The Chief Minister challenged the Liberal Vannin leader to put down a vote of no confidence in his leadership over the controversial Sefton Group £4.5 million bail-out deal.
In a bad-tempered exchange in the House of Keys Allan Bell defended the government’s intervention, insisting that doing nothing could have put hundreds of jobs and confidence in the wider Manx economy at risk.
‘You have to make a judgement call. The buck stops with me,’ he said of the deal to loan £1.3 million to the debt-ridden plc, and buy-up and lease back the Middlemarch site for £3.2 million, which was signed on Thursday.
But Peter Karran (Lib Van, Onchan), who raised the issue in the Keys as a matter of urgent public importance, said he had repeatedly highlighted concerns about the finances of the Sefton Group, including calling for an investigation by the Financial Supervision Commission back in 2006.
He claimed the bail-out was about ‘people knowing the right people’. ‘In reality this would not happen anywhere else,’ he told MHKs.
rebuke
This brought a swift rebuke from Mr Bell: ‘This constant denigration and assertion of corruption, of cronyism, that we are only helping our friends is utterly disgusting.
‘I would suggest to Mr Karran if he is so concerned about the leadership of this government, put a vote of no confidence down. You’re the one who thinks you should be chief minister. I’m very happy to stand aside and let you sort it out.’
Leonard Singer (Ramsey) suggested that directors of the Sefton Group who were directors at the time that ‘disastrous’ decisions were made that put the Sefton Group into such ‘dire straits’ should ‘have the decency and self-respect to resign their positions’.
Mr Bell said he ‘agreed entirely with those sentiments’. He said he had raised this point ‘most forcibly’ as recently as the day before and the situation is being considered changes may well be seen between now and the Sefton Group’s AGM in July.
He said the Sefton Group had ‘brought it on themselves’ but he had to make decisions in the best interests of the island – ‘not just getting revenge for, frankly, a lunatic who was running this company for a number of years and did serious damage’ – a reference to Graham Ferguson Lacey who stepped down as chief executive in 2010, citing ill health.
Howard Quayle (Middle) suggested the deal to buy the Middlemarch site off the Group for £3.2 million and then lease it back to the company with the option of it buying it back after five years, for the purchase price plus inflation, was in a reality a low interest loan.
Mr Bell insisted the deal could ‘no way be characterised as putting public funds into a failing business’ as the Sefton Group’s core business was ‘profitable and sustainable’. He said all the proposals were vetted by the Attorney General’s office.
He spoke of a two-speed economy, with the international economy driven by the e-Gaming sector faring well while the local economy was ‘creaking’. Alfred Cannan (Michael) argued the Sefton Group should have been placed into receivership and a buyer found. He said the ‘bleak picture’ of mass close downs and jobs losses was not a true one. Kate Beecroft (Lib Van, Douglas South) agreed, accusing the Chief Minister of ‘scaremongering’.
Mr Bell said any would-be buyer would seek to cherry-pick the best assets and with receiverships being costly and complicated, such a route would likely have involved substantial costs to customers, the economy and government revenues.
David Quirk (Onchan) asked if Treasury had concerns about the finanical set-up of Parkinson’s, a subsidiary of the Sefton Group, when it was awarded the contract for the latest phase of the redevelopment of Janet’s Corner, Castletown. Mr Bell replied that the usual due diligence checks were carried out.
The Sefton Group has sold the assets of Parkinson’s which is now being wound up, the contract at Janet’s Corner being its last.