Mea Megathread

[WilDDog]

Didn't some businesses threaten to relocate if this happened? Namely Strix?

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Well you can't blame them really.

I think there will be a lot more following suit, not just businesses either.

 

Quite frankly not many people will be able to afford these sort of price hikes.

[Addie]

Didn't I hear very recently that Donald Gelling stated businesses would not be facing a large increase in charges?

 

Sorry, but I don't know where th elink would be for this.

[kellyiom]

I'm with Rog; it's shocking incompetence that a CEO of a utility like that wouldn't have some sort of non-compete or IP protection built into their contract. Who drafts MEA employment contracts? DTI, the AG or an advocate? Clearly there is no corporate governance policy in place either, therefore the £50k trip. Bet you would find it difficult to find that scenario being played out in a FTSE100 company worth mega-billions with CEOs annual packages running into the millions. Not saying a FTSE exec wouldn't have gone business/1st and stayed 5 star but still nowhere near 50k- this should be prosecutable

[P.K.]

I smell a vested interest.

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For once I would agree. Chinahands' synopsis smells rather too much like the case for the defence to me. This caught my eye:

 

its the MEA's loss ... these people worked for years and years developing business opportunities within the MEA; telecoms, Broadband via power lines, data storage, satellite communications. PKF says the business plans had revenues in the £10's of millions in only a few years. That these have now come to nothing isn't the MEA's fault; its the Politicians, the DTI and Treasury who are to blame for shutting them down. The fact that REH has similar ideas isn't too problematic for me ..

It's not the Mea's loss but those who now have to finance a crippling debt i.e. the consumers on the island. Sure there MAY be potential revenue streams piggy-backing on the power lines but it's all un-quantifiable. As for the gas pipeline I think it's just a complete white elephant:

 

The gas pipeline has a 60 year life; it won't only take natural gas, but methyl-hydrates the next big thing in blue sky research as a replacement when oil and NG run out. The power station has a life of 30 years.

For "blue sky" read "as pie in". Only when oil and NG have become so scarce that the prices are through the roof will oil and NG alternatives be researched. Guess what? That research might conclude that replacements for oil and NG in the same format are a non-runners anyway. Next year the UK (that supplies the IOM) becomes a net IMPORTER of NG. UK prices for NG are then going to go only one way and it's not downwards.

 

I reckon that the reason why the banks were willing to lend the MEA the money in the first place was that they knew the money was secure over 30 years or so ...

So presumably you DON'T reckon that the reason the bank was willing to lend MEA the money was because the man who was loaning the money on behalf of the bank, was, well, MEA actually. But then the money wasn't loaned to MEA, was it? It was actually loaned to the Manx Cable Company. Now why on earth would the head of MEA in his capacity of fund manager at Barclays lend the money to the MCC (not the cricket lot) and not the MEA itself?

 

Perhaps Chinatown could explain that little anomoly? I for one would really like to know why it went that way.....

[kellyiom]

and isn't there some sort of obligation to declare potential conflicts of interest? Barclays is a public company and this risk should have been picked up somewhere...surely directors dealing with companies where they have dual board memberships have some sort of obligation to ensure transactions are at arms length? anyone know if the authorities have requested an investigation?

[Gladys]

All directors are under an obligation to act in the best interests of the company of which they are at that time acting. This will include the disclosure of their interests in any contracts or matters under consideration by the relevant board. However, if they are directors of two companies, when they are acting for one they must only consider the interests of that company not the other. There are tomes written on this particular aspect.

 

This is classic company law stuff that anybody who has studied and worked in the corporate environment will know. It is, therefore, inconceivable to me that any company of the standing of those involved would not have the necessary procedures in place. We must assume that proper disclosure did take place (I hope).

 

What does bother me, however, is the migration of intellect (I will not use the term intellectual property as that is a different matter) at a time when matters were taking a nosedive. Why? Was it a matter of rats leaving a sinking ship (and taking the skipper with them) or was it because, having diligently discharged their function and formulated a challenging, radical but viable business plan, they could not deliver that plan? Because...?

 

There are a great many unanswered questions which do not necessarily imply incompetence etc. etc., but I still come back to my original concern that something big changed and find that something big and we may have the answer to resolve this sad and sorry affair!

[ButterflyMaiden]

This is classic company law stuff that anybody who has studied and worked in the corporate environment will know.  It is, therefore, inconceivable to me that any company of the standing of those involved would not have the necessary procedures in place.  We must assume that proper disclosure did take place (I hope).

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All nationalised enterprises such as the MEA are statute led. The majority of statutes defining the allowable activities of such nationalised bodies have a section which effectively protects third parties dealing with the Nationalised body.

Generally such a section would provide that it is not for a third party to question the legitimacy of the actions of the Nationalised body. For the avoidance of doubt, this would mean that the third party would have a right, enshrined in law, to assume the nationalised body was acting within its remit.

I would be very surprised if the Electricity Act did not contain such a section protecting third parties who may have entered into contracts with MEA. Perhaps one of our legal minded people could enlighten us. In the meantime I will check myself!

[Rog]

it won't only take natural gas, but methyl-hydrates the next big thing in blue sky research as a replacement when oil and NG run out. 

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Methyl-hyrdates are solids.

[Lonan3]

it won't only take natural gas, but methyl-hydrates the next big thing in blue sky research as a replacement when oil and NG run out. 

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Methyl-hyrdates are solids.

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Methyl Hydrates come from millions of years of bacteria in the sea. It is pressured and becomes Methane Gas. The gas is then compressed into ice. Although Methyl hydrates are an ice, it is near boiling point. When it bubbles, any ships near by will sink within a minute, because of gravity.

Since mining this is very dangerous, no one has attempted it, yet. Japan is getting ready to use new methods for this mining. The method they will be using is called Hydrocarbon Extraction. The risk with this is that, it will send huge bubbles up into the ocean. So anything that would be above it would be instantly pulled under the sea.

[Rog]

it won't only take natural gas, but methyl-hydrates the next big thing in blue sky research as a replacement when oil and NG run out. 

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Methyl-hyrdates are solids.

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Methyl Hydrates come from millions of years of bacteria in the sea. It is pressured and becomes Methane Gas. The gas is then compressed into ice. Although Methyl hydrates are an ice, it is near boiling point. When it bubbles, any ships near by will sink within a minute, because of gravity.

Since mining this is very dangerous, no one has attempted it, yet. Japan is getting ready to use new methods for this mining. The method they will be using is called Hydrocarbon Extraction. The risk with this is that, it will send huge bubbles up into the ocean. So anything that would be above it would be instantly pulled under the sea.

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Ice is a solid. Any ice. The pipeline may well carry methane gas resulting from a continious reformation process taking place somewhere, but it won't carry methyl-hydrates.

[Gladys]

This is classic company law stuff that anybody who has studied and worked in the corporate environment will know.   It is, therefore, inconceivable to me that any company of the standing of those involved would not have the necessary procedures in place.  We must assume that proper disclosure did take place (I hope).

<{POST_SNAPBACK}>

 

All nationalised enterprises such as the MEA are statute led. The majority of statutes defining the allowable activities of such nationalised bodies have a section which effectively protects third parties dealing with the Nationalised body.

Generally such a section would provide that it is not for a third party to question the legitimacy of the actions of the Nationalised body. For the avoidance of doubt, this would mean that the third party would have a right, enshrined in law, to assume the nationalised body was acting within its remit.

I would be very surprised if the Electricity Act did not contain such a section protecting third parties who may have entered into contracts with MEA. Perhaps one of our legal minded people could enlighten us. In the meantime I will check myself!

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It was not the MEA that entered into borrowings, but the subsidiaries. As part of the due diligence process the bank would probably have obtained an opinion on the vires of the company to enter into the borrowing. In any case, having worked for 16 years for a statutory corporation, I do not recall the incorporating statute have such a provision as you mention.

[Gladys]

This is classic company law stuff that anybody who has studied and worked in the corporate environment will know.   It is, therefore, inconceivable to me that any company of the standing of those involved would not have the necessary procedures in place.  We must assume that proper disclosure did take place (I hope).

<{POST_SNAPBACK}>

 

All nationalised enterprises such as the MEA are statute led. The majority of statutes defining the allowable activities of such nationalised bodies have a section which effectively protects third parties dealing with the Nationalised body.

Generally such a section would provide that it is not for a third party to question the legitimacy of the actions of the Nationalised body. For the avoidance of doubt, this would mean that the third party would have a right, enshrined in law, to assume the nationalised body was acting within its remit.

I would be very surprised if the Electricity Act did not contain such a section protecting third parties who may have entered into contracts with MEA. Perhaps one of our legal minded people could enlighten us. In the meantime I will check myself!

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It was not the MEA that entered into borrowings, but the subsidiaries. As part of the due diligence process the bank would probably have obtained an opinion on the vires of the company to enter into the borrowing. In any case, having worked for 16 years for a statutory corporation, I do not recall the incorporating statute have such a provision as you mention.

 

I wanted to add that there is a difference also in the power of the entity to enter into a given contract and the discharge by the directors of that entity of their obligations towards it. The provisions you describe may well address the issue of the power of the entity itself but not the conduct of the directors in reaching that decision; disclosure of any interests being one of the obligations. In my earlier post, I was not trying to assert whether there was or wasn't the proper disclosure of interests, but merely that that is a requirement for directors on both sides to do so. It is also not clear that there was a potential conflict requiring disclosure at the time the loans were taken out.

[plan_b]

This thread isn't that mega. Its only 8 pages.

[Tugger]

"It was not the MEA that entered into borrowings, but the subsidiaries. As part of the due diligence process the bank would probably have obtained an opinion on the vires of the company to enter into the borrowing. In any case, having worked for 16 years for a statutory corporation, I do not recall the incorporating statute have such a provision as you mention."

 

They did, from Cains. The opinion is appended to the Pannells report

[ButterflyMaiden]

In any case, having worked for 16 years for a statutory corporation, I do not recall the incorporating statute have such a provision as you mention.

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Gas & Electricity Act

 

As suspected, the statute does contain a provision to afford some protection for third parties dealing with the statutory body.

 

For those interested the appropriate section is section 5 (2), this is on page 4 of the pdf.

 

 

5. Constitution etc. of Authority

(1) In Schedule 1 to the Electricity Act 1996, for paragraph 1(1)

substitute —

"1. (1) The Authority shall consist of —

(a) a chairman, and

(b  ) not less than 4 and not more than 6 other members,

all of whom shall be appointed by the Council of Ministers, subject to the approval of

Tynwald.".

(2) In section 2 of that Act, at the end insert —

"(11) Where under any enactment the consent of the

Department is required to the exercise by the Authority of any

function, a person dealing with the Authority shall not be concerned to

see or inquire whether any such consent has been given.".