MINISTERS left lucrative properties owned by QinetiQ wide open to asset-stripping when the Government sold its stake in the defence research group to Carlyle, the American private equity group, the Liberal Democrats alleged last night.
Lord Oakeshott of Seagrove Bay, the Lib Dem Treasury spokesman, accused ministers of allowing taxpayers to miss out on millions of pounds in revenue because the Government had failed to insert strict “clawback provisions” on the sale of assets.
Lord Oakeshott said that the clawback provisions put in place by the Ministry of Defence were “amateurish” and “soft” because they excluded the first 30 per cent of any gain made on property disposals in excess of the July 2001 professional valuation.
“The Government didn’t sell the family silver, they paid the Americans to take it away,” he said.
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QinetiQ made an exceptional profit of £30.7 million from the sale of a property at Pyestock North, equivalent to 37 per cent of its £82.3 million pre-tax profits, according to the group’s 2005 accounts.
Lord Oakeshott has tabled parliamentary questions demanding to know whether the MoD took advice from external property professionals on the alternative use value of the land and why the clawback excluded the first 30 per cent of gains. The clawback arrangement was put in place to run only until July 2013. The proportion of the excess gain due to the MoD reduces over time from 50 per cent to 9 per cent.
QinetiQ has made only two significant property sales — Pyestock, which is subject to the clawback arrangement, and a property in Chertsey, from which the MoD will take all the sales receipts. No further property disposals are expected.
The Liberal Democrats have already called for the National Audit Office to launch an inquiry into the sale of the stake in QinetiQ after it emerged that Carlyle stood to make a profit of up to 800 per cent when the defence group floats next month. The controversial £1.1 billion float will result in Carlyle holding a stake worth £340 million, for which it paid £42.4 million three years ago.
The float is thought likely to trigger a shake-up of the QinetiQ board. The Government has three seats on the board, but this is expected to fall to one after the float.
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QinetiQ has been working on a new radar system to assist aircraft, such as the Harrier, to land safely on the flight deck of an aircraft carrier. The new system has been bought by the US Pentagon for the Joint Strike Fighter.
The MoD has defended the sale, insisting that it picked the highest bidder from 40 parties.
QinetiQ declined to comment on the Liberal Democrats’ claims.
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