Link to this page: http://www.socialistparty.org.uk/issue/512/3451
The Socialist 29 November 2007 |
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Public money stolen by rich investors
THE TEN most senior managers of QinetiQ, the Ministry of Defence (MoD) research firm, made an almost 20,000 per cent return at the taxpayer's expense out of the firm's part-privatisation to, amongst others, a huge private equity corporation.
The National Audit Office (NAO) accuses the MoD of letting top civil servants become multimillionaires. The Treasury ordered the sell-off of QinetiQ, one of Europe's biggest science and technology companies. The US-based Carlyle group, one of the world's biggest private equity companies, snapped up a 33.8% stake for £42 million in 2003 selling it for £374 million three years later, though it still keeps a 'significant stake'.
What the NAO diplomatically labels "over-incentives" for senior civil servants allowed QinetiQ chairman Sir John Chisholm and chief executive Graham Love to turn investments of £129,000 and £108,000 into assets worth £22 million and £18 million respectively when the firm was floated last year.
In total, ten top managers gained £107.5 million - a 19,990 per cent return for the £540,000 of shares they bought. The scheme duped the public out of tens of millions of pounds.
The Carlyle Group is a corporation that handles investments for the rich and powerful, including members and ex-members of the Reagan and Bush administrations and Saudi Princes – the Bin Laden family were investors until 2001. It has many interests from Dunkin' Donuts to 'defence'.
Carlyle has close ties to the US Republican party and the Bush family. George Bush senior worked for them and George W was a director of Caterair, a company Carlyle acquired in 1989.
Other former top Carlyle executives included former CIA directors, a US secretary of State and a former British prime minister, John Major.
This corporation is viewed in the USA as an expert in acquiring firms at prices widely seen as "a steal." QinetiQ was blatantly stolen from us to boost the interests of wealthy private investors.
The MoD, like other government departments, was built with public money by public servants. We should demand that all privatised companies are brought back into public ownership and run under the democratic control of the working class, not of agents of big business.