Press Release 21 April 2013

LibVan is Disgusted at Sefton Deal

The recently announced deal to get the Sefton Group out of financial trouble has been met with

disgust by the Liberal Vannin Party. The rescue package consists of a £1,300,000 bail out to stop the

Sefton from going under and the purchase of the Middlemarch site in Lord Street from the Sefton

Group for £3,200,000. The proposal is that the Sefton Group lease this site back from Government

for 5 years at £160,000 per annum.

This deal was completed on 18th April without the knowledge of, or input from, any MHK other than

the Chief Minister and his Council of Ministers.

Party Leader, Peter Karran MHK, is to table a question of urgent national importance on Tuesday to

try to ascertain the Government’s justification for their action. He said, “It does not make sense.

Government has no business using public funds to bail out a failing PLC. The banks and the

shareholders are the risk takers and they reap the profit when times are good so they also have to

take the financial hit when things go wrong. What about all the smaller businesses who are in

financial difficulty? We don’t see Government bailing them out! This rush to make sure the hotels

are open for TT week is rubbish. If the company went into liquidation/administration the financially

viable parts of the Group would be kept open for business whilst a buyer was found.”

There are many questions which need to be answered. For instance:

Why wont the banks offer additional finance if the Group is so viable particularly as it is

reported to have reduced its debt from 96 million to 24 million in just three years?

Why should the Government be stepping in if professional financiers don’t have the

confidence to help?

Have they attempted to sell any of the assets themselves?

How much is currently owed to Government by the Sefton Group for ITIP, NI and VAT?

What are the terms of the £1,300,000 loan? Is there any security?

Where does the £1,300,000 loan rank? i.e. do the banks have the first or second charges?

What happens if the Sefton Group fail to meet their financial obligations to Government

under this deal?

When was the last time the Middlemarch site was independently valued and what was that

valuation?

Who is taking responsibility for the due diligence and the appraisal of this package?

During the budget debate in February this year Kate Beecroft, Liberal Vannin MHK for Douglas

South, questioned the Treasury Minister about six million pounds which was to be transferred to the

Land and Property Acquisition Reserve. Paragraph 10.4 stated, “Treasury are aware that several

discussions over potential strategic land and property purchases are currently in progress and have

decided to top up this reserve to facilitate their acquisition – if agreement can be reached over their

purchase values.” She asked the Treasury Minister to clarify what potential purchases this was

referring to. As would appear to be Minister Teare’s usual style, he did not give a reply.

Kate added, “ It does make you wonder if this deal was being negotiated then. The Government

may have the vires to make £1,300,000 bail out under the Enterprise Act but what about the

purchase of the Middlemarch site? Surely the purchase of an asset for £3,200,000 should be

debated and voted on in Tynwald? If Government has the power to do this without Tynwald

approval, I would like to know which Act gives them that power as it needs to be amended as a

matter of urgency.”

LibVan believes that these, and many more questions, should be answered by the Council of

Ministers as they are all responsible for allowing this deal to go through.

“ENDS”

Peter Karran MHK Leader, Liberal Vannin Party T: 626379 Peter.karran@liberalvannin.org

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