A Minister told MHKs he will ‘fall on his sword’ if he is found to have acted inappropriately over the Sefton bail-out.
The House of Keys was once again dominated by questions over the government’s deal to loan £1.3 million to the debt-ridden plc and to buy and lease back the Middlemarch site on Lord Street, Douglas.
Economic Development Minister John Shimmin, quizzed over his role in the bail-out, pointed out that the whole issue had been referred to Tynwald’s economic policy review committee.
He told the Keys: ‘If I have acted in any way inappropriately then I will fall on my sword.
‘If there has been a technical mistake or a legal mistake that we will find it.’
Mr Shimmin said the loan of £1.3 million and an earlier one of £450,000 were exactly the kind of purpose for which the Enterprise Act had been introduced.
He said he was satisfied the act, which enables his department to provide grants to eligible businesses, was fit for purpose and was likely to remain so for the foreseeable future.
Peter Karran (Lib Van, Onchan) asked him to circulate a copy of the legal advice that had been given to the department.
Mr Shimmin replied that Mr Karran was ‘more concerned about getting heads rolling and things to fail’. But he said that if there were lessons to be learned they will be learned.
‘The idea is to learn and move forward rather that this blame game,’ he told MHKs.
The Minister gave more details about the buy and lease back of the Middlemarch site - and revealed that a second company had also been given the option to buy the plot.
He insisted that the deal had been the best on the table.
Mr Shimmin said the government would have like to have had further safeguards but ‘if we had pushed for that then the deal would have collapsed.’
He explained that the Sefton Group was leasing back the site on a five year lease, with the company responsible for all out-goings.
The property was being let at a rent of £160,000 per year exclusive, paid quarterly in advance. He confirmed the first quarter’s rent has been paid.
Mr Shimmin said the Sefton Group’s option to buy the site back lasted for five years.
But in parallel with this, and due to an existing covenant on the land in respect of car parking, there is also an option to Twickenham Ltd, the covenant owners, to acquire the plot on the same terms.
This option follows the expiry of the Sefton’s one and lasts for a period of three months.
The Minister said if neither of these options is taken up, the government then has the right to require the site be bought back by the Sefton Group. This option lasts for a further five years.
He said the price in each case would be the purchase price of £3.2 million plus inflation.
‘In this manner, the taxpayer is protected from any fall in value of the site while the Sefton Group and Twickenham have the clarity they require,’ he said.
Alfred Cannan (Michael) asked why the government hadn’t simply purchased the site given its strategic importance for development.
Mr Shimmin conceded this was something the government could have done in theory. But he said the Sefton Group was still ambitious to develop the area.