THE Liberal Vannin party has resumed its questioning of the financial arrangements of the island’s film industry.
In the House of Keys, Kate Beecroft (Lib Van, Douglas South) asked how many subsidiaries CinemaNX owns, whether it still has a deposit account of £25 million and whether it has given any parental guarantees to any of its subsidiaries that could affect its ability to repay that £25m-plus to the government ‘should the contract not be renewed’.
Treasury Minister Eddie Teare MHK confirmed that was still a deposit account containing £25m, which matures in August 2012.
He said there were eight subsidiary companies and there were no parental guarantees which could affect the ability of CinemaNX to return the £25m capital.
Mr Teare said that the account could not be accessed without the approval of the Treasury, which holds a first charge over it. He said in respect of the interest earned on the account this would be paid to CinemaNX under the terms of the 2007 agreement in order to finance its ongoing activities.
Mrs Beecroft said: ‘Is the minister aware that CinemaNX Music Ltd is a subsidiary of CinemaNX Ltd and that it has net liabilities – or had net liabilities – of £42,394 at June 30, 2010? Is the minister satisfied that none of the other subsidiaries are equally, or even more, insolvent?’
Mr Teare replied: ‘I think the member needs to be aware that the Isle of Man Government has the first legal mortgage on the deposit and the first legal mortgage stands against anything else. I personally checked the security and I am comfortable with it.’
In the last parliamentary session, Lib Van leader Peter Karran MHK, now Education Minister, asked a series of questions in the Keys and Tynwald about CinemaNX’s financial dealings.
It emerged that Treasury approved funding of nearly £34m on 13 film projects since 2007 – but the island’s movie industry brought in only £6.3m income in that time.
But CinemaNX chairman Steve Christian insists that no taxpayers’ money has been lost and claims the industry, since its inception, has provided a direct economic benefit to the island totalling up to £250 million.
CinemaNX is a private limited company set up in 2007 to handle the financing of new film projects. The £50m balance of the Media Development Fund, set up in 2002 with a £25m transfer, was effectively handed over to the company.