November 14, 2012 10:51 pm

Isle of Man faces Pinewood inquiry call

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The Isle of Man’s attempt to recapture its recent glory days in film has sparked Hollywood-style controversy.

A billionaire property magnate, a former banker, and an accountant turned crusading politician are on the cast list. The setting moves from the glitzy studios of Pinewood Shepperton, where the James Bond films are made, to the rolling hills of the island.

The plot takes in stock market deal, a ministerial sacking, hit films and a demand for a parliamentary inquiry.

Central to the drama is last month’s deal for the Isle of Man’s government to take a stake in Pinewood and then allow it to use up to £25m of public money in a media development fund to invest in films.

The shares were bought from Goodweather Investment Management, part of the Peel Group, a property, media and logistics conglomerate controlled by John Whittaker, a property magnate who lives on the island. Peel bought Pinewood last year.

The Manx Treasury said the aim was to revive its 17-year-old film industry, which has helped produce 100 projects including Waking Ned, the hit Irish comedy, and The Libertine, starring Johnny Depp. The strategy aims to help to wean the offshore jurisdiction away from its reliance on financial services.

A report for the Manx government by Oxford Economics, the consultancy, said the film industry had brought £81m in benefits to the island, which has a population of 81,000, and created the equivalent of 2,140 job-years. The government had invested £170m, in 2011 prices, generating £85m in return.

However, competing tax incentives in the UK and Ireland have lured the producers away, with just 11 films made since 2007 and 25 days of shooting on the island in 2011, compared with 830 in 1997.

Eddie Teare, Manx Treasury minister, said: “It was quite clear that the offering we had was no longer attractive. Teaming up with a well-known name such as Pinewood Shepperton gave us extra leverage and . . . they recognised our strong position in the independent film sector and the expertise we have.”

Filming is under way on Belle, the first co-production, and Pinewood said the partnership was working well.

However, seven members of the 33-strong parliament, the Tynwald, voted against the deal in June, including tPeter Karran, the education minister, who was sacked for opposing the arrangement. Kate Beecroft, an accountant and member of parliament, said: “The more questions I have asked, the more questions are raised in turn. The Treasury has been very defensive and doesn’t want to give answers. This is taxpayers’ money.”

Her Liberal Vannin party is calling for an inquiry by the public accounts committee. It says the government rushed into buying the 9.99 per cent Pinewood stake, for £12.2m, before Pinewood Film Advisors, a subsidiary of the studio, received authorisation from the Financial Services Authority to manage the fund, as agreed by Tynwald.

However, the Treasury said it had kept to the agreement.

PFA is an appointed representative of Prosper Capital, which is authorised. Paul Thompson, founding partner,said he was “stepping into the breach while they [PFA] are getting their [FSA] permissions”.

The Treasury said: “The arrangement with Prosper has allowed PFA to become compliant and satisfy the contract terms and conditions. PFA’s arrangement with Prosper will cease when PFA itself receives authorisation.”

Pinewood declined to comment on Prosper’s role

Mr Teare, who ran Isle of Man Bank, the country’s biggest, said he would welcome an accounts committee inquiry – which should have taxpayers glued to the next twist in the plot.

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