A £9 MILLION bank loan was taken out to fund a Manx film, despite the money being available in an account there to finance the industry, it’s been revealed.
CinemaNX, which manages government’s Media Development Fund but doesn’t come under the Financial Supervision Commission’s remit, took the £9,054,085 loan out to help finance Me and Orson Welles in 2008.
There was a £7.6m write-off against the investment in the Zac Efron film
The loan information emerged during House of Keys question time this week, when Peter Karran (LibVan, Onchan) asked Treasury Minister Anne Craine whether bank loans taken by CinemaNX were used for investment in Me and Orson Welles for the company on its own account or for an investment on behalf of public funds. Mrs Craine said the latter was the case. When asked why the loan was necessary when there were adequate funds in an account accessible by CinemaNX, Mrs Craine said it was to take advantage of falling interest rates during the financing of the film. The loan was repaid on September 1, 2009.
The Manx Independent understands that to use the fund’s own account, CinemaNX needs permission from the Treasury. The amount of the loan was not revealed during question time but the Independent asked Mrs Craine for confirmation of the amount following the Keys sitting.
It was revealed last month Me and Orson Welles, released in December 2009 and starring Zac Efron, accounted for a £7.6 million write off. Receipts totalling £1,936,857 were made from the same film. But Mrs Craine has been quick to say the money written off comes from funds created by the industry itself and not from taxpayers’ contributions.
This week, in an effort to support Mrs Craine’s defence of the film industry, Economic Development Minister Allan Bell asked her to confirm the MDF was established in 2002 with a balance of £25 million, money made by Manx films prior to that date. Mr Bell, whose department the film industry covers, also asked her to confirm that in 2007, when CinemaNX took over the management of the MDF, the fund totalled almost £50m, entirely made through Manx films. Mrs Craine confirmed both points.
Mr Karran’s questioning appears to be an attempt to get to the bottom of what financial success there has been since 2007, when CinemaNX took over and there was a change in the VAT agreement.