• Tchenguiz PR man named in Commons

• ‘Apology’ by obscure website to Vincent Tchenguiz read to MPs

• Sir Peter asks what was Tchenguiz’s role during the Peverel / Cirrus price fixing scandal?

• Tchenguiz freehold valuations questioned

• Why are huge loans issued against valuations ‘created from thin air’?

• Government should put pressure on professional standards bodies to ‘terrify life’ out of those assisting dubious practices

David Leslie and PR boss David Burnside, of New Century Media, which is employed by Vincent Tchenguiz. Leslie’s email to Sir Peter Bottomley resulted in Tchenguiz’s leasehold interests coming to the attention of the Commons

An initiative by Vincent Tchenguiz’s PR company New Century Media spectacularly misfired last night with junior PR man David Leslie being named in the Commons and his client’s leasehold activities coming under scrutiny.

Just after 9pm, Sir Peter Bottomley made the last intervention in the debate on the Queen’s Speech to discuss Tchenguiz’s involvement in leasehold.

He referred to leaseholders “who in many ways have been brutally abused, financially challenged and often intimidated”.

He questioned Tchenguiz’s involvement in retirement leasehold management, referring to the OFT finding into the collusive tendering scandal by Peverel / Cirrus.

He demanded answers to the over-valuation of freeholds acting as security to huge loans

Reading his reply to Leslie, he asked: “Has your client ever made an apology on any leasehold issue or action?”

Sir Peter left the house in no doubt that the leasehold interests of Tchenguiz would be coming under further public scrutiny.

Tchenguiz and his brother Robert are claiming £300 million off taxpayers owing to their arrest on wrong evidence by the Serious Fraud Office in February 2011. The case, scheduled for three months, begins in October.

The debate was prompted by an email from Leslie to Sir Peter yesterday afternoon including a copy of an apology to Tchenguiz by an obscure website “Over 50s Housing UK” . Link here

Leslie, aged 25, works for New Century Media, the PR company owned by former Ulster Unionist MP David Burnside, a pugnacious PR veteran who was employed by British Airways at the time of its controversies with Virgin in the 1990s.

The apology stated Tchenguiz had “no knowledge of or involvement in any collusive tendering. We also accept that we have no basis for the claim that Mr Tchenguiz subjected Peverel residents to ‘constant financial clipping.’ We apologise to Mr Tchenguiz for the distress and embarrassment caused.”

Leslie pointed out that Sebastian O’Kelly, of Campaign against retirement leasehold exploitation, had contacted Sir Peter last December over a Tchenguiz-owned site. He did not indicate that Campaign against retirement leasehold exploitation should be considering an apology of its own.

The Over 50s Housing UK apology “underlines our view that misconceptions and factual inaccuracies regularly appear in the media about the leasehold sector in general”, Leslie wrote.

Sir Peter told the House: “I want to spell out what is happening, and if members of the Tchenguiz family say that by getting a newspaper [sic] to produce a paragraph, their hands are clean, by all means discuss that in public.”

Sir Peter fired off a series of questions to Leslie by email that were read to the House.

He asked to “see in detail any and all exchanges with Over 50s Housing UK”.

Regarding the Peverel / Cirrus scandal, established by the OFT last December, he said:

“What we know about collusive tendering is that when people complained to the economics crimes unit of the police, to the Serious Fraud Office and to the Office of Fair Trading, because Peverel declared that they had been involved in collusive tendering, when it turned out that they had obtained through their subsidiary Cirrus all the work for new calls systems, which were often not needed and almost always at prices which were unjustified, there was no penalty.

“That is relevant to what Mr David Leslie has told me about Mr Vincent Tchenguiz not being involved at all.

“If relevant, I anticipate being told who established and who controlled the body that did control and had influence on Peverel when so many bad things were done to so many.

“Who was responsible for selecting the professional advisors and others associated with the valuations of properties bought, the loans obtained, the audits of and the responses to leaseholders when presenting valid questions and challenges to the way they were treated.”

“My intention is to lay out in Parliament the details of problems of the past, of the present and how life can be better in the future.”

Sir Peter then turned his attention to the questionable values of freeholds, against which are secured huge loans.

“One thing that the Government should think of doing is asking the professional standards bodies whether they believe they should be disciplining their members—chartered surveyors, valuers, accountants or bankers—when they go along with valuations created apparently out of thin air by the owners of freehold blocks

“For example, at Charter Quay in Kingston, a trust bought a freehold for about £700,000. It revalued it at over £3 million and borrowed £2 million against it, and when eventually the leaseholders managed to get the prospect of having a court decide what the value was, it turned out to be £900,000.

“A company cannot have a valuation trebled or quadrupled in its company accounts without a valuer putting their name to it, an accountant doing the accounts, and auditors and bankers getting involved.”

He urged the government to make professional standards bodies “terrify the life out of others who go along with clients who say, ‘I can arbitrarily increase the value.’”

“The only way a freeholder can put up the value is to have an income stream that goes way beyond the ground rents in the original leases.

“If, for example, they get insurance commissions of 40 per cent or 60 per cent, and if they can take exit fees that have been decided by the OFT and Peverel to be unjustified …”

Sir Peter claimed virtually every MP – including the prime minister and the chancellor – had constituencies where leasehold issues exist.

“I warn that this is an issue that does not just affect my constituents; each individual constituent may be old, elderly, vulnerable or poor, and without good advice cannot stand up against the big people.”

Sir Peter apologised to the House that he not attended the full debate. In part, this was because he was discussing leasehold issues with Lord Best and LKP / Campaign against retirement leasehold exploitation, whose work he praised.

Lord Best hosts an all-party Lords group on leasehold, which includes Baroness Gardner of Parkes.

Stephen Pound, Labour MP for Ealing North, asked Bottomley: “Does he feel that the House should be made aware of the gigantic sums of money that the Tchenguiz family give to the Conservative party?”

Sir Peter replied: “That is true. Certainly it should be known. I am a great believer in transparency.

“I believe that if things can be said in the open and justified or criticised, we are much better off.”

The full Hansard debate can be read here and is reproduced below

Full Hansard account

9.6 pm

Sir Peter Bottomley (Worthing West) (Con): I apologise to Members of the House for not being present for the whole debate. I enjoyed the important speech by my hon. Friend the Member for Broxbourne (Mr Walker), but I think that he will forgive me for saying that the best speech today was by my hon. Friend the Member for Portsmouth North (Penny Mordaunt). By keeping a straight face, she was able to make some serious remarks and some very entertaining remarks. She just about matched the hon. Member for Ealing North (Stephen Pound), who has been known to keep the House entertained on occasion.

One reason I have not been here for the whole debate is that I have been considering issues of leasehold. If I may, I will read out a paragraph from “UK Over 50s Housing” entitled “Vincent Tchenguiz – Apology” from 19 May 2014. It states:

“On 1 May 2014, we published an article entitled ‘Peverel to be pursued in compensation claim.’ We suggested that Vincent Tchenguiz owned, controlled and was involved in the day to day affairs of property company Peverel. We now accept that there is no truth whatsoever to this suggestion. Prior to going into administration, Peverel was owned by the Tchenguiz Family Trust of which Vincent Tchenguiz is a beneficiary. Peverel always had an independent board of directors. Vincent Tchenguiz never had any day to day involvement in the management of Peverel. In particular, he had no knowledge of or involvement in any collusive tendering. We also accept that we have no basis for the claim that Mr Tchenguiz subjected Peverel residents to ‘constant financial clipping.’ We apologise to Mr Tchenguiz for the distress and embarrassment caused.”

I received that quotation from a man called David Leslie of New Century Media. I responded to him, saying:

“I have read the attached piece. A copy of this response goes to the magazine editor. Has your client ever made an apology on any leasehold issue or action?

Can you kindly help on some issues?

May I see in detail any and all exchanges with UK Over 50s Housing Weekly? As you mention them, I copy this to them and I can make it available to others interested.

Please let me know when you or your firm were first engaged to represent or to advise your client.

May I be sent a chronology of Tchenguiz links, including of influence, control, ownership and benefit in by and from Peverel and anything associated with it?”—[Interruption.]

If the hon. Member for Ealing North is asking why this matter is relevant, it is because the Queen’s Speech refers to Bills that are carried over, including the Consumer Rights Bill, which has to finish its Report stage in the
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Commons and has to go on to the House of Lords. In my meeting, I discussed the matter with Lord Best. If we cannot do so, I hope that he, probably with Baroness Gardner, will have the opportunity to add to that Bill provisions for the protection of leaseholders, who in many ways have been brutally abused, financially challenged and often intimidated.

What we know about collusive tendering is that when people complained to the economics crimes unit of the police, to the Serious Fraud Office and to the Office of Fair Trading, because Peverel declared that they had been involved in collusive tendering, when it turned out that they had obtained through their subsidiary Cirrus all the work for new calls systems, which were often not needed and almost always at prices which were unjustified, there was no penalty. That is relevant to what Mr David Leslie has told me about Mr Vincent Tchenguiz not being involved at all.

I have asked for a chronology of the Tchenguiz links of influence, control, ownership and benefit in and from Peverel and anything associated with it. I continued:

“If relevant, I anticipate being told who established and who controlled the body that did control and had influence on Peverel when so many bad things were done to so many.

Who was responsible for selecting the professional advisors and others associated with the valuations of properties bought, the loans obtained, the audits of and the responses to leaseholders when presenting valid questions and challenges to the way they were treated.”

I offered to meet these people. I went on to say:

“My intention is to lay out in Parliament the details of problems of the past, of the present and how life can be better in the future.”

I added that I have an interest in a leasehold flat in Worthing, where our managing agent was good, our freeholder was good, and I have had no problems whatsoever.

One thing that the Government should think of doing is asking the professional standards bodies whether they believe they should be disciplining their members—chartered surveyors, valuers, accountants or bankers—when they go along with valuations created apparently out of thin air by the owners of freehold blocks. For example, at Charter quay in Kingston a trust bought a freehold for about £700,000. It revalued it at over £3 million and borrowed £2 million against it, and when eventually the leaseholders managed to get the prospect of having a court decide what the value was, it turned out to be £900,000.

A company cannot have a valuation trebled or quadrupled in its company accounts without a valuer putting their name to it, an accountant doing the accounts, and auditors and bankers getting involved. I believe that all the professional standards bodies should be saying, “We’re going to find an example that we can make a decision on which will terrify the life out of others who go along with clients who say, ‘I can arbitrarily increase the value.’”

The only way a freeholder can put up the value is to have an income stream that goes way beyond the ground rents in the original leases. If, for example, they get insurance commissions of 40% or 60%, and if they can take exit fees that have been decided by the OFT and Peverel to be unjustified, we have an opportunity of saying that unfair contracts terms law can be imposed by the Competition and Markets Authority or the OFT saying that these things will not happen.

4 Jun 2014 : Column 109

As it happens, virtually every Member of Parliament in England has some of these blocks of leasehold properties in their constituencies. I know that my right hon. Friend the Prime Minister has them in Witney. I know that my right hon. Friend the Chancellor has in them his constituency. I could probably go through each Member present from an English constituency, but I will not do that as that would be extending the courtesy of the House in listening to me, but I declare, and if necessary, I warn that this is an issue that does not just affect my constituents; each individual constituent may be old, elderly, vulnerable or poor, and without good advice cannot stand up against the big people.

I am glad that the Leasehold Knowledge Partnership is going to turn itself into a charity. Campaign against retirement leasehold exploitation, the campaign against retirement leasehold exploitation, is doing well. I ask the Department for Communities and Local Government and the Ministry of Justice, if necessary, together with the Department for Business, Innovation and Skills to get together an interdepartmental group, to ask what are the simplest things we can do to make the lives of leaseholders simpler.

Stephen Pound: The hon. Gentleman has quite rightly and properly mentioned his own possible interest in this matter. Does he feel that the House should be made aware of the gigantic sums of money that the Tchenguiz family give to the Conservative party?

Sir Peter Bottomley: That is true. Certainly it should be known. I am a great believer in transparency. I believe that if things can be said in the open and justified or criticised, we are much better off.

I had not intended to make this speech against the Tchenguiz family. I want to spell out what is happening, and if members of the Tchenguiz family say that by getting a newspaper to produce a paragraph, their hands are clean, by all means discuss that in public. All I am trying to say is that leaseholders deserve protection, I am here to help to protect them, and I am glad that other Members are interested as well.

Ordered, That the debate be now adjourned.— (Mr Gyimah.)

Debate to be resumed tomorrow.

Related posts:

Bottomley’s hard-hitting speech at Chartered Institute of Housing Tchenguiz leasehold interests raised in Commons Janet Entwistle says no staff ‘involved directly’ in Cirrus scam – or even ‘linked’ – are still employed Tchenguiz and Peverel named in House of Lords debate