Select Committee on Standards and Privileges Eighth Report


Letter to the Parliamentary Commissioner for Standards from Mr Tony Baldry MP

You will have seen the article in Sunday's "Sunday Telegraph". May I please formally refer this article to you for investigation?

As I understand it, these are matters about which complaint has been made against me.

The loan for £5,000:

The facts of this are straightforward. I have known Sarosh Zaiwalla for a number of years as a friend. Some years before I became a Minister we worked together on a charitable trust called "The Prospect Trust". We didn't see much of each other during the time I was a Minister but when details of my divorce were published in the newspapers, Sarosh got in touch with me, as he too had experienced a divorce in similar circumstances.

We met from time to time thereafter, socially as much as anything, to give each other mutual friendship and support.

It is true that he made me a loan. There was a Loan Agreement document signed and witnessed by me, which I hope can be produced which sets out the terms of the loan.

The reason why Sarosh Zaiwalla and I couldn't immediately recall details of the loan is that we were both telephoned late on Friday evening, all these matters happened some time ago, and we were both seeking to co-operate fully with the "Sunday Telegraph" who were making perfectly legitimate enquiries.

I hope that it will be possible to produce the loan document as it will show not only the dates and the amounts, but the fact that I did pay interest on this loan.

I asked Sarosh Zaiwalla if I could borrow £5,000 and my recollection is that it was agreed that I would borrow £5,000 for a short period of time, but that I would pay back the sum together with the amount of interest he would lose by not having that money on deposit.

When I repaid the loan, it was repaid with interest.

I hope that it will be possible to produce a copy of the Loan Agreement. I myself did not keep a copy as once the money had been repaid I saw no necessity so to do. I would stress that at this time my only relationship with Sarosh Zaiwalla was one of mutual friendship. I had absolutely no contact with him in my capacity as a Government Minister. As far as I am aware, his firm at that time was dealing primarily in shipping matters and international commercial arbitration and had no dealings with the Ministry of Agriculture where at that stage I was a Minister.

The only reason that Sarosh Zaiwalla lent me this money was out of friendship but, as I have explained above, it was a loan that was made without commercial detriment to this firm, with it being agreed that I pay the cost to them of my using the sum of money over a short period of time.

The Loan Agreement was witnessed by another partner in the firm. That partner was subsequently dismissed for misconduct. There was subsequently arbitration on the Partnership Agreement where a former High Court Judge found that this same former partner should repay a substantial sum of money to Zaiwalla & Co. It was he who took possession of the Loan Agreement and it may be that when he left the firm, he took this document, together with other papers. However, I am sure that Sarosh Zaiwalla will use his best endeavours to find a copy of the Loan Agreement if it still exists and is in his possession. Moreover, as this loan went through his firm's accounts, I am sure they will have a record of the day on which it was lent, the amount that was lent, and the day on which it was repaid, and the amount which was repaid.

I understand that it is said that I should have declared this loan to my Permanent Secretary at the time.

I considered this to be a small loan, as between friends, over a short period of time. I was confident that at the end of the loan period it could be repaid. I do not consider that at any time it made me in any way beholden to Sarosh Zaiwalla and indeed in due course the sum together with the agreed interest, was repaid.

I certainly didn't appreciate at the time that there was a suggestion that there was a requirement to report such a loan to the Permanent Secretary or to enter the same in the Register of Members' Interests.

It is of course a matter for you and the appropriate authorities of the House to decide whether I got this matter wrong. If I did I am fully willing to accept any criticism or chastisement that is made.

Asian Business Breakfast Club:

The background to this is that some time after the General Election, I was having lunch with Sarosh Zaiwalla, the Chinese Ambassador and an Asian banker. Those present expressed concerns that they felt that the Asian business community was not sufficiently involved in many ways in the City; for example, Asian business people were rarely seen at City Livery Dinners. The idea thus spontaneously arose to form an Asian Business Breakfast Club, to meet from time to time at the House of Commons.

These are matters in which I have a genuine interest and concern. When I was a Minister in the Foreign Office I had amongst other things responsibility for our relations with South Asia and when I was Minister in the Environment I had chaired the Inner City Faith Forum, and am very conscious of the contribution that the Asian communities played in the life of our cities and in particular in the life of London.

The purpose of the Breakfast Club was to enable members of the Asian business community to feel more involved and have the opportunity of meeting business people from established UK companies.

The Breakfast has the continued support of a number of High Commissioners and Ambassadors, and also of London First, which, as you know, seeks to promote London as a natural centre for investment and commerce.

The decision was taken that, administratively, it would be difficult to have a permanent fixed membership as Dining Room A only takes 54 people and different people might wish to come to different breakfasts depending on the guest speaker. In practice, there is however, a list of "members" who are written to prior to every Breakfast, and in practice, those who attend, attend on a "first come first served" basis. Those attending have welcomed the formation and the work of the Asian Business Breakfast, and indeed as a consequence, the Turkish Ambassador and the Ambassadors of a number of Central Asian countries, asked if a Turkish, Trans-Caucasian and Central Asian Business Breakfast could be established. It must surely be for the public good that the House of Commons is seen, and is in practice, seen to be used as inclusive of every community as possible.

At no time have I derived any financial benefit from the Asian Business Breakfast. So far as I was concerned, it was a constructive initiative to promote good relations between the Asian business community and the community in which they find themselves working within London.

As I have had at no time any financial benefit from the Asian Business Breakfast, I could and can see, no interest to register. With no interest to register, I could not and do not see that when booking the Dining Room for breakfast, that there was need for me to declare any such interest.

After the General Election I returned to practise at the Bar. That fact is registered in the Register of Members' Interests and it is correct that from time to time Zaiwalla & Co instruct me as a Barrister. That is in exactly the same way as they would instruct any member of the Bar to conduct cases and do paperwork where they are competent.

You will see from the Register of Members' Interests that I have sought fully to declare all my registrable interests and indeed I think that your records will show that, from time to time when I have had queries as to what interests should be registered, I have written to you.

There was absolutely no intention on my part to mislead anyone. I genuinely believe that the Asian Business Breakfasts and the work that they do is to the public good but again I would welcome you investigating these matters, and I would obviously welcome any ruling that you and the House authorities may make.

At no time have I sought deliberately to fail to comply either with the Ministerial code of conduct, or for the rules of the House of Commons relating to Members' Interests.

I am sorry that my integrity should have been called into question in this way but I readily and willingly accept that these are, of course, proper matters to be investigated and I would ask that they be investigated.

I would also simply observe that when asked about these matters by the "Sunday Telegraph" I responded fully and openly and that all the information within that article relating to me was information that I volunteered to them.

I personally would be unhappy at participating in proceedings on the floor of the House whilst there is any question as to my integrity and whilst I intend conscientiously to continue to deal with constituency correspondence, and constituency concerns, if I obtain the permission of my Whips, I intend to withdraw from the proceedings of the House until these matters are resolved.

It goes without saying that I will wish to co-operate with you, the Registrar of Members' Interests and the House authorities in any way that I can.

6 December 1999

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