Inquiry reveals ghost-buyers and missing millions
Documents released by a public inquiry into council property sales in Hackney, East London, show that millions of pounds appear to have gone missing. Officials do not know how much has been paid for 42 properties including shops, houses, land - a school, a former library and an old morgue.
Hackney council has suspended sales while the investigation continues. Last night the inquiry chairman, Cllr Jim Cannon (Lab), told property department officials they had one week to try to track down the money. The inquiry also wants to know the identities of 113 unknown buyers.
“Council officers will give us information next week, explaining how things work, or don’t work”, said Cllr Cannon.
The massive sell-off was ordered by the Government in 2000 because the the council faced financial collapse after years of mismanagement. The sales aimed to raise more than £200 million. It is still not clear how much they actually raised: the figure is put at between £50 and £70 million. The City property agents Nelson Bakewell were hired to handle the sales.
Two earlier internal inquiries and a police investigation found no evidence of impropriety. However Scotland Yard reopened its investigation last month (Jan). And earlier this month the Labour-controlled council agreed to a Conservative motion to investigate the sell-off.
At its first public meeting in Hackney Town Hall last night (Mon Feb 27) the new inquiry was told that the gaps were due to “difficulties with records” in the planning department. Because of that, it is expected that inquiry members will want to check the records of Nelson Bakewell and its successor as the council’s agents, Savills.
The gaps show up in the council’s list of “property disposals, 1999 to date”, released by the inquiry. Among potentially more expensive items is the sale of property in De Beauvoir Crescent and Hertford Road N1. Officials appear to have no record of how much it was sold for, when it was sold, or who bought it: neighbouring property in Hertford Road was sold some time in 2003 for £4,125,971.
Mystery surrounds the sale of “Redruth former library” in expensive Victoria Park - the council doesn’t know who bought it, when and for how much - Woodberry Down primary school N4, and “Wren’s Park morgue site”: the cash that presumably went with the morgue has passed into the unknown.
Cllr Andrew Boff (Con), a member of the inquiry team, said sales were being suspended because there was concern that mistakes were still being made. Until now, the Labour-controlled council has insisted that any mistakes were in the past, blamed on breakdowns in liaison between property department officials Nelson Bakewell. However the property disposals list shows that discrepancies continue to occur. For example the identity of the buyer of a £175,000 property in Forest Road E8, sold by Savills on January 10 this year, remains a mystery. And no one appears to know who paid more than £1 million last year for property in Greenwood Road E8.
Hackney Council launched the new inquiry after protests over the sale of Spirit’s iconic Nutritious Food Galley in Broadway Market and Tony Platia’s much-loved Francesca’s Cafe. Both have given evidence in court that they were not given a fair opportunity to buy the property they were leasing.
Tony, who has been evicted by the property developer Roger Wratten, told the inquiry last night that his livelihood was destroyed because he subsequently faced a demand for £22,500 in rent arrears which he could not afford to pay. He said Hackney property officials had not told him how much it would cost to buy the premises. The records show the café was sold to Roger Wratten for £186,000 in 1983.
Tony told the inquiry: “They took it from a poor man and gave it to a rich man”.
Members of the inquiry team are considering calling Roger Wratten to give evidence.
Spirit told the inquiry he was given less than 28 days to raise £100,000 to buy his shop at 34 Broadway Market. He raised a £10,000 deposit which he gave to the auctioneers, Nelson Bakewell - only to find his shop was sold in auction for only £65,000 the same day. His cheque was subsequently returned with no explanation.
The new landlords, Broadway Investments Hackney Ltd, are demanding £30,000 in back rent. The case is still going through the courts.
Arthur Shuter, who represents both men as well the tenants of 14 shops and houses in Dalston Lane which were sold to a private developer, told the inquiry: “They (Hackney Council) were effectively selling off public property privately. They sold half of Hackney for nothing.” Many of the properties were “grossly undervalued”, he said.
The inquiry continues in public at Hackney Town Hall on Monday, March 6. It will end later next month when the council is dissolved for the local elections. It will be up to the next council to decide whether to continue the investigation.
© Andrew Veitch Associates.
Hackney council has suspended sales while the investigation continues. Last night the inquiry chairman, Cllr Jim Cannon (Lab), told property department officials they had one week to try to track down the money. The inquiry also wants to know the identities of 113 unknown buyers.
“Council officers will give us information next week, explaining how things work, or don’t work”, said Cllr Cannon.
The massive sell-off was ordered by the Government in 2000 because the the council faced financial collapse after years of mismanagement. The sales aimed to raise more than £200 million. It is still not clear how much they actually raised: the figure is put at between £50 and £70 million. The City property agents Nelson Bakewell were hired to handle the sales.
Two earlier internal inquiries and a police investigation found no evidence of impropriety. However Scotland Yard reopened its investigation last month (Jan). And earlier this month the Labour-controlled council agreed to a Conservative motion to investigate the sell-off.
At its first public meeting in Hackney Town Hall last night (Mon Feb 27) the new inquiry was told that the gaps were due to “difficulties with records” in the planning department. Because of that, it is expected that inquiry members will want to check the records of Nelson Bakewell and its successor as the council’s agents, Savills.
The gaps show up in the council’s list of “property disposals, 1999 to date”, released by the inquiry. Among potentially more expensive items is the sale of property in De Beauvoir Crescent and Hertford Road N1. Officials appear to have no record of how much it was sold for, when it was sold, or who bought it: neighbouring property in Hertford Road was sold some time in 2003 for £4,125,971.
Mystery surrounds the sale of “Redruth former library” in expensive Victoria Park - the council doesn’t know who bought it, when and for how much - Woodberry Down primary school N4, and “Wren’s Park morgue site”: the cash that presumably went with the morgue has passed into the unknown.
Cllr Andrew Boff (Con), a member of the inquiry team, said sales were being suspended because there was concern that mistakes were still being made. Until now, the Labour-controlled council has insisted that any mistakes were in the past, blamed on breakdowns in liaison between property department officials Nelson Bakewell. However the property disposals list shows that discrepancies continue to occur. For example the identity of the buyer of a £175,000 property in Forest Road E8, sold by Savills on January 10 this year, remains a mystery. And no one appears to know who paid more than £1 million last year for property in Greenwood Road E8.
Hackney Council launched the new inquiry after protests over the sale of Spirit’s iconic Nutritious Food Galley in Broadway Market and Tony Platia’s much-loved Francesca’s Cafe. Both have given evidence in court that they were not given a fair opportunity to buy the property they were leasing.
Tony, who has been evicted by the property developer Roger Wratten, told the inquiry last night that his livelihood was destroyed because he subsequently faced a demand for £22,500 in rent arrears which he could not afford to pay. He said Hackney property officials had not told him how much it would cost to buy the premises. The records show the café was sold to Roger Wratten for £186,000 in 1983.
Tony told the inquiry: “They took it from a poor man and gave it to a rich man”.
Members of the inquiry team are considering calling Roger Wratten to give evidence.
Spirit told the inquiry he was given less than 28 days to raise £100,000 to buy his shop at 34 Broadway Market. He raised a £10,000 deposit which he gave to the auctioneers, Nelson Bakewell - only to find his shop was sold in auction for only £65,000 the same day. His cheque was subsequently returned with no explanation.
The new landlords, Broadway Investments Hackney Ltd, are demanding £30,000 in back rent. The case is still going through the courts.
Arthur Shuter, who represents both men as well the tenants of 14 shops and houses in Dalston Lane which were sold to a private developer, told the inquiry: “They (Hackney Council) were effectively selling off public property privately. They sold half of Hackney for nothing.” Many of the properties were “grossly undervalued”, he said.
The inquiry continues in public at Hackney Town Hall on Monday, March 6. It will end later next month when the council is dissolved for the local elections. It will be up to the next council to decide whether to continue the investigation.
© Andrew Veitch Associates.
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