A businessman closed his waste disposal firm after the UK Cabinet Office said he was not to be paid, a court heard.
Garry Pettigrew, 56, was managing director of Healthcare Environmental Services (HES) which had sites in Shotts, Lanarkshire, Dundee and England.
He is on trial at Hamilton Sheriff Court where he denies breaching environmental laws including illegal storage of human body parts and other medical waste between May 2017 and April 2019.
Pettigrew, who held NHS contracts in Scotland and England, claimed he had been told by the UK Government HES was in the top 40 companies which were “crucial” to the infrastructure of the country.
But due to a build-up of medical waste a contingency plan was launched which would see waste sent to seven unlicensed sites in a bid to clear the backlog.
He said then health secretary Matt Hancock MP chaired a COBRA meeting to “instigate” the plan in September 2018 which Pettigrew claimed would be “illegal”.
Pettigrew claims he then received a phone call from HSBC telling him they were restricting his access to a bank account containing £400,000.
He alleged the bank had been told by the Cabinet Office they were not going to pay him.
This prompted Pettigrew to put all his staff on “gardening leave” before they were told they were not going to be paid at a meeting just after Christmas 2018.
He told the trial an Australian company had been in discussion to buy HES for £18m but pulled out of the deal amid claims they had been told by the Cabinet Office to let HES go bust and then buy it from receivers.
Pettigrew described breaking the news to staff about non-payment of wages as the “hardest day” of his life.
Giving evidence to Thomas Ross KC, defending, Pettigrew, who also claimed he was treated as a ‘problem child’ by environment watchdog SEPA, said: “I went to a meeting with the UK Cabinet Office in September 2018 and I was told I was a top 40 company crucial to the UK infrastructure but now I was a problem.
“They were going to use seven sites which were unlicensed to store waste and the Environment Agency was going to give dispensation and I said this would be illegal and would not solve the problem.
“Matt Hancock then chaired a COBRA meeting to instigate the contingency plan.
“There was this ‘body parts scandal’ which was the headline at the time for what was meant to be going on which could not have been further from the truth.”
He added: “On December 4, 2018 I got a call from HSBC asking for a meeting.
“They told me they would not be allowing us any further access to the bank account which had roughly £400,000 in it.
“They had been told by the Cabinet Office that they were not going to pay us so they were going to limit their liability.
“I had to then speak to every depot manager and tell them we had to get every vehicle back to the yard which meant drivers were coming back to depots full of waste because we couldn’t tip waste because we had no facility to pay the suppliers.
“On December 17, 2018, I received a phone call from an Australian company who were close to buying us for £18m and they said they were pulling out.”
The trial had earlier heard the cost of clearing the HES site in Shotts rose to almost £660,000 and took nearly all of 2020 to clear the plant which was “wall-to-wall” with medical waste.
Peter Wightwick, a contractor, said his team had to burst open pallets of medical waste and found containers of human body parts mixed with other rubbish.
Photographs shown to the court included one of a penguin carcass which is said to have come from Edinburgh Zoo.
Wightwick claimed other dead animals were found at the site but were unidentifiable because they had turned to a “kind of liquid fur”.
HES went into liquidation in April 2019 after losing NHS contracts.
The trial before Sheriff Liam Murphy continues.