Pachuri, acting and Actis
Today Richard has focused on Pachuri's TERI-Europe—a registered charity with an expenditure that far outstrips its incoming resources. The company secretary is a certain Dr Ritu Kumar—herself a woman with, it seems, considerable business interests in her own right. In particular, I was interested by this paragraph...
But this cv also has Dr Kumar as a senior adviser on environmental, social and governance issues with Actis UK—a private equity firm investing primarily in Africa, China, India, Latin America, South and South East Asia - where "she has advised on weaknesses and opportunities in health and safety, as well as environmental, social and business integrity since 2006." The company handles $7.3 billion in and has over 100 investment professionals in nine offices worldwide.
Thus far then, with a great deal more to cover in what becomes an increasingly murky story, we have a charity which is a company wholly owned by Dr Pachauri and Dr Kumar, the latter who not only works for TERI-Europe but also for a government-funded NGO, the Commonwealth Secretariat and a private equity company handling billions in investment funds.
Anyone who is a regular reader of Private Eye will be familiar with Actis, a firm set up by the Commonwealth Development Corporation (CDC)—whose directors were then allowed to buy the firm for a ludicrously small sum of money.
Due to Private Eye's frankly irritating lack of engagement with the online community, I am unable to find anything useful on that magazine's website; as such, I shall turn to blogger Slimy Bastards to summarise the gist of the CDC/Actis story.
In 2004, the then Development Secretary Hilary Benn carved out the fund management operation from the government-owned develpment fund CDC. The fund's function is to invest UK aid in companies in developing countries. The private equity firm created to do this, Actis, was set up in swanky riverside offices using £5m of public money while 60% of the new "limited liability partnership" was sold for £373,000 to former CDC managers, led by Paul Fletcher. One hell of a good price for managing £1bn of state funds without facing any competition whatsoever.
Fletcher and his pals quickly recouped their outlay. Actis reported profits of $14m in the first year, and that was after accounting for its 192 employees being paid an average of $220,000 each and senior partner Fletcher pocketing $1.84m. Actis will tell you that the government is entitled to 80% of their profits but that arrangement ends in 2009. Furthermore, in a recent public accounts committee report, Fletcher and Co's share (bought for £393,000 remember) was valued at over £200m, and possibly as much as £600m.
So why was Actis sold for so little when it was quite obviously worth so much more? Private Eye has asked to see the calculations that led to the 2004 valuation of £393,000 and how much the still publicly-owned CDC pays Actis to manage the fund. However, the Department for International Development's Openness Unit (an oxymoron if ever there was) and the Shareholder Executive have both refused to release any details. The DfID claimed the valuation calculation was "commercially sensitive" and revealing it was not in the public interest. They did reveal however, that "the calculations were undertaken by KPMG Corporate Finance Consultants, appointed by CDC Group plc to provide an objective opinion."
OK, so that's the same CDC Group who's chief executive Paul Fletcher and other senior managers would be the buyers of the new company. Conflict of interest?
Er... Yes. Here's Politaholic with another quick summary—just to prove that I am not making this stuff up.
Then, in Private Eye it is reported that the previously government owned Commonwealth Development Corporation (CDC) - which invests UK aid in firms in developing countries - has been sold off to a company called Actis (created by former CDC managers!). They picked up the deal for £373,000 (which, says Private Eye, was "a bargain price for managing, without facing any competition, £1 billion of state funds"). In the following year Actis reported profits of £14 million ("..and that was after the firms 192 employees had been paid an average of $220,000; the senior partner Paul Fletcher "trousered" $1.8 million). This is taxpayers money. And that's just the tip of the iceberg. The company is worth more than £200 million and possibly as much as £800 million: "In two years the 20 or so partners in Actis have seen their money grow by at least 5000%...". Surely this is something the Serious fraud Office should be investigating? It strikes me as a lot more serious than "cash-for-peerages". The Minister responsible was nice guy Hilary Benn.
Indeed: he's a crook if ever there was one—always beware of the "nice guys". You can have that advice for free, by the way.
Incidentally, CDC lists itself, in the footer of its website, as a member of European Development Finance Institutions which, in turn, describes itself thusly:
EDFI is the Association of European Development Finance Institutions, a group of 16 bilateral institutions which provide long-term finance for private sector enterprises in developing and reforming economies. Since its foundation in Brussels in 1992, EDFI's mission has been to foster co-operation among its members and to strengthen links with institutions of the European Union.
EDFI is based in Luxembourg (where else?), and funding for the EDFI is provided by its members and, in large part, by the European Investment Bank—this last has provided at least €100 million since May 2009.
In May 2009, EFP was replenished with €230 mln, €100 mln provided by the EIB and €130 by the EDFI members.
Under its previous mandate which expired in April 2009, EFP has approved financing to 25 projects in 11 ACP countries for a total amount of €280 mln. in the following sectors: Agribusiness, Banking, Communication, Health, Hotels, Housing, Industry, Infrastructure, Power and Air Transport.
Interesting stuff, wouldn't you say?
Of course, the European Investment Bank does good work all over the world, including approving finance to the tune of €150,000,000 (£135,402,142) [PDF] for the IREDA Renewable Energy Framework Loan.
IREDA is the Indian Renewable Energy Department Agency Ltd.
IREDA is a Public Limited Government Company established in 1987, under the administrative control of Ministry of New and Renewable Energy (MNRE) to promote, develop and extend financial assistance for renewable energy and energy efficiency/conservation projects with the motto : " ENERGY FOR EVER "
Indeed. A quick search of the MNRE website shows that the Ministry works closely with TERI (and a search of TERI's site reveals reciprocal links). TERI is, of course, otherwise known as The Energy and Resources Institute—the director of which is millionaire businessman, Rajendra K Pachuri.
The link is a little tenuous, I'll admit, but took less than ten minutes of derisory 'net searching to establish—maybe Richard can do better. On the face of it, however, it does seem that all roads (not to mention millions of Euros) do lead to millionaire businessman Rajendra K Pachuri...