Nomura worries were dismissed as business ploy

Japanese bank lost trust in the attraction's operating company after revelations about financial errors and inadequate record-keeping
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The Independent Online

Most observers assumed the mutterings of discontent from the Japanese bank last week were posturing. There was no way Nomura International would pull out of the deal to buy the Dome, they said. Its grumblings were designed to drive down the price.

Most observers assumed the mutterings of discontent from the Japanese bank last week were posturing. There was no way Nomura International would pull out of the deal to buy the Dome, they said. Its grumblings were designed to drive down the price.

As the Dome's new executive chairman, David James, had stated, Nomura's Dome Europe subsidiary would "make a killing" with its £800m proposal to turn the vast tent into a hi-tech "urban entertainments resort".

For £105m and some small change, Nomura had agreed to buy a 999-year lease on about 60 acres of prime real estate on the opposite side of the Thames from Canary Wharf. Its theme park, involving state-of-the-art virtual reality games and rides, would attract between 3.5 million and 5 million visitors a year, and would eventually reap profits to match, the bank said.

So yesterday's statement from Nomura that the deal was off surprised everyone concerned - ministers, the New Millennium Experience Company (NMEC), which runs the Dome, and the Millennium Commission, which is bankrolling the attraction. One official who is closely involved said: "I think everybody accepted that it was part of normal business negotiations to have a perceived reluctance to commit to the deal. I don't think people thought it would actually happen."

After last week's furore over the latest Lottery grant and the reduction of the visitor target, Nomura's renovation of a depressed area of south-east London was seen as a last justification for the funds.

The bank's decision to pull out was finalised yesterday. But Nomura had been increasingly nervous in recent weeks, as its completion date, which had been planned for mid to late August, slipped by.

The catalyst was Mr James's revelation about the nature of NMEC's financial and contractual records. He said an investigation by PricewaterhouseCoopers (PWC) had uncovered a series of errors that would cost £47m to put right. Mr James would not, however, give Nomura a copy of the PWC report, raising the suspicion of Guy Hands, the head of Nomura's Principal Finance Group in Britain, that it contained further damaging material. To cap it all, Mr James revised the NMEC's visitor target to 4.5 million paying visitors, from 6.6 million.

As The Independent disclosed on Monday, a Nomurasource said the deal was "very marginal". The bank felt the new figures raised profound questions about NMEC's trustworthiness. It had been "lying all the way along" about its figures, he said.

Another important factor in yesterday's decision was its own planning. Nomura needed to apply for planning permission this month, and to be ready to reopen the attraction from February 2001 onwards.

But the NMEC is suspicious about Nomura's reasons. One source said yesterday that Mr James had told Mr Hands that a new team of expert auditors would have completed its work by today."We don't believe that the reasons they have given have got any substance," the source said. "We're quite clear it would have been possible to have got to the stage of exchange of contracts by tomorrow night."

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