John Shimmin’s future as a government minister was today discussed at a Council of Ministers meeting.
Eleven months ago the Department of Economic Development Minister offered to fall on his sword if it was discovered that giving loans to the Sefton Group had been inappropriate.
This week Tynwald was told that the loans had been unlawful.
Mr Shimmin immediately offered his resignation to the Chief Minister, but it was rejected.
Today the Council of Ministers held their weekly meeting and the Sefton affair - and Mr Shimmin’s future as a minister - were likely to have been at the top of the agenda.
What was decided or said there is not yet known.
The Chief Minister is due to hold his weekly press conference tomorrow (Friday) and will certainly face questions about the matter then.
During the Tynwald debate about the matter on Tuesday, a backbench MHK who challenged the Sefton bail-out deal from the outset called for Ministers to be surcharged over the loans affair.
Liberal Vannin leader Kate Beecroft suggested Ministers should foot the bill themselves during an emergency Tynwald debate following revelations that a government department acted without legal powers when it agreed loans to bail out the cash-strapped Sefton Group.
The Douglas South MHK, whose questions in the House of Keys first revealed the fact that no legal advice was ever sought for the loans, told the court that surcharging Ministers was an option to be considered.
She said: ‘If we can’t get the money back from the Sefton Group, should they all take their share of repaying? Taxpayers should not be forced to forgo their money because CoMin chose, knowingly, not to have the normal legal opinion expected in this case.’
Mrs Beecroft suggested CoMin had been ‘negligent’ in not seeking alternative legal advice before awarding the loans, given that the acting Attorney General John Quinn was conflicted, having been a former legal counsel to the Sefton Group.
UK barrister Richard Moules, whose independent legal advice was received by government the evening before the Tynwald sitting, concluded that ‘more likely than not’ both the original £450,000 loan made in 2012 and a £1.3m cash loan given the following year were ‘ultra vires – i.e. not lawful’.
He concluded neither loans should have been paid out as the Sefton Group was not an ‘eligible business’ under the Enterprise Act as it was in arrears with tax and had incurred civil penalties. He said government has powers to recover the money, or it could enact legislation to validate the loans retrospectively.
His findings prompted Mr Shimmin to tender his resignation as a government minister. But this was not accepted by Chief Minister Allan Bell, who declined to forward the resignation to the Lieutenant Governor.
But Michael MHK Alfred Cannan, who tabled the emergency motion, said Mr Shimmin’s resignation should be accepted.
He said: ‘We are the law makers, not the law breakers. There is not one law for government and one law for the public. We are not above the law.’
Addressing the Minister, he said: ‘I have no doubt that your intentions may have been honourable, but that is irrelevant. You broke the law.
‘If your resignation is rejected, Tynwald will place itself in the most awkward of positions of essentially validating these loans and opening the floodgates for loans to be made available to any company who is not able to pay their due VAT and NI.’
Mr Bell was off-island on the day of the Tynwald sitting to meet the Prime Minister of China, and a statement on the findings of the independent legal advice was given on his behalf by Treasury Minister Eddie Teare. He said Mr Cannan’s motion was premature as CoMin had yet to give a considered response to Mr Moules’s legal opinion.
Home Affairs Minister Juan Watterson said he was concerned that people ‘wanted a head on a spike’ which he said didn’t actually solve the problem.
Mr Shimmin said after 12 and a half years as a Minister, the decision had been ‘quite straightforward’ to tender his resignation by email to the Chief Minister at 8am on Tuesday. He said he would speak to Mr Bell on his return to find out why his resignation had not been accepted.
He said he believed this was because of the support he had received from the business community.
Mr Shimmin pointed out that the £450,000 first loan had already been repaid, while the Sefton Group was up-to-date with repayments and interest on the £1.3m second loan.
Tynwald unanimously approved a motion as amended by Speaker Steve Rodan, that the court viewed with concern the independent legal advice and the CoMin reports on its response to the July sitting.
Earlier, Mr Teare insisted that appropriate steps were taken before the loans were awarded. He denied the law had been broken, stating that ultra vires means ‘did not have the ability’.
Kate Beecroft told Liberal Vannin’s Facebook followers: ‘I think there is a subtle difference between tendering his resignation and resigning. The former is an offer whereas the second is an action.
‘He should have resigned - end of.
‘The Chief Minister should have accepted his resignation - end of.
‘As it is, Minister Shimmin’s position is unenviable. Everything that he does from now on will be viewed with mistrust by the electorate as well as by Tynwald members.
‘When the committee was formed to investigate this he stated that if they found that “he had acted inappropriately” he would {http://www.iomtoday.co.im/news/isle-of-man-news/minister-will-resign-if-he-acted-inappropriately-1-5869432|“fall on his sword”.}
‘The committee did indeed find that he had acted inappropriately but it would appear that he changed his mind (or maybe the sword looked a bit sharp) as we are now left in this ludicrous situation.’
The editorial comment in today’s Manx Independent called for Mr Shimmin to go.
{http://www.iomtoday.co.im/news/isle-of-man-news/sefton-loans-were-not-lawful-1-6677978|Click here to read our story from earlier in the week}
{http://www.iomtoday.co.im/news/isle-of-man-news/i-took-no-part-in-sefton-bail-out-says-acting-ag-1-5694172|The acting Attorney General, who usually gives legal advice to Tynwald, took no part in the Sefton deal because he was a shareholder and had worked for the company}.