Who watches the watchers

As yet my email remains unanswered however tonight, 31/10/2013, spookily the Chief Executive, Dr Sue, (she was finance officer in 2009 and in charge of "due diligence" partially answered some of the points.

It seems that for those of us who follow the finer points of this saga they will know that part of the evidence said to prove the finances were in place to build (?) the flats and hotel was a letter from SFP Services ltd stating Wetmore were prepared to fund the hotel build to the tune of £5M.

Now questions being asked today wonder whether TDC ever checked the veracity of this letter and when asked by the T&F the same question Dr. Sue said yes but this was done by "External Solicitors"

Wow where is this report and why wasn't it part of the appendixes attached to the 2009 agreement?

Tonight we found out, it seems TDC's solicitor Eversheds were asked to write to SFP's solicitor (Prettys of Ipswich) to ask them to confirm the offer from Wetmore was genuine, that there was a valid agreement and that the finances were available.

No I don't know whether I'm cynical or not but considering Wetmore Foundation is 100% owned by Colin Hill, Shaun Keegan's son in Law I bet you can guess Wetmore were given a clean bill of health

Smoke & mirrors

New information has been given by the TDC Chief Executive concerning the 2009 agreement which has opened a can of worms over the openness or otherwise of information given to the Task & Finish Panel.

my new email to Harvey Patterson (under a freedom of Information request) follows:

The Task & Finish Panel have recently asked a series of questions to Dr. Sue McGonical which have now been published on the TDC website as an appendix to the upcoming meeting on the 31^st October 2013. As the answers are in the public domain I would like to raise some questions under an FOIA.

Also, I believe, you stated at a previous meeting of the T&F you said that a full disclosure of all papers was not an issue as only current negotiations would remain confidential. Is that still the case?

Both Ian Driver and Richard Nicholson asked broadly the same question as follows:-

Letter from SFP Ventures UK Ltd dated 2 June 2009 page 27: This letter states that Wetmore Investments will be funding the construction of the hotel through a £5million  investment.  What  checks  did  the  Council make  into  the  validity  of  this  claim  e.g.  obtaining copies  of  development  agreements  with  SFP,  and what  steps  did  the  council  take  to  check  the  bonafides  of  Wetmore  Investments  e.g.  securing information  about  company  registration  and ownership of Wetmore Investments and copies of its accounts.  Was  Wetmore  Investment  ever  contacted by the council?

Dr. Sue’s answer

External solicitors were used to validate the ability of Wetmore to provide the agreed level of finance, and that a binding legal agreement was in existence.

Having investigated both SFP and TDC over this affair for many months and accumulated much written evidence Dr. Sue’s answer comes like a bolt out of the blue and raises more questions than answers.

In the interest of openness please would you answer the following:-

1.       Who were the External Solicitors?

2.       Who instructed them and the date they were formally engaged?

3.       What was their brief?

4.       Was their final report to Council Verbal or written?

5.       Where is this report?

6.       Why wasn’t it included in the Pleasurama file given to the members of the T&F panel?

7.       Who are Wetmore?

8.       Where are they based?

9.       What was their financial standing?

10.   How long was the offer of £5M available for?

11.   Who owns Wetmore?

12.   How much was the Solicitor Invoice for?

13.   When was it paid?

14.   Who authorised payment?

15.   Why weren’t the findings part of the appendixes to the 2009 agreement?

   Harvey did state all relevant evidence would be given to the panel members so it does seem likely he is unaware of this External Solicitor report else he would have furnished to all members but then it is also likely smoke & mirrors are being deployed.

Task & Finish Committee & Rumours

At the recent committee meeting various decisions were made summarised here.

Summary follows:-

Minutes:

It was AGREED:

1.  THAT the S. 151 Officer be invited to attend the next meeting of the Group in order to answer questions; (be interesting having Sue answering questions)

2.  THAT that meeting takes place in 4 to 5 weeks’ time;

3.  THAT the Chairman emails Group Members as soon as possible, requesting that questions to be put to the S.151 Officer be submitted to him within 2 weeks of the date of his email;

4.  THAT, when responding to the Chairman’s email, Group Members select,“Reply All”;

5.  THAT the Chairman collates all Members’ questions and forwards them to the S.151 Officer as soon as possible after the 2-week period has expired.

6.  THAT assurance be given at the next meeting of the Group that legal advice is under way. (what questions will the lawyers be asked)

7.  THAT the Group considers inviting evidence in private session from a representative of the Friends of Ramsgate Seafront; (Is this just a pipe dream)

8.  THAT the Group considers seeking evidence from Members of Cabinet at the time the Development Agreement and Deed of Variation were entered into and also the former Director of Regeneration Services; (does anyone think the likes of Ezekiel and Latchford will be forthcoming?)

9.  THAT the Group consults with residents on any future options for the Pleasurama site. (got to get SFP removed first)

And so to rumours that building work will restart sometime soon being touted by various councillors. Interesting time of year to restart owing to the inclement winter weather but then it would make a built in excuse to ask for the extension until 2017

Vindication

After last night’s “Task & Finish” Sub-committee meeting  (29/8/2013) all the time and effort put in by myself and other researchers bore fruit and legal advice is being sought urgently to decide if there is a case for Shaun Keegan, aka the developer, having the development contract terminated.

For those that have not been following this saga the T & F committee, at their meeting on the 18^th July 2013, asked the Council Legal adviser, Harvey Patterson, to produce all documents pertaining to Pleasurama dating back to 2002 focusing on the Council’s “Due Diligence” procedures.

For those that have been regular readers of this blog will know this exercise was very poorly done!!

At last night’s meeting Harvey produced a document and presented it to the members and eventually to the public, outlining 2 main aims:

       A definition of due diligence (and why it is needed)

          Information about the “due diligence actually carried out.

Taking point 2 first he stated “SFP Ventures (UK) Ltd is a “shell” (my word he uses single/special purpose venture) company .... it had little or NO CASH or ASSETS .... nor a track record of development”

He goes on to state “there is no evidence of ANY financial “due diligence” being undertaken prior to the development agreement being entered into in 2006”.

So to clarify a shell company with no track record or financial assets is allowed to enter into an agreement with TDC for a development that would be costing over £20M. No wonder the opinion of the committee was overwhelmingly incredulous when they heard this.

Both officers and Councillors have a lot to answer for in allowing TDC to get duped.

Now going back to point one Harvey states “due diligence is a voluntary act where the amount of diligent enquiry contemplated or undertaken will depend on what is at stake to the enquirer. In other words the higher the risk to the inquirer, the more intrusive and thorough the “due diligence” can be expected to be”

In other words because NO “due diligence” was carried out, nor was it even attempted, then the conclusion  has to be there was NO risk to TDC. Well TDC the lost opportunities of a derelict site cannot have escaped your notice over the last 11 years.

Now I will turn my attention to the “alleged due diligence” carried out by officers prior to the Development Agreement being varied in 2009.

This very limited exercise was carried out during 2009 and only looked at the funding arrangements for the build. It comprises the following documents (the originals are now available from the TDC website)

1.       A business reference (undated) for Cardy Construction ltd (hardly proof of funding).

2.       Letter from Cardy to Shaun Keegan (dated2/6/2009) confirming they are willing to invest £1.5M in the project.

3.       Letter from Keegan (also dated 2/6/2009) stating they have spent £2M to date. (not sure how he arrives at this figure (their accounts show spend of only £1.6M) and not sure how he knew of Cardy’s letter as it would have been in the postal system at the time).

4.       Letter from SBP Banque to Brian White (dated 16/9/2008) stating the funding for the £1M deposit was in Geneva and was funded by SFP Services. (not relevant to the development funding issue but enlightening as to who is funding the project).

5.       This last is so laughable as to be untrue. A letter purporting to be from SBP Banque to Brian White that states “DRAFT LETTER FROM SBP BANQUE TO TDC” “Dear Sirs, This letter is to confirm that our client WETMORE INVESTMENTS has funds deposited with the bank to facilitate immediate funding of £5M for the hotel and commercial elements of the Royal Sands Development at Ramsgate, Kent.”

So to clarify, and despite the picture painted by Brian White and Harvey Patterson (the authors of Annex 4), SFP can only point to £1.6M invested to date and a promise from Cardy that they will contribute £1.5M to the project. The rest was just empty promises so it was hardly surprising the conclusion reached by the officers in Annex 4 was there was insufficient proof of funding and the development should be TERMINATED immediately (2009).

2 questions immediately spring to mind

1.       Why didn’t “shagpile” take notice of his officers and terminate?

2.       How much money has been lost because the agreement wasn’t terminated?

So the lack of due diligence is going to lead (probably) to a high cost Court Battle to retrieve the site leases granted to SFP Ventures (UK) Ltd or a deal will be struck with Keegan and his cronies reimbursing them for out of pocket expenses and compensation for the loss of the leases. This is likely to exceed £8M a figure that Peterborough Council coughed up when they took on Keegan between 2003 and 2010.

So TDC your words come back to haunt you-

“due diligence is a voluntary act where the amount of diligent enquiry contemplated or undertaken will depend on what is at stake to the enquirer. In other words the higher the risk to the inquirer, the more intrusive and thorough the “due diligence” can be expected to be”

Who does SFP Ventures (UK) Ltd protect

“The aim of the Money Laundering Regulations 2007 (the Regulations) is to detect, deter and disrupt financial crime and terrorist financing by reducing the possibility of legitimate businesses being used for money laundering or terrorist financing.”  From The Office of Fair Trading website. 

The whole point of adhering to this and the Proceeds of Crime Act is not to say that criminal activity IS taking place it is to DETER it, however if information comes forward at a later stage, then identifying what has transpired becomes easier for the Authorities.

What transpired within the Pleasurama debacle between Thanet Council and Shaun Keegan is a case in point and best explained using the “Horse and Cart” analogy. I have correspondence from TDC that indicates that they are dealing only with a UK based and registered Ltd Company, that much is true, however that is not the entire truth and the order of events and why they occurred is important in understanding what transpired.

 December 2002 Terry Painter stated “Shaun Keegan is the Project Manager of SFP Venture Partners (an overseas company)”, the beneficial ownership of this company wasn’t known at the time and only came to light in September 2008.

2008 “SFP Venture Partners is owned 100% by SFP Services”. This company is registered in Geneva and the general manager is Colin Hill. Who the ultimate beneficial owner is remains unclear. This company had the £1M that was paid through SFP Ventures (UK) Ltd so has to be connected.

In 2006, prior to the 1^st agreement being signed, Shaun Keegan incorporated SFP Ventures (UK) Ltd. The effect of this greatly helped TDC in their dealings with Shaun Keegan as it does several things. 

Firstly it allowed TDC to say they were dealing with a properly constituted legal entity registered in the United Kingdom, something that up to then garnered a great deal of criticism from the public. 

Secondly it enabled them to do some “due diligence” which was extremely difficult with a company registered overseas. 

Thirdly Shaun Keegan would normally have had to identify himself especially as he is the figurehead for the developers; the incorporation of a UK company has allowed the focus to be placed on the UK Company alone. A search of the Electoral Records for the UK has him on the voters list in Essex up to 2002 then he disappears.

In view of the monies being channeled through the UK registered Company in 2009 from SFP Services in Geneva one wonders just why it mattered to either Shaun Keegan or the Council to have a UK registered company as Keegan could just as easily have set up another Geneva based company to develop Pleasurama and it makes you wonder on whose behalf the UK based company was set up. 

Why identify the party you are dealing with:

The Home Office estimates that serious organised crime in the UK generates approximately £20 billion a year. Purchasing property in the UK and overseas continues to be a common method used by serious organised criminals to launder the proceeds of criminal activity. The advantage of doing so is that large amounts of criminal funds can be ‘cleaned’ in a single transaction.

 This equally applies to Estate agents and Councils selling Freehold/Leasehold Property or Freehold/Leasehold Land. 

What to look for (or what not to do)

Knowing your customer 

By exercising due diligence in taking steps to inspect and verify client identity documents, you may
identify anomalies.
Examples include:
•  Use of false documentation
•  Reluctance to provide personal details
•  Doubts about the source of client funds
•  Refusal to provide the requisite proof of identification or residence
•  Inconsistencies in documentation such as anomalies in dates photographs or signatures

Due Diligence - what does this mean?

In December 2002 Terry Painter promoted (on his Estate Agency notepaper) Shaun Patrick Keegan who he said represented SFP Venture Partners (registered overseas). In 2006, to make TDC's Due Diligence easier on the eye, Shaun Patrick Keegan set up a shell company SFP Ventures (UK) Ltd (registered at Companies House)
This latest company generates no money itself and will only make money should Royal Sands be built and sold, so any money directed through it must come from the mysterious backer(s) who want to make money out of the site's development.

As stated before Shaun Patrick Keegan has never been formally identified through documents such as passport or driving license so when Alan Poole stood up on Monday 8th July 2013 and said a proper due diligence would now take place I was pleased.

How wrong was I!!!!

My email to Alan Poole:

Having read your recent answers from Monday night I note you are still in the process of doing “due diligence” on the recent offer from SFP.

Can you confirm that during this process TDC will make the effort to finally get Shaun Patrick Keegan to provide documentary evidence (passport or driving licence) of his identity. At the same time asking him to provide evidence of residence, something that Harvey Patterson confirmed had never been done in the 10 years of his role in the Pleasurama fiasco.

 
His reply:

Essentially our dealings are with a company (SFP) and their financial position…. not an individual (although we do have to deal with this individual).

The role of due diligence is not to check people's driving licences but mainly to ensure that the development stacks up from a development appraisal point of view (and we are doing specific work with SFP on this at the moment), and secondly that the funding is coming from a legitimate source.

We already have an agreement with SFP who are a legitimate registered company which was set up to specifically to deliver this development.

I hope this answers your questions………..

Well Alan it certainly doesn't. When and if you have to go to court where will your solicitor  serve papers? His Accountants address (that is the registered company address) The British Virgin Islands? Geneva?