The loans made by the government to the Sefton Group in 2012 and 2013 have now been ratified and placed on a secure legal footing.
Chief Minister Allan Bell told Tynwald this week that legal advice suggested Treasury had an existing power granted by the Financial Provision and Curency Act of 2011 to place the loans on a sound legal footing or enter into an agreement with the Sefton to secure repayment.
During the June sitting Mr Bell said a commitment had been given to report back on the Sefton loans once legal advice on how to rectify the situation had been considered.
‘I am pleased to report that since then, not only has the original legal opinion been considered but government has also taken the necessary steps required to bring this matter to a conclusion,’ he said.
Advice from advocate Richard Moules, taken after the June Tynwald sitting, suggested three possible strategies to regularise the loans.
The first strategy – the one taken – was to use existing powers under the 2011 act. Alternatively new legislation could have been enacted to validate the loans retrospectively. A third possibility, Mr Moules said, was simply not to seek restitution, but this was not recommended and would not regularise the original transactions.
In the light of this advice, Mr Bell said a three party agreement had been entered into between the Treasury, the Department of Economic Development and the Sefton Group.
‘Acting on the advice of counsel, I can now report this agreement is now in force and the new agreement does not change the terms of the original agreements in any way and is therefore neutral on all parties,’ Mr Bell said.
Mr Bell also told Tynwald members steps were being taken to discover how the situation had arisen.
‘I believe the mistakes were made in good faith and we are now in a position where the issue is resolved,’ he said.
Michael MHK Alfred Cannan said he was concerned the act which was passed to deal with a £2 million discrepancy on the airport runway extension was now being used as a ‘carte blanche’ to justify the Sefton loans.