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MP asks Rishi Sunak to intervene in ‘immoral’ case of tower block built by Irish developer

Nama owns loans secured on freehold of troubled tower scheme built by Cork builder John Fleming

British prime minister Rishi Sunak in the House of Commons on Wednesday, where he was asked about an Ipswich development with loans linked to Nama. Photograph: House of Commons/UK Parliament/PA Wire

Mark Paul
Wed Jan 17 2024 - 19:32

Britain’s prime minister, Rishi Sunak, says he will examine a case involving a high-rise tower in Ipswich built by Cork developer John Fleming, after a local MP complained the National Asset Management Agency (Nama) had “run away” with cash for repairs.

Tom Hunt, the Conservative Party MP for the area, told the House of Commons on Wednesday that the owners of 249 flats at The Mill development, which has been beset by structural and planning problems, have been left in the “cruellest form of limbo”.

They say they are unable to sell their “worthless” leasehold flats due to the poor state of the building. Nama effectively controls the freehold through about £35 million (€40 million) of boomtime AIB loans secured on the property.

Administrators appointed after Mr Fleming went bust during the property crash in 2010 had in recent years secured a £15 million legal settlement payout from contractors, after cladding was ripped from the tower in a storm more than a decade ago.

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Residents had hoped the cash could be used to fix the building, which has also had fire hazard problems. However, much of the settlement has been paid over to Nama.

[ Firm connected with ex-developer John Fleming working on £50m London deal ]

Mr Hunt suggested to MPs that Nama had “run away” with the £15 million, “putting my constituents back to square one with little or no hope”. He said the case was “immoral”, and urged Mr Sunak to raise the situation with Taoiseach Leo Varadkar.

Nama, however, says it received just £7.9 million of the payout, and highlighted that it had “no role” in the construction or maintenance of the property. It said that since receiving its payout, it has walked away from the property.

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Administration documents for Wharfside Regeneration (Ipswich), the Fleming-linked UK company that originally built The Mill, show that almost half of the £15 million compensation payout was spent by the administrators on various expenses linked to the legal claim.

The administrator, RSM, received a fee of £514,000 relating to the legal claim against the contractor. A further £2.2 million of the cash was spent on legal fees and expenses, £1 million on “works”, £1 million on insurance and more than £300,000 on surveyors’ costs.

RSM said a bidder had been interested in the freehold and Nama had been willing to allow some of the £15 million to be used to pay for works to smooth a deal. But after the bidder walked away, Nama sought a payout.

[ Builder puts up €5m assets for rescue plan ]

Nama had received a previous payout of £4 million, which suggests that after the latest £7.9 million, Irish taxpayers were left with a £22 million shortfall on Mr Fleming’s original AIB loans.

The developer, who built the Celtic Tiger-era Fota resort in Cork, went bankrupt in the UK in the crash and has subsequently re-emerged as a builder of modular homes.

Mark Paul

Mark Paul

Mark Paul is London Correspondent for The Irish Times

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