THE Liberal Vannin Party has issued a statement to say why it’s opposed to the government’s Sefton Group deal
It says: ‘The recently announced deal has been met with disgust by the Liberal Vannin Party.
‘The rescue package consists of a £1,300,000 bail out to stop the Sefton from going under and the purchase of the Middlemarch site in Lord Street from the Sefton Group for £3,200,000.
‘The proposal is that the Sefton Group lease this site back from Government for five years at £160,000 per annum.’
{http://www.iomtoday.co.im/news/isle-of-man-news/govt-bail-out-struggling-sefton-group-1-5597293|Last week’s story about the Sefton bailout}
The party says: ‘This deal was completed on April 18 without the knowledge of, or input from, any MHK other than the Chief Minister and his Council of Ministers.’
The party leader, Peter Karran MHK (Onchan), is to table a question in the House of Keys on Tuesday to ask for the government’s justification for its action.
He said: ‘It does not make sense. Government has no business using public funds to bail out a failing PLC.
‘The banks and the shareholders are the risk-takers and they reap the profit when times are good so they also have to take the financial hit when things go wrong.
‘What about all the smaller businesses who are in financial difficulty? We don’t see government bailing them out!
This rush to make sure the hotels are open for TT week is rubbish.
‘If the company went into liquidation/administration the financially viable parts of the group would be kept open for business whilst a buyer was found.’
The party lists a number of questions it would like to see answered.
· Why won’t the banks offer additional finance if the group is so viable particularly as it is reported to have reduced its debt from £96 million to £24 million in just three years?
· Why should the government be stepping in if professional financiers don’t have the confidence to help?
· Have they attempted to sell any of the assets themselves?
· How much is currently owed to government by the Sefton Group for ITIP, NI and VAT?
· What are the terms of the £1,300,000 loan? Is there any security?
· Where does the £1,300,000 loan rank? i.e. do the banks have the first or second charges?
· What happens if the Sefton Group fail to meet their financial obligations to government under this deal?
· When was the last time the Middlemarch site was independently valued and what was that valuation?
· Who is taking responsibility for the due diligence and the appraisal of this package?