Minerva attacks Labour loan claims

Minerva, the property group embroiled in the "loans for honours" political scandal, defended two planning decisions yesterday that went in its favour.

The company declared it was "ridiculous" to suggest loans made by its directors to the Labour Party were related to planning approvals granted for its two biggest developments. The loans were provided by Andrew Rosenfeld, Minerva's chairman, and Sir David Garrard, the previous chairman.

"There were no corruptive influences involved. I find the suggestion of that ridiculous," Salmaan Hasan, the chief executive, said.

John Prescott, the Deputy Prime Minister, did not call in the company's £650m scheme to build a shopping centre in Croydon for a public inquiry. He blocked a scheme by another developer for a rival centre. Mr Rosenfeld loaned the Labour Party £1m last year.

In 2003, Mr Prescott did not call in Minerva's plans for a skyscraper in the City, whereas plans for two other skyscraper schemes had to go through inquiries. At that time the chairman of the company was Sir David, who had months earlier given Labour £200,000. He went on to lend the party £2.3m last year and was nominated for a peerage.

Mr Prescott has denied any wrongdoing and has said he was unaware of the existence of the loans until newspapers revealed their existence in recent weeks.

Mr Hasan said permission for the Croydon development was determined by the local authority and the Greater London Authority. He said the Minerva Tower decision was taken by the Corporation of London and the GLA. Two other proposed London skyscrapers had gone through inquiries, he said. "How many public inquiries do you need to have on tall buildings?" Mr Hasan said.

Reporting half-year results yesterday, Minerva said the Pension Regulator had cleared it over its treatment of pensioners of Allders, in which it had bought a controlling stake. Allders sold its most valuable asset, its Croydon store, to Minerva and went bust 14 months ago, leaving a £68m deficit. Mr Hasan said Minerva bought the store at a 5 per cent premium to its market value. It forms the basis of Minerva's scheme for Croydon.