Tuesday 1 September 2020

New Regeneration Director signs off variation to Bridge Park land deal with GMH

Brent Council announced via its website today that Alan Lunt, the new Strategic Director for Regeneration and Environment,  has signed of an agreement to exchange a Deed of Variation for the land sale of Bridge Park ahead of the announcement of the High Court judgment on Brent Council vs Bridge Park which is due this month.

The Officer Key Decision Form reads
 Agreement to exchange a Deed of Variation to the Bridge Park Conditional Land Sale Agreement with “Stonebridge Real Estate Development” a UK-registered subsidiary company that has General Mediterranean Holdings SA as the parent company and Harborough InvestInc as the second guarantor.
The Decision Form states that Shama Tatler. Cabinet Member for  Property, Planning and Regeneration was consulted.

If you are wondering what the variation is, then hard luck. Brent has 'fully' exempted the Report from publication:

The Council states that exemption is  'By virtue of paragraph(s) 3, 5 of Part 1 of Schedule 12A of the Local Government Act 1972.'

Back in 2015 when the Cabinet approved the initial move to do a deal with General Mediterranean Holdings, the then Chair of Scrutiny, Cllr Dan Filson, raised warned about doing a deal with a 'convicted fraudster'  LINK.  On the Wembley Matters report on the matter Filson made the following additional comment:
I must say I was surprised that whilst mentioning the two companies involved were neither incorporated nor registered in the UK, the Cabinet paper did not mention that they were registered in tax havens namely Luxembourg and the BVI, nor that the leading shareholder in the holding company was a convicted fraudster. A quick Google search revealed this.

Possibly the council officers preparing the report felt these issues did not matter given the safeguarding phrase that the decision of Cabinet would be subject to meeting financial scrutiny (quite how these financial checks would succeed given that they had not succeeded in the months leading up to Cabinet was not made clear!).

The wider issue of the ethics of dealing with tax haven companies wasn't touched upon at all nor the fraudster angle. I understand Councillor Pavey's position that it needs government action to deal with tax haven companies (to say nothing of persons being company directors of overseas companies who, by my book, should be disqualified from holding any positions of trust in any company trading or owning land in this country).

However Brent can have its own policies; but what should they be here? The land south of the North Circular Road at Stonebridge Park has been a derelict eyesore for a couple of decades. Brent can engineer development here by intervention using such land as it has as a bargaining tool. If we take the ethical route and don't treat with tax haven companies will we get better or worse terms from other companies? Conceivably could Councillors be surcharged for not getting "best value" in a deal? Will any action happen on this site at all for another decade?

I don't know how I would respond on these issues. My disappointment was that no attempt has been made to address them before this particular decision came to Cabinet despite the identity of these 2 companies being known for some time, years even. So the Cabinet was obliged to agree to a deal involving these two companies without a financial appraisal in front if it and without a stated policy on dealing with tax haven companies. It leaves an unpleasant taste.

In another comment Philip Grant wrote:
I sent my comment of 29 July at 19:59, asking whether it is ethical for Brent Council to be dealing with a company in a tax haven, to Cllr. Michael Pavey, the Deputy Leader who chaired the Cabinet meeting on Monday 27 July. Unlike some of his colleagues, Cllr. Pavey is willing to engage in dialogue, and (with his permission) here is his reply:
‘The article on Wembley Matters doesn't give a full account of the discussion. Cllr Filson made a series of excellent points. I imagine you've read the Cabinet report, so you'll know that section 4.6 states that "Finalisation of negotiations and entering into Heads of Terms with these companies will be subject to soconfirmation of satisfactory financial standing."

At the Cabinet meeting I sought specific legal advice on whether this point provided sufficient protection against the concerns raised by Cllr Filson. The legal representative stated that in his view, it did. Myself and my colleagues certainly had concerns on this front, but the legal advice was categorical. We will certainly keep an eye on this moving forward.

Martin quotes Andy Donald's somewhat derogatory comments about the decision makers not reading the papers. I certainly always read every single page of Cabinet papers and I know colleagues also prepare comprehensively. We have discussed Bridge Park in detail on many occasions and had a full discussion on Monday evening about issues such as trying to limit foreign ownership of the flats, the proportion of affordable housing and the sustainability of the new leisure centre.

I take your point on ethics and I for one am not comfortable dealing with companies registered in tax havens. Realistically though this is a much wider issue than this development. When you have companies like Starbucks, Amazon and Next routinely avoiding tax, it becomes difficult to hold this against any single company. We need national Government to lead a crackdown on legal tax avoidance and to insist on clearer transparency requirements. I don’t like dealing with companies registered in tax havens, but considering the size of the problem, I think the solution must come from the Government.’
It would help us have some faith in the process of this very controversial land sale if information was available to press and public and even more so to councillors.  The decision could be called-in - it is another test of our councillors to see if they have the courage to do so.


Philip Grant said...

The Companies House records for Stonebridge Real Estate Development Ltd show that this company purchased an investment property for £30 million in 2019.

This appears to have been paid for with money from its ultimate parent company, General Mediterranean Holdings SA SPF, registered in Luxembourg, and Harborough Invest Inc.

The immediate holding company of Stonebridge Real Estate Development Ltd is General Mediterranean Holdings (UK) Ltd. Companies House records show that Sir Nadhmi Auchi ceased to be a director of this company in June 2020, but the person now shown to control it is his wife, Lady Ibtisam Auchi, and two of their adult children are directors of the company.

Nadhmi Auchi is a British/Iraqi businessman and philanthropist, said to be worth £1.182 billion by the 2020 Sunday Times Rich List.

He does not appear to have been awarded a knighthood in the UK (please correct me if I am wrong on that), but seems to use the title "Sir", and his wife the title "Lady", from an award by a small Caribbean country. His wikipedia entry says:
'On 13 November 2014, Auchi was appointed a Knight Commander of the Most Distinguished Order of the Nation (KCN) of Antigua and Barbuda. This knighthood was later removed by the Governor General of Antigua following accusations around the circumstances in which it was given [citation needed].

I hope that Brent Council know who they are dealing with.

Anonymous said...

Cash for honours???

Emma Tait said...

Interesting to see in the current issue of 'Your Brent' (Autumn 2020), an article 'Backing the black community', states the council has agreed a plan that sets out actions to develop community spaces that will be run and managed by members of the black community. Am not too optimistic judging by how Bridge Park is being treated by Brent Council.