in the back
Conflict of interest zone
Rishi Sunak , Issue 1537
ACCORDING to accounts filed by the investment company of which Rishi Sunak was co-owner and director until becoming an MP in 2015, the chancellor failed for a number of years to declare a substantial financial interest.

ANYTHING TO DECLARE? Chancellor Rishi Sunak
In 2013, Sunak and his wife Akshata Murty set up Catamaran Ventures UK Ltd. It complemented an Indian company of the same name established by Sunak’s billionaire father-in-law Narayana Murthy (his preferred spelling of the family name), founder of IT company Infosys. Days before the May 2015 general election, Sunak resigned and transferred his 50 percent share in the UK company to Ms Murty. The company’s funds, however, had come largely in the form of interest-free loans of £652,499 from each of the couple. According to subsequent accounts, this remained the case after Sunak’s resignation.

“Mr Sunak resigned on 30 April 2015,” noted the 2016 accounts, “and his loan is now treated as a long-term creditor.” The next two years’ accounts quantified the loan by Ms Murty – now sole director – as the total loans to the company minus Rishi’s £652,499, suggesting Sunak’s loan remained outstanding. In other words, the MP would have had a substantial interest in the success of a company, which at the time was losing around £150,000 a year and was technically insolvent.

Capital gains tax cuts
This was not a shareholding, but the rules on registering interests are clear in covering “any other financial asset… that it might reasonably be thought by others to influence his or her actions or words as a member”. A high six-figure loan (a financial asset) to a company, the repayment of which would require commercial success by the company, would certainly fit that.

It was also relevant to Sunak’s words in the House. Speaking on the 2016 Finance Bill, for example, he offered an encomium to private equity and argued in favour of cuts to capital gains tax rates that would “benefit all those small businesses, helping them get the capital they need to grow”. Which sounds a bit like Akshata Murty’s description of Catamaran as backing “British brands that need capital, management expertise and network partners to grow strategically”.

It was all a mistake…
Sunak’s spokeswoman told the Eye that in fact Sunak’s loan to Catamaran had been transferred to his wife at the same time as the shares in April 2015. Told that the accounts said otherwise, even when specifically addressing changes to the balance of Ms Murty’s loans to the company, and that this would mean incorrect figures filed for three successive years, the spokeswoman produced a statement from a “bookkeeper” – who must remain anonymous “to protect the accountant”.

It was all a mistake, said the “bookkeeper”, not corrected until the 2018 accounts. But even this was wrong (hardly helping the credibility of the defence): the first time the loan appears to have been transferred to Ms Murty was in 2019, by which time Sunak was chief secretary to the Treasury. The “bookkeeper”, said Sunak’s spokeswoman, had considered refiling correct accounts but for some reason hadn’t. A new one will.

The chancellor’s wife’s role in signing and filing incorrect accounts, if the explanation is to be believed, merited no explanation. The MPs’ code of conduct in any case demands declaration of relevant “financial interests of a spouse” when speaking in the House. But Sunak has never mentioned Catamaran, despite its relevance to some of his contributions.

While the UK Catamaran company doesn’t disclose the companies it invests in, its sister company in India (which Ms Murty presents as part of the same business in her LinkedIn profile) counts a digital insurance company and a business services joint venture with Amazon in its portfolio. All quite relevant to the 2016 Digital Services Bill committee on which Sunak sat. There he spoke up for universal broadband, “digital by default” government and much else that might benefit Catamaran.

These things are also good news for companies like Infosys, which has a long-running commercial partnership with BT Openreach. Sunak’s wife owns shares in Infosys worth around £400m. At no stage, however, has Sunak declared them either.

Coming clean
As chancellor since January this year, Sunak has a remit so broad that his wife’s financial interests ought to have merited a mention in his separate list of ministerial interests. While this has shown the ownership of Catamaran since November last year, there’s no mention of Infosys, which would have cheered a £5bn broadband investment announced in Sunak’s March budget and has been earning from his Covid spending by setting up digital platforms for the NHS and others as part of the response.

The absence of transparency bears directly on Sunak’s job at the helm of the economy. With national debt soaring over £2tn, keeping interest costs down is one of his main tasks. In October, Moody’s downgraded the UK’s credit rating, citing “weakening in the UK’s institutions and governance”. Should the chancellor not show some decent governance at the top of the Treasury by coming clean on his own and his family’s substantial financial interests?

More top stories in the latest issue:

Humberside’s chief fire officers have enjoyed the benefits of retiring only to return to their jobs a month later, as well as setting up a private venture.

A massive peat slip last month at an Amazon-backed wind farm in Donegal has caused flooding and pollution across the border in Northern Ireland.

Last month’s damning report on the death of baby Lizzie Dixon exposed 20 years of blunder and cover-up, yet it still pulled some punches.

Crossrail failed to act on reports by its own engineering consultants highlighting the “significant risk” to drinkers in a cellar bar in Soho, documents reveal.

A Civil Aviation Authority study has found no obvious evidence that the Shoreham Airshow disaster pilot was at risk of “cognitive impairment”.

Despite government pledges to close down the libel tourism industry, a Swedish-born financier in Monaco is suing a Swedish paper in London.

The private equity owners of one leading Covid-bonanza beneficiary are selling it for a tax-free nine-figure profit after just five years of ownership.

The Scottish government has dismissed an appeal against a rejected planning application for a 12-cage fish farm off the coast of Skye.

An inquest jury has listed 11 serious concerns over the care of a woman with learning disabilities, epilepsy and sleep apnoea who died in 2018.

Job cuts at the University of East London will hit older women, Asian and Jewish academics and trade union reps hardest, a council letter claims.

To read all these stories in full, please buy issue 1537 of Private Eye - you can subscribe here and have the magazine delivered to your home every fortnight.

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Private Eye Issue 1537
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2nd February 2021
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