketing of its products (OJ L 312, 20.11.1998, p. 19).

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(50)

The investments of SLAP cannot be considered to be
issues and
investments
should thus
the
Guidelines be assessed on a case-by-case basis.

relating to either of
in accordance with point 2.3 of

these

considers
precludes recovery for the following reasons.

in the present

case,

that,

that principle

(51) As the investments have the effect of

improving the
general financial situation of Shetland Seafish Ltd, this
aid should be viewed as operating aid.

(52) According to the general principles laid down in point
the Guidelines, aid which is granted without
1.2 of
imposing any obligations on the part of recipients and
which is intended to improve the situation of under-
takings and increase their business
is
calculated on the quantity produced or marketed,
the means of
products prices, units produced or
production, and which has the effect of reducing the
recipient’s production costs or improving the recipient’s
income is, as operating aid,
incompatible with the
common market.

liquidity, or

(56) On 3 June 2003 the Commission, by Decision
2003/612/EC, took a negative decision regarding loans
granted for the purchase of fishing quotas in the Shetland
Islands (1).
In its decision the Commission stated that
whilst there was no necessary link between actions and
decisions of
the Commission in relation to the
Community Structural Funds in the context of Council
Regulation (EC) No 1260/1999 (2) and Commission
in the specific circumstances in
decisions on State aid,
the case in question,
legitimate expectations as to the
private nature of the fund in question may have been
created through the combination of a number of events.

(57)

The Commission found that both it and the United
Kingdom government had consistently acted in such a
way as to suggest that the fund was a private fund for
the rules governing the Community
the purposes of
Structural Funds, and that even if,
legally speaking,
there was no automatic link between the two issues,
this may have led to a reasonable assumption on the
part of
that
grants from such a fund did not fall under the rules
on State aid,
thus creating legitimate expectations in
this respect.

the national authorities and fishermen,

(53) With regard to such operating aid, it is pointed out in
that point of
the Commission is
the Guidelines that
required to assess it on a case-by-case basis where it is
linked to a
restructuring plan considered to be
compatible with the common market.

(58)

(54)

The United Kingdom has not provided any restructuring
plan for the Commission to assess. Since, according to
the Guidelines, operating aid can only be declared
if such aid is
compatible with the common market
linked to a restructuring plan compatible with the
common market, the investments do not comply with
the Guidelines.

C. Recovery of the aid.

(55) Under Article 14(1) of Regulation (EC) No 659/1999,
where negative decisions are taken in case of unlawful
aid, the Commission must decide that the Member State
concerned must take all necessary measures to recover
the aid from the beneficiary. The Commission should not
require recovery of the aid if that would be contrary to a
general principle of Community law. The principle of
a general
protection of
Commission
of
principle

expectations
The

legitimate
Community

law.

is

it considered in its Decision that,

In addition,
in the
European Regional Development Fund (ERDF) under
the Highlands
I programme
and Islands Objective
1994-1996, the funding from SLAP was regarded as a
private contribution. Furthermore, given the close links
the Shetland Islands
between Orkney and Shetland,
authorities were probably aware of
the
parallel Orkney Reserve Fund (Case C 87/2001 (3)) was
considered in practice by the United Kingdom authorities
and the Commission as being of a private nature, thus
making it permissible to provide a private co-financing
contribution in the context of
financing from the
European Agriculture Guidance and Guarantee Fund
(EAGGF).

the fact

that

(59) Accordingly, the Commission took the view that those
elements, taken together, had created a legitimate expec-
tation among the Shetland authorities and the bodies
the
involved,
as well
Commission concluded that,
they
might have wrongly assumed that the State aid rules of
the Treaty did not apply, even if legally speaking there
was no automatic link between the two issues.

the
in view of

fishermen;
that,

among

as

(1) OJ L 211, 21.8.2003, p. 63.
(2) OJ L 161, 26.6.1999, p. 1.
(3) OJ C 38, 12.2.2002, p. 2.

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(60)

(61)

The investments of SLAP currently under investigation
are funded from the same type of funding, during the
same timeframe. Just as in that case, the actions of SLAP
were considered to be the actions of a private company,
concerning private funding from the Shetland Islands
In addition, given the circumstances
Charitable Trust.
and the specific features of
the Shetland community,
Shetland Seafish Ltd must have been aware of the loan
fishing quotas and in
scheme for the purchasing of
in
particular
paragraph 68 of Decision 2003/612/EC, stating that
the grants and loans from the Charitable Trust would
be regarded as private contributions.

explanatory

referred

leaflet

the

to

It is established case law that there can be no legitimate
expectations in favour of
the beneficiary of an aid
deriving from the behaviour of a national authority
when the procedure laid down in Article 88 of
the
Treaty had not been followed (judgment of the Court
in Alcan Deutschland (1)). However, since the Commission
has also consistently acted in such a way as to suggest
that the fund is a private fund, the Commission considers
that, given the circumstances of the case and the decision
of the Commission referred to above, both SLAP and
Shetland Seafish Ltd, the beneficiary of the aid, could
assume that only private funds are involved and that,
therefore, the State aid rules of the Treaty did not apply.

(62) On those grounds and on the basis of Article 14(1) of
Regulation (EC) No 659/1999, since the principle of
‘general
protection of
principle of Community law’, recovery of the aid from
which Shetland Seafish Ltd has benefited will not be
required.

expectations

legitimate

is

a

the EC Treaty, unlawfully
breach of Article 88(3) of
granted aid to Shetland Seafish Ltd by acquiring shares
in the company under circumstances and conditions that
would not have been acceptable to a normal private
market-economy investor.

(64)

The Commission considers that these investments are not
compatible with the common market inasmuch as they
investments
cannot be considered normal commercial
which could have been decided upon by any normal
private investor,

HAS ADOPTED THIS DECISION:

Article 1

The aid granted in 1999 and 2000 by way of investments made
by Shetland Leasing and Property Ltd in Shetland Seafish Ltd is
not compatible with the common market.

Article 2

The aid mentioned in Article 1 does not have to be recovered.

Article 3

This Decision is addressed to the United Kingdom of Great
Britain and Northern Ireland.

Done at Brussels, 7 December 2005.

V CONCLUSION

(63)

In the light of the assessment made in Section IV, the
in
Commission finds that

the United Kingdom has,

For the Commission

Mariann FISCHER BOEL
Member of the Commission

(1) Case 24/95, Land Rheinland-Pfalz v. Alcan Deutschland [1997] ECR

I-01591.