‘The pricing was agreed by two gentlemen sitting in a room’
The loans were approved last year(Image: Renaker/SimpsonHaugh)
Andy Burnham has been accused of allowing £140m of public money to be loaned to a developer with ‘no lawful or proper process’.
The Greater Manchester Combined Authority (GMCA) denies the claims about the loans handed to Renaker, the developer behind many of the city’s luxury skyscrapers. But a court heard today (May 27) that the decision-making process was ‘flawed’ and ‘unlawful’.
The case brought to the Competition Appeal Tribunal is the latest legal challenge from Manchester property developer Aubrey Weis.
The Weis Group owner claims that GMCA created an ‘unlevel playing field’ by giving Renaker lower rates of interest on two loans.
Representing Mr Weis, Joseph Barrett KC told the court that the pricing of the loans, which were approved by the GMCA last March at a meeting Mr Burnham chairs, was agreed ‘by two gentlemen sitting in a room’ a month earlier with ‘no lawful or proper process’.
The loans in question relate to two Renaker developments – Trinity and Jackson, the second of which is also known as Contour.
Contour was one of the developments involved(Image: Copyright Unknown)
Originally worth around £140m, the final value of the loans which were signed off by the GMCA last November was around £120m.
Mr Barrett told the court that the GMCA later provided a justification for the interest rate that was agreed which was 7.8 per cent.
However, he argued this calculation was based on an analysis of another company owned by Renaker owner Daren Whittaker which has since been dissolved, and if it was applied correctly to the companies receiving the loans, the rate should have been 10.8 per cent.
The GMCA has denied the allegations, claiming that the interest rates were determined by a ‘detailed decision making process’.
But speaking in court about the loans for the Trinity and Jackson schemes, Mr Barrett said: “That is not what happened in this case.
“The pricing was agreed by two gentlemen sitting in a room and there was no lawful or proper process in relation to that critical element.”
He added: “When one considers the evidence, what it demonstrates is a small group of officers who have become objectively too relaxed in the manner in which they deal with Mr Daren Whittaker. And in this case, I do say this has come at the cost of maintaining a proper, transparent, lawful, decision-making process in a matter of significant public interest, loans involving £120m of public money.”
A GMCA spokesperson said: “We refute any suggestion that the loans from the Housing Investment Loans Fund have been given at less than market rate or on preferential terms and we are confident in the case we will be making at the Competition Appeal Tribunal.”