Examination of witnesses (Questions 100-119)
MONDAY 13 NOVEMBER 2000
DR NORMAN PERRY, MR BILL HENNESSY, MR RICHARD CLARK,
MR GLEN HULL
100. Precisely the sort of thing that might
have occurred in the personnel file if there had been previous
warnings.
(Mr Clark) The natural thing to do in that situation
is to go to the most senior officer in the department within which
that person worked and talk to them about that individual. At
that time I had no reason to distrust the person I was speaking
to, who was the longest serving person within the organisation.
101. Who was not the person most closely concerned
with this person's work and not the person most expected to know
about how he was working on a day to day basis?
(Mr Clark) The way that department worked was in a
very close manner, there was a lot of contact between the officers,
and he was in a good position to be aware of it and, of course,
he could have gone and spoken to the immediate line manager.
102. Did the employees have annual reviews?
(Mr Clark) Yes, they did.
103. So that would have been in the personnel
file as well?
(Mr Clark) Yes, it would,
104. Did you check that?
(Mr Clark) No, I did not because I was speaking to
the head of department, of his department, who was privy to those
reports.
105. On the valuations, my understanding, and
correct me if I am wrong, is when one of your development directors,
deputy director or whatever, decides that they might want to purchase
a house, they try to fix a price with the person concerned and
then, having fixed the price, bring in the valuer to see if that
price is roughly in line with what you would expect, is that right?
(Mr Clark) Now or then?
106. At that time.
(Mr Clark) There would be an informal discussion between
the vendor and the Association and then a valuer would be asked
to look at it, yes.
107. Of the 47, was it, houses bought from Mr
Ram, do we know how many of those are thought to have been over-valued?
(Mr Clark) The total over-valuation at Mr Ram's properties
was about £317,000, which is about £8,000 a property
over-valuation. That is skewed by four particular purchases which
were wildly over-valued and, therefore, those four particular
properties were the ones that raised most suspicion.
108. Is there any indication that the valuer,
in fact, valued those four and all the others at very much the
price that was expected or was there some indication that in those
four cases the valuer was still just a little bit over the top
as he was in all the other cases?
(Mr Clark) I think the situation was that the valuer
was franking a value which had already been informally agreed.
This was seven years ago, going back a long way, but I think it
was a price that had been agreed.
109. So the valuer was told the valuation which
had been agreed between the Housing Association and the seller
before he did the valuation?
(Mr Clark) I am almost certain that would have been
the case.
110. Is that still the practice?
(Mr Clark) That is not the case now.
111. Never?
(Mr Clark) Never is a big word. It is not normal.
112. That seems to make an absolute nonsense
of the valuation, it is not independent in any sense.
(Mr Clark) The valuer is there to serve the Association
and get the best price obtainable, that is how we operate now.
At that time I am almost certain it worked the other way around.
113. Do you now, and did you then, check valuations
with more than one valuer valuing the same property?
(Mr Clark) Now if we were unhappy about one we would
go to a second opinion.
114. How do you know if you are unhappy about
it?
(Mr Clark) If our professional judgment is that a
value is too high that has been put on it we would go for a second
opinion.
115. If the valuation is much higher than the
price you have agreed the fact that it is much too high is irrelevant,
it is obviously better than you have agreed, if you like.
(Mr Clark) No. I am saying that if we are trying to
create a development scheme and we wish to purchase a piece of
land for a particular price, if a valuer is telling us that it
is worth more than we think it is worth, we would go for a second
opinion.
116. Why bother if you have already agreed a
price with the seller?
(Mr Clark) I am saying if the valuer is acting to
advise us on the offer of a price on the land—
117. You do not make an offer until you have
had a valuation?
(Mr Clark) In some cases we do not, we do an outline
of the deal. I am sorry, can I make a distinction. I am running
together the purchase of land and the purchase of property. We
do not purchase many individual properties now. In the case of
individual properties we would ask a valuer to check that what
we had agreed was not too high and that would be more straight
forward. On a piece of land we would get the valuer to value the
land and then we would negotiate on the back of that valuation,
so there would not even be an informal price on the land.
118. Final question: why was Hinson given more
than Hartshorn by Mr Ram?
(Mr Clark) It is very difficult for me to answer that
question. All one can say is that was the amount that was found
and that was the basis of the criminal prosecution. Mr Hartshorn
was the more senior of the two and, therefore, carried more responsibility
than Mr Hinson for the actual—
119. Why did he get less? It seems odd that
Mr Ram paid the more senior man less than the more junior man?
(Mr Clark) Those were the amounts that were found
by the police in pursuing the prosecution.
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