Minister has interest in £750k rent deal
Monday 13th June 2011, 2:30PM BST.
Inside the MSG’s Mill House, looking down to Alexandra House.
HEALTH minister Hunter Adam stands to benefit financially from taxpayers’ money being paid through a States’ contract which his department helps to negotiate.
Deputy Adam and his wife, Katherine, have shares in two property companies, from one of which, Vignon, the Medical Specialist Group leases its premises.
An independent report which found that the MSG did not provide value for money recently revealed that the consultant-only service paid around £750,000 in rent last year.
The former obstetrician said that his role as minister and as a shareholder in a company which received public funds did not represent a conflict of interests.
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This appears to be a non-story. Deputy Adam declared something that he wasn’t even required to declare (a sub-10% shareholding interest). Hardly an act of a man trying to hide anything.
What exactly has he done wrong ? The MSG would be paying a market rate of rent to somebody even if it was to a company with which Deputy Adam was not connected.
Am I missing something ?
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On the face of it this does seem a bit whiffy, surely a potential conflict of interests? Aren’t there two main issues here: 1/ Is it sensible for the MSG to operate out of leased premises at all? 2/ Is the rent at the market rate? I believe commercial rents tend to be somewhere around 4% of resale value, if so that values the property at around £19M. Would somebody with experience in this field care to offer a qualified opinion?
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Beanjar
1) If the MSG partners don’t have a spare £19m (if that’s the corect figure) to buy the property itself, or if the practice itself doesn’t want to borrow the money in question, then there’s nothing at all “whiffy” about renting rather than buying. Many businesses choose to rent rather than buy their premises.
2) I’m not sure how many square feet the MSG building is, but £700k per annum rent seems very high indeed. Let’s assume its 15,000 square feet (I have no idea how big it is) – that would be £46 per square foot compared with prime office space in prime town or Admiral’s Park location which would be around two-thirds of that figure. Without knowing the size its impossible to evaluate that.
A high rent might of course be a way of suppressing the MSG’s profits to enable them to justify a higher contractual fee from the States, which would mean (in effect) that it would be taxpayers’ money rather than the MSG partners’ money which is being paid to the company which owns the site.
Or is that just me being cynical ?
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@Beanjar
Doesn’t exactly come up smelling of roses on the surface, agreed, but, on the practical side, MSG seems to be a moveable feast, some consultants stay, some don’t, there are numerous stand in locums, in between.
Deputy Adam, having arrived on our Island sometime in the late 70′s, was won’t to say that he felt he was far too qualified to be here… he appears to have recognised his true niche though and seems he is doing very well out of his foresight.
Since he had registered his business interests as a SOG rep, I can’t see that he has any questions to answer, do hope though that he will not take to the media to confirm same, since I find him very difficult to understand.
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This is happening everywhere in the world.
Politicians should not be able to in a position of power by law if their private activities have anyway of benefitting from the decisions made by the political surroundings they immerse themselve in.
Just simple Ethics really !
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There is an issue here, even if only morally, when you are involved in dealing with parties in which you have an invested interest. It is going to look like a conflict of interest whatever the circumstances genuine or not. Simple answer is not to be involved in the process. Sorry but in politics you have to be seen to be whiter than white that is the price you have to pay. If you are not prepared to act in this way then you should not be doing the job. Seems these days politicians lack common sense and with so many wrong doings in politics the public are suspicious of every situation rightly or wrongly.
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So what? Surely this can come as no surprise to anyone.
Logic suggests that the original partners of MSG would probably have been shareholders of the property-holding company that acquired the premises and which the Adams’ are reportedly shareholders of.
Presumably that company leases the premises to the current partners of MSG or a company they are shareholders of.
Sounds like a normal business transaction to me and if Hunter Adam has declared a minority interest, is there really an issue here?
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