Trevor Baines

[Tugger]

a deal had been done which saved millions in court fees

 

and costs hundreds of millions in payments

 

I am sure Barclays, the Lawyers who gave the opinion and the MEA board would all be of the belief that it did not

 

I'm sure they all breathed a huge sigh of relief when the government rolled over for its belly to be tickled. It was, to all intents and purposes, a gift from the Manx taxpayer. Tynwald wouldn't have needed to retrospectively approve anything that was already valid

[Lost Login]

a deal had been done which saved millions in court fees

 

and costs hundreds of millions in payments

 

That is only the case if you take the view there was any realistic possibility of walking away and leaving Barclays to pock up the cost by writing off the loan. You appear to think that was a likely outcome, my view is that such an outcome was extremely unlikely. According it was pointless racking millions more in legal fees.

 

I am sure Barclays, the Lawyers who gave the opinion and the MEA board would all be of the belief that it did not

 

I'm sure they all breathed a huge sigh of relief when the government rolled over for its belly to be tickled. It was, to all intents and purposes, a gift from the Manx taxpayer. Tynwald wouldn't have needed to retrospectively approve anything that was already valid

I agree the point with regard to Tynwald but the loan was not tested to be proved to be valid or invalid. The validity was questioned and rather than waste million testing probably for no benefit as in my view there was no way Barclays would have picked the cost of writing off the loan Tynwald for once did a sensible thing and ratify to remove any element of doubt. There was no gift from the Manx tax payer as all that has consequently happened is the the loan is being repaid just as would have been the case if there had been no question with regard to its validity.

 

Yes potentially in law the transaction might have been void and the MEA might have got away with repaying but in my view the chances of that were minimal and the long term costs to the IoM would have far outweighed the savings.

 

I read your continual posts on this and i am unsure whether you are either just very naive or are an advocate pissed off that they could not milk the gravy train by pursuing pointless legal action.

 

I am now bored of this subject as it is nowt to do with Baines

[P.K.]

Yes, CH, that sounds like a sure recipe for success - I'll go and tell hard-pressed colleagues in another department that they're incompetent because an anonymous poster on MF says so! I answered your question honestly, but frankly don't see that our people screwed up (nobody else seems to have 'scooped' us by a significant margin - and I think our online news editor was on a 2pm shift today). I guess that MV's media release went to everyone at the same time - the fact he posted it directly here gave MF a head start. Quite why we didn't have anyone in court is beyond me - but there are probably a dozen possible reasons I'm not aware of. Email the editor(s) direct and ask them if it's that important you have a definitive answer.

 

Well done Stu. I've been of the opinion that Mr C has been moving up the pomposity scale of late. I particularly liked the way he accused you of coming up with "a particularly poor excuse" over the actions, or lack of, of another department in the same organisation - like it's your call to cover their ass! Hopefully Mr C will now drop down a couple of notches.

[P.K.]

Firstly anyone who thinks Barclays would have doled out £millions in loans had there been the slightest chance of not seeing their capital plus interest coming back really IS living in cloud cuckoo land.

 

Secondly as I understand it (Profession: part-time LSS Project Manager but mostly caring for the elderly and infirm) Barclays didn't loan the MEA anything. In order to re-finance the MEA need Tynwald approval. So the loans were taken out by the MCC which doesn't need Tynwald approval. BUT the loans were guaranteed - by the MEA! There will be documentation to this effect copies of which will be held by the Select Committee. The money was then passed on by the MCC to the MEA probably by an inter-company loan. Again this will be documented.

 

The issue is that the MEA is guarantor of the MCC and the guarantor of the MEA is muggins Joe Public in the shape of Tynwald. So even though MEA cannot re-finance without Tynwald approval (because Tynwald are their guarantor) it seems they can if it comes via the MCC.

 

Now that might not be 100% accurate as I haven't looked at it for a long while but that's how I remember it.

 

Anyway, it seems the Select Committee looking into the MEA have slowed a bit as their site hasn't changed since this:

 

The Select Committee looking into the MEA issue are due to report soon iirc.

 

Yet their website is a little light on future activities shall we say. Strange.

 

ETA - quiet but not moribund:

 

Title

Amend Report

Priority (2) Normal

Status Not Started

% Complete

 

Assigned To Marilyn Cullen

Description Amend report in response to submissions

Start Date 09/09/2010

Due Date 28/09/2010

 

Created at 09/09/2010 10:47 by Marilyn Cullen

Last modified at 09/09/2010 10:47 by Marilyn Cullen

 

Watch this space!

[Tugger]

Let's not pretend that PK knows anything about the law. He does not (the last time I remember him pretending to was when he started his utterly incorrect legal summary with the oh-so-hilarious words "In my international business experience"!

 

but that's how I remember it

 

You remember it wrong. Tynwald became the guarantor when it ratified the loan. And if you're so bored, you could just fuck off. Or don't, I'm easy either way

 

I can see the argument about the goodwill outweighing the costs, I just don't happen to buy it. I'm unconvinced by anyone claiming to argue about the legality of it all, however

Edited October 5, 2010 by Tugger

[John Wright]

Not too sure about Tuggers memory, analysis or facts either

 

My take is that expenditure needed Treasury/Tynwald approval if by a department or statutory board

 

This expenditure was via wholly owned subsidiary. No one has ever cleared up whether in law this needed Tynwald approval

 

MEA claim is no consent necessary, thus not ultra vires, and or the treasury knew

 

If it did need consent the borrowing was ultra vires, in other words MEA and is subsidiary did not have authority. That might be different if Treasury actually knew

 

If MEA/subsidiary borrowed without authority ie ultra vires, what effect does that have on the lender and its ability to enforce. Clearly the subsidiary had the right in law to borrow. There is no restriction now on Manx companies borrowing and no effective ultra vires rule. We have adopted a NZ law that a company has all of the rights and powers of an individual

 

By giving retrospective authority Tynwald did not legally guarantee the repayment, it just bowed to the probable inevitable outcome of any court case to pay back and avoided large sums of legal fees and a ruined reputation. Practically of course that is the effect of what it did. Strangely it appears it did the decent thing, ie ensured that debts incurred by its nationalised electricity producer were honoured

[P.K.]

My take is that expenditure needed Treasury/Tynwald approval if by a department or statutory board

 

This expenditure was via wholly owned subsidiary. No one has ever cleared up whether in law this needed Tynwald approval

 

MEA claim is no consent necessary, thus not ultra vires, and or the treasury knew

 

If it did need consent the borrowing was ultra vires, in other words MEA and is subsidiary did not have authority. That might be different if Treasury actually knew

 

I'm (Profession: part-time LSS Project Manager but mostly caring for the elderly and infirm) sure the project team thought MCC taking the loan was the quickest way to get the bank (Barclays as it turned out) to release funds because they thought Tynwald approval was not needed. Now someone in the MCC must have signed a facility letter or LOI or whatever with Barclays which would have had the release and repayment etc schedules in it. The same document would have had a MEA signatory as loan guarantor. JW does the Select Committee have this? Who are the signatories?

 

Because I can't see how MEA can guarantee a loan to themselves when their guarantor, Tynwald, doesn't know about it.

 

 

Quite definitely if PC Venables is posting as such I think a sig should be the equivilent of his number on his lapel, a public display of his profession.

 

Sorry Chinanhand but despite having been in the Met I don't think I'll keep up with your insistence that you have to state your profession on here - it's a bit of a drag...

[Chinahand]

I have to say I find Tugger's analysis very unconvincing - there is no doubt that a court would find that the money was still owed to Barclays'. Even if the borrowing was Ultra Vires it doesn't mean the cash becomes someone elses.

 

If the Gov had refused to pay the MEA to pay MCC to pay back the cash to Barclays then MCC would have been bankrupted and Barclays' would have ended up owning MCC - ie the Interconnector Cable, the Fibre Optic Cable etc. That would have given them alot of leaverage to get their money back! They wouldn't be interested in using it as a viable business, just as a means of getting their money back - all it would take was routine maintenance on Pulrose and a evening peak in electicity use and the lights would go out if they weren't cooperating.

 

And this presumes that Barclays weren't able to enforce the MEA guarantee - which to me is dubious as the MEA did underwrite the setting up of PGT with MEA guarantees. Plus MCC HAD borrowed money previously in 1999.

 

None of these actions had been approved in advance, but had been signed off by Treasury and Tynwald retrospectively when they approved the accounts etc in 1999, 2000, 2001, 2002, and 2003. It was only with further borrowing in 2004 that the smelly stuff hit the fan.

 

That sets a huge legal precedent which Barlcays would have gone for with every legal means it had.

 

So huge reputational damage for the IOM, a loss of control of strategic assets and a massive political scandal if and when the lights go out ... ERM now Tugger tell us again why do you think the IOM government shouldn't have paid back the money?

[Chinahand]

Because I can't see how MEA can guarantee a loan to themselves when their guarantor, Tynwald, doesn't know about it.

I'm pretty sure the Electricity Acts give the MEA the power to give Guarantees. I can't remember for certain, but I don't think it needs permission to do this. This all came up when the MEA set up Pulrose Gas Turbine Ltd (PGT) to take over from Enron to finish the new power station. It had to give Guarantees to the main contractors to novate the contracts to an entirely new entity with no history, assets etc!

[P.K.]

I have to say I find Tugger's analysis very unconvincing

 

I've had that spiteful little person on "ignore" for years now. Try it, believe me, you won't miss anything...

 

If the Gov had refused to pay the MEA to pay MCC to pay back the cash to Barclays then MCC would have been bankrupted and Barclays' would have ended up owning MCC - ie the Interconnector Cable, the Fibre Optic Cable etc. That would have given them alot of leaverage to get their money back! They wouldn't be interested in using it as a viable business, just as a means of getting their money back - all it would take was routine maintenance on Pulrose and a evening peak in electicity use and the lights would go out if they weren't cooperating.

 

Of course Tynwald had to pay up to MEA. Who in turn had to pay up to MCC. Who in turn had to pay up to Barclays.

 

Barclays gave the loans to MCC, who had the MEA as a guarantor. So the MEA had to prop up the MCC, because they can't afford to lose MCC assets in default. So Tynwald (no doubt MUCH pissed off) had to pay up to the MEA because they can't afford to lose MEA assets in default i.e. the whole house of cards would have collapsed.

 

I'm also not entirely convinced that anything "illegal" has taken place. For that to happen you have to break a law, NOT a procedure. But somebody somewhere signed the LOI between Barclays, MCC and the MEA.

[Tugger]

I've had that spiteful little person on "ignore" for years now

 

LOL after I ignored all his stalking attempts maybe.

[P.K.]

Interesting. I wonder how long that's been in the public domain.

 

So the MEA (Tynwald) paid up on behalf of the MCC.

[Chinahand]

Just to say over guarantees and the power of MCC to take out loans the PKF report says the following:

 

2.36 As part of the approval process for both loans, Barclays obtained legal opinions from Cains

Advocates on the legality of the loans and also the provision of the guarantee by the MEA. These

opinions were addressed and solely provided to Barclays. The Cains opinion letters are complex

in their structure but conclude that there is no restriction on the ability of MCC to borrow either

under its articles or under the Isle of Man Companies Acts and that, provided that the facilities are

used for purposes that are within the MEAs power, the provision of a guarantee by the MEA is

within its power. We understand that this advice was subsequently confirmed after the event, by

the Attorney General in written advice (of which we have not been provided a copy) to Treasury

dated 15th November 2004.

 

 

The guarantee letter to Barlcays is here - signed by good old Mr Proffitt!

[Chinahand]

Quite definitely if PC Venables is posting as such I think a sig should be the equivilent of his number on his lapel, a public display of his profession.

 

Sorry Chinanhand but despite having been in the Met I don't think I'll keep up with your insistence that you have to state your profession on here - it's a bit of a drag...[/font]

I think people have really missed the point I was making - I think it is absolutely fine for a policeman to post privately and anonymously on the forum - though I'd definitely advise them to be extremely careful if they post about their work as it risks being prejudicial.

 

I am pretty certain no matter what your position in the MET PK you are not posting on here as a policeman.

 

All I am saying is that it probably does make sense to create a log-in along the lines of "IOM Police" which can then post police press releases as PC Venables did, basic advice on policing matters etc.

 

That log in could be used by any of the various policemen who already post on here, allowing them to not get personally involved and would be the equivilent of the MF beat bobby.

 

It would be more immediate and as its a generic log-in not as likely to generate controversy for the individual policeman.

 

I've said it would have to be managed carefully, but I think it would work better than the current system where policemen are posting but where it isn't clear in what capacity - privately or as a community service.

 

I think the community service part is a good thing and would like to see it happen on the forums, that visibility is what I was commenting on when I suggested PC Venables create a sig. I wasn't demanding all policemen identify themselves whenever they post, only when they post as policemen!

[manxy]

Quite definitely if PC Venables is posting as such I think a sig should be the equivilent of his number on his lapel, a public display of his profession.

 

Sorry Chinanhand but despite having been in the Met I don't think I'll keep up with your insistence that you have to state your profession on here - it's a bit of a drag...[/font]

I think people have really missed the point I was making - I think it is absolutely fine for a policeman to post privately and anonymously on the forum - though I'd definitely advise them to be extremely careful if they post about their work as it risks being prejudicial.

 

I am pretty certain no matter what your position in the MET PK you are not posting on here as a policeman.

 

All I am saying is that it probably does make sense to create a log-in along the lines of "IOM Police" which can then post police press releases as PC Venables did, basic advice on policing matters etc.

 

That log in could be used by any of the various policemen who already post on here, allowing them to not get personally involved and would be the equivilent of the MF beat bobby.

 

It would be more immediate and as its a generic log-in not as likely to generate controversy for the individual policeman.

 

I've said it would have to be managed carefully, but I think it would work better than the current system where policemen are posting but where it isn't clear in what capacity - privately or as a community service.

 

I think the community service part is a good thing and would like to see it happen on the forums, that visibility is what I was commenting on when I suggested PC Venables create a sig. I wasn't demanding all policemen identify themselves whenever they post, only when they post as policemen!

Fair point and concur with that.

I can add that Ramsey Police have a Facebook site and interacts with the public under the heading;

Isle of Man Constabulary Northern Neighbourhood Policing Team

There is no mistaking who's who, but I would say that whilst acting under the role as a PC, they need to be careful with the confidentiality part of things and also to watch their P's & Q's