The Sefton loan and land purchase deal is ‘good news for the taxpayer’, Economic Development Minister John Shimmin has insisted.
Speaking in public for the first time about the controversial deal, Mr Shimmin maintained the £1.3 million loan and purchase of the Middlemarch site for £3.2 million was not a bail-out.
And he defended the way that an earlier loan of £450,000 to the Sefton Group was not initially made public.
Mr Shimmin, who was leading a trade mission in China when the deal was announced last month, told the Examiner: ‘It’s not a bail-out.
‘We’ve been talking to the Sefton Group, as we talk to many businesses, for a long period of time.
‘I’m fully supportive of what we’ve done in government which I believe does not just protect the jobs and the interests of the Sefton Group but is actually very good news for the taxpayer.
‘What we’ve done is acquire a parcel of land in a prime location in the centre of Douglas below the market rate. We’ve got a five per cent return plus on that investment and a £1.3 million investment as a loan to a company which employs many people and were certainly the business not to have been supported there would have been significant extra costs to the taxpayer.
‘So again we are getting a return on the investment of taxpayers’ money, we are protecting local jobs which is an important part of our role and certainly the team work between the Sefton, ourselves and other parties to ensure the long term viability I think is a really good news story.‘
‘I regret the fact that a number of people have picked this up as being something which is untoward. It is something within our normal powers and as we’ve been saying for many years now, things have changed, we’ve got to take a few risks, we’ve got to do things a little bit differently but actually I think this is something which is good news for the taxpayer to protect businesses and jobs.’
Mr Shimmin said the £450,000 loan made last year was to deal with a cashflow issue. ‘That is something which we do in order to facilitate businesses to repay their debts. The second part of it was the acquisition and loan that was worked up in the last few months. Again it’s been all parties working together. If government hadn’t come in there would have been a breakdown in some of the other opportunities available so what we think we’ve done is assist a company to get back onto a level playing field so it can now be successful, as it has in the past, into the future.
‘This really actually is protecting a good business in the Isle of Man in a way which is appropriate and within the normal terms.’
Asked why the original £450,000 loan wasn’t initially made public, Mr Shimmin replied: ‘The spotlight has been put on this. This is what we do in government at times. We come to arrangements with businesses and quite often we give grants out which are non-repayable. Therefore the taxpayer doesn’t worry about those grants because they see it’s linked to jobs and employment. That’s what this is.
When you have a cashflow situation caused by events within a certain business they come to talk to government, be it the tax office, Treasury or my department.’
In the House of Keys, Social Care Minister Chris Robertshaw MHK, a former shareholder and director of the Sefton Group, insisted he had no conflict of interest - as he had absented himself from any discussions or votes in the Council of Ministers about the bail-out.
He told MHKs: ‘For absolute clarity I sold out my holding in the Sefton in 2005 as I was deeply uncomfortable with the rest of the board’s determination to engage with Mr Graham Ferguson Lacey and the significant credit line he then enjoyed with certain banks.’
Mr Robertshaw said he had sold 2,000 shares retained for ‘sentimental reasons’ after he was elected as an MHK in 2010.
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