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Two of the companies involved in the controversial sale of publicly-owned land for millions of pounds less than its true value are being sued for breach of contract and professional negligence.

Land neighbouring Lisvane, one of the most affluent parts of Cardiff, was sold at the farming value of £1.8m – not the housing value of “at least £39m” in 2012.

The Regeneration Investment Fund for Wales (RIFW), an arms-length body of the Welsh Government, had been given more than 20 plots of land around Wales to sell to raise cash for regeneration schemes.

The Lisvane land - made up of three farms that are now being developed into a new suburb of more than 4,000 homes - was described by the Assembly’s Public Accounts Committee as the “jewel in the crown”.

Housing and Regeneration Minister Rebecca Evans has announced that papers have been served against two firms that advised RIFW in connection with the sales of parcels of land to South Wales Land Developments Ltd (SWLD).

The firms are Amber Fund Management and property firm Lambert Smith Hampton Group Ltd.

The AMs said it was “incomprehensible” that the Lisvane land “was sold to SWLD at an agricultural land value of £1.835m (even with overage) when its potential open market value for residential housing is at least £39 million”.

The value may have been even higher. One estimate put the value of the land at up to £2m an acre - even though it was sold for just £15,000 an acre.

The land is now being developed into housing. The first phase is the controversial Churchlands development.

In her statement, Ms Evans AM said: "On 19 December 2017, Regeneration Investment Fund for Wales LLP issued legal proceedings in the Business and Property Courts in Wales for breach of contract and professional negligence against Amber Fund Management and Lambert Smith Hampton Group Limited in connection with the sale of parcels of publicly owned land to South Wales Land Developments Limited in 2012.

"John Whiting QC of One Crown Office Row and Peter Ratcliffe of 3 Verulam Buildings are representing Regeneration Investment Fund for Wales LLP instructed by Geldards LLP. The papers have now been served on the relevant parties. I will make further statements in due course."

A spokesman for Amber said the firm would defend itself vigorously.

He said: “Amber Fund Management Limited (AFML) notes the recent announcement made by the Welsh Minister for Housing and Regeneration.

"AFML will defend any legal proceedings brought against it in relation to the Regeneration Investment Fund for Wales (RIFW) through all legal means necessary and will not hesitate to progress its counterclaims vigorously.”

In their 2016 report into the Regeneration Investment Fund for Wales, AMs said that "tens of millions of pounds could and indeed should have been generated for investment in regeneration projects across Wales. We believe such a cavalier approach to the disposal of public assets is scandalous."

They further noted that a site in Rhoose “was purchased from RIFW for less than £3m, without overage, and sold on by SWLD for nearly £10.5m”.

The committee concluded: “The fact that one of the largest sales of publicly owned land in Wales should have generated tens of millions of pounds more for the taxpayer is inexcusable.”

It warned that “Welsh Government oversight of RIFW was fatally flawed”.

In January 2016, First Minister Carwyn Jones said the Welsh Government was “sorry” the delivery of RIFW had fallen “well below the standards we would expect”.

Welsh Conservative leader Andrew RT Davies said: “Selling off large pieces of valuable land in private deals was never going to deliver value for money for the public purse, and it is vital that this Labour Government learns the lessons.

“Carwyn Jones promised to be held to account for this debacle, and it is some relief that ministers are now seeking to recoup some of the millions of pounds thrown away during the RIFW debacle...

“This was the low point for the Welsh Government in terms of public investment, and it is vital that future projects deliver value-for-money for hard pressed taxpayers.”

A Ukip spokesman said: “The Welsh Government should have been far more careful with public assets and land.

"They should have had robust procedures in place to stop mistakes such as this. Attempts to retrieve the lost revenue are welcomed, but their own incompetence may make these attempts a case of too little, too late."

Lambert Smith Hampton has been contacted for a comment.