Chairperson John Lynn said Peabody's own high-profile financial difficulties (HT 19 December, page 7) would strengthen the troubled co-op's hand in a legal battle with the regulator that has been raging since 2000.
It was then that a statutory inquiry found signs of serious mismanagement at the east London cooperative.
In March 2002, the regulator decided to force Clays Lane to transfer its land to Peabody because, it said, the co-op had not improved.
Deputy prime minister John Prescott backed this decision. Clays Lane, however, said it would prefer to transfer to Scottish cooperative Tenants First.
The cooperative, which never accepted the inquiry's conclusions, now claims to be over any problems. But the corporation continues to insist that the merger must go ahead.
Clays Lane is seeking a judicial review of the case on the grounds that the Housing Corporation acted unfairly.
Lynn said he was "appalled" the cooperative was being forced to transfer its properties to Peabody.
Lynn said: "It seems the Housing Today reports have highlighted some of the same issues [the corporation] was accusing us of.
"We have informed our solicitors, and are maintaining close contact with the developing story. We have serious concerns that regulatory powers are being exercised unfairly.
"In the light of current reports about Peabody, we maintain that a compulsory transfer is unwarranted. We will continue to fight it in the courts."
A spokesperson for the Housing Corporation said it was unable to comment because the case was still under judicial review.
A spokeswoman for Peabody said that the go-ahead for the transfer would depend onthe outcome of the judicial review.
Peabody laid off 51 staff in December, mostly from the development department, as partof its efforts to meet the decent homes target.
Source
Housing Today
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