The President of Tynwald, a former MHK and the man who was once the island’s most senior civil servant have given evidence for the prosecution at the Jason Scales fraud trial.

On the sixth day of the trial, former MHK Paul Quine told the jury how he was the first to raise concerns with Ministers over false claims that the Isle of Man Government was financially supporting a deal to purchase Stobart Air.

Mr Scales, 30, of The Bretney, Jurby, denies one count of fraud and two of supplying an article for use in a fraud.

Paul Quine, a commercial airline pilot for 30 years and currently employed by Loganair, was MHK for Douglas South on May 21, 2021 when he said he received a text message from then Loganair chief executive Jonathan Hinkles asking him to call him.

Mr Hinkles told him that he had been in contact with Aer Lingus executive Reid Moody who had expressed some concerns over documents he had in relation to the proposed purchase of Stobart Air by Mr Scales’ company Ettyl.

The witness said he called Mr Moody who explained that Aer Lingus had to agree the purchase as it had a franchise agreement with Stobart Air.

Mr Quine said he was told that the purchase price was a nominal £2 but the deal included a written guarantee of £13m underwritten by the Manx government.

‘Did that take you by surprise?’ prosecutor James Robinson asked him. ‘Very much by surprise,’ he replied. ‘I could not imagine such an undertaking would not be in the public domain.’

Mr Quine said the Aer Lingus executive told him that he was in receipt of documents signed by Department for Enterprise chief executive Mark Lewin and chief secretary Will Greenhow purporting to show the government’s underwriting the deal.

The witness said he would have expected, given the sum involved, that the matter would have gone before Council of Ministers, signed off by Treasury and debated in Tynwald.

‘I was aghast to be perfectly honest,’ he said, adding he had no reason to doubt Mr Greenhow’s ‘rectitude’ and he had known Mr Lewin most of his life and knew him to have the ‘highest integrity’.

He said he had bumped into then Chief Minister Howard Quayle outside the Legislative Buildings who greeted his remarks about the government underwriting a £13m loan with ‘complete disbelief’.

Mr Quine said he outlined his concerns to then Enterprise Minister Laurence Skelly, now President of Tynwald, who he said was ‘incredulous’ and who agreed to take the matter up directly with Mr Moody.

Taking the stand, Mr Skelly said had known Mr Scales through his department’s financial support for the Hubb blockchain office.

He said he had taken a call from Mr Scales one weekend towards the end of March 2021 who told him he was pursuing the Stobart Air venture and inquired about government support.

He said he had passed the inquiry on to officers in the department. Mr Skelly denied having ever promised financial support.

Mr Skelly said the defendant had been seeking £10m - which compared with the DfE’s overall budget of £3m for financial support schemes. But he said no formal application for funding was ever made and no political decision therefore required.

He said when Mr Quine raised his concerns, his reaction was one of ‘great surprise and shock’. He subsequently spoke to Mr Moody at Aer Lingus and suggested he seek validation of the documents.

Former chief secretary Will Greenhow told the court that on May 25 he had received an email from Mr Moody requesting validation of some documents and asking to confirm that the Manx government was financially backing the deal.

Mr Lewin at DfE formally requested sight of the documents which were duly sent on May 26. One purported to be a letter of guarantee and indemnity between the Isle of Man government as guarantor and UK lending agent Paradigm VL Group as creditor.

‘Is that you signature?’ Mr Greenhow was asked. ‘No,’ the witness replied.

He said the matter was referred to the Attorney General’s chambers for advice and then to the police.

Cross-examining, defence advocate Laurence Vaughan-Williams said there was no dispute that the ‘Greenhow guarantee’ document was not genuine. But he added: ‘What the defence is unable to establish is the provenance of that particular document.’

The prosecution was due to conclude its case at lunchtime today (Thursday) with the defence to open its case tomorrow.

The trial continues.