(vii) Complaint alleging that
Mr Vaz had failed to register a remunerated directorship with
a company, General Mediterranean Holding, or with subsidiaries
of that company
Background
636. During my previous inquiry into complaints
that Mr Vaz had failed to register some of his pecuniary interests
I had received information on 29 January 2001 from Mr Andrew Parker,
a journalist at the Financial Times alleging that Mr Vaz had been
a director of General Mediterranean Holding (UK) for a brief period
shortly before becoming a Minister (Annex vii1) and that he had
not registered this paid position.
Information held in the registry files in my office
637. On 15 April 1999 Mr Vaz wrote to the Registrar
to update his Register entry with details of a visit to Oman.
638. The Registrar sent him a copy of his revised
Register entry on 20 April 1999.
639. On 28 April 1999 Mr Vaz wrote to the Registrar
thanking him for the printout of his revised Register entry and
saying:
"Thank you for your
communication of 20th April 1999. I would be glad if you add under
point 1, "Remuneration Directorships", my new Directorship
which is with The General Mediterranean Group (non-executive)."
640. On 4 May 1999 the Registrar wrote to Mr
Vaz asking him for details of the nature of the business of The
General Mediterranean Group, which Mr Vaz provided on 17 May.
641. On 17 May 1999, Mr Vaz was appointed Parliamentary
Secretary in the Lord Chancellor's Department.
642. On 20 May 1999 the Registrar wrote to Mr
Vaz thanking him for his amendment and provided him with the copy
of his amended entry, saying it "will appear in the next
updated print out of the Register." Mr Vaz's revised
entry, dated 19 May 1999, read:
"1. Remunerated
directorships
The General Mediterranean
Group (non-executive); investment holding company."
643. Mr Vaz and the then Registrar discussed
the entry on 20 May 1999 and the Registrar wrote to him as follows
on 21 May 1999:
"Following our conversation
yesterday, and on the assumption that you had not yet received
any remuneration from the General Mediterranean Group when you
were appointed to ministerial office, I have removed your directorship
from the Register. As things turned out, it had not appeared on
any published update."
644. The then Registrar confirmed this conversation
by sending Mr Vaz another amended printout of his entry dated
21 May 1999 which therefore showed no remunerated directorship.
The next updated printout of the Register was made available to
the public on 27 June 1999.
Public Records
645. The 1998 Annual report of General Mediterranean
Holding SA includes the financial statements to 31 December 1998
approved by the Board on 1 July 1999 and confirmed by BDO Stoy
Hayward, the Chartered Accountants, on 1 July 1999. Mr Vaz is
listed in that report as a director of the UK Holdings Company
(Annex vii2).
646. The 1997-1999 Brochure of Compagnie Internationale
de Participations Bancaires et Financières (CIPAF)[150]
titled 'Twenty Years' lists Mr Vaz as a director of General Mediterranean
Holding (UK) (Annex vii2a).
Further enquiries
647. In the course of this inquiry I asked Mr
Vaz in a letter of 19 June 2001[151]
the following:
"3. General Mediterranean
Holding
Please would you give
me a description of your relationship with this company or any
other company or body associated with it and let me know whether
they have provided you with any benefits of any kind at any time
from 1987 to date. If they have provided you with any benefits
please give a brief description with date and estimated value."
648. I also wrote to Baroness Falkender, Lord
Lamont and Lord Steel who had been, or are, directors of General
Mediterranean Holding or subsidiaries of General Mediterranean
Holding (Annex vii3). Lord Steel informed me that he had no knowledge
of director appointments to subsidiary companies of General Mediterranean
Holding. Lord Lamont also said he had no knowledge of Mr Vaz's
appointment (Annex vii4) but in a telephone call he suggested
I write to Mr Arif Husain, the Company Secretary, to obtain
this information. Lord Lamont said he would speak to the Company
Secretary and the Chairman of General Mediterranean Holding to
ensure I was provided with the details.
649. I wrote to Mr Husain (Annex vii5) and he
replied to my enquiries on 4 and 12 October 2001 (Annexes vii6
& vii7) as follows:
— Mr Vaz was offered
the directorship of General Mediterranean Holding (UK) Ltd on
26 January 1999 for an annual fee of US $20,000, based upon a
requirement to attend at least two board meetings a year;
— Mr Vaz accepted the directorship 'verbally'
on 13 April 1999 and resigned from the Board on 17 May 1999.
650. I wrote to Mr Husain again on 17 October
2001 (Annex vii8) to ask him:
"1. Why was there
a gap of almost three months from the offer of the directorship
on 26 January 1999 to the acceptance by Mr Vaz on 13 April 1999?
2. I have seen that Mr Vaz is listed as a
director in the published Annual Report of General Mediterranean
Holding SA as a director of the UK Holdings Company for 1998 and
in the Annual Report of Compagnie Internationale de Participations
Bancaires et Financières (CIPAF) Mr Vaz is listed as a
director of General Mediterranean Holding (UK) for 1999.
Please would you explain why the company provided
these listings for these years if no offer of any directorship
was made before January 1999 and it was only accepted on 13 April
1999?
3. Please would you send me a copy of the
annual reports for both bodies for 1996 and 1997."
651. Mr Husain replied on 24 October 2001 (Annex
vii9) to say:
"1. Only Mr Vaz
can answer the question as to why he took three months to accept
the directorship of General Mediterranean Holding (UK) Ltd.
2. The directors listed in the annual report
of General Mediterranean Holding SA were current when the 1998
report went to print.
We are puzzled by your reference to Mr Vaz's name
allegedly appearing in the 1999 annual report of Compagnie Internationale
de Participations Bancaires et Financières SA (CIPAF).
This is not so.
3. We are enclosing the 1996 and 1997 accounts
of GMH SA, and the 1996 accounts of CIPAF SA."
652. I wrote again to Mr Husain on 30 October
2001 (Annex vii10). I asked him to let me know the date on which
the 1998 report on General Mediterranean Holding SA went to print.
I also said:
"I am now clear that
the report I was referring to from Compagnie Internationale de
Participations Bancaires et Financieres (CIPAF) which lists Mr
Vaz as a director of General Mediterranean Holding UK covers the
years 1978-1999. Please would you let me know the date of that
publication too.
To prevent you needing to send me any further
reports please would you confirm that Mr Vaz has at no time been
listed or recorded in any report as a director of any company
or subsidiary company of General Mediterranean Holding SA, General
Mediterranean Holding UK or CIPAF other than in the annual report
of General Mediterranean Holding SA 1998."
653. Mr Husain replied on 31 October 2001 (Annex
vii11):
"...to the best of
my recollection, the accounts of General Mediterranean Holding
SA went to print some time between Mr Vaz's acceptance and his
resignation..."
and
"...Turning to your question about benefits
to Mr Vaz, I can only speak for the companies in the General Mediterranean
Group and to the best of my knowledge, none of these has provided
any financial support or benefit to him."
654. Mr Husain also asked that I remove all reference
to CIPAF as the information held was incorrect.
655. I wrote to Mr Husain on 5 November 2001
as follows:
656. I also asked him to provide documentary
information to support his statement about the date on which the
General Mediterranean Holding Annual Report for 1998 went to the
printers.
657. Mr Husain replied on 6 November 2001 (Annex
vii12) saying:
"You refer to the
commemorative brochure of General Mediterranean Holding, which
was issued to mark its 20th anniversary. It is not a report. You
are right that it lists the name of Mr Vaz as a director of General
Mediterranean Holding (UK) Ltd. The reference to CIPAF or any
other group company is not relevant as these are totally separate
entities with their own Boards of Directors and operational executives.
The date the brochure went to print was 13 April 1999, after Mr
Vaz agreed that his name could be included as a director of General
Mediterranean Holding (UK) Ltd.
We would point out to you that General Mediterranean
Holding SA prints its consolidated annual report voluntarily and
not as a statutory requirement. The layout of the accounts in
skeleton form is usually set up as and when the information becomes
available. The go-ahead for the final print is only given after
the accountants have signed off their report. The accountants'
signing off date for 1998 was 1 July 1999 and as you will notice
from their report on page 6, they only comment on pages 7 to 21.
Any information before or after these pages is outside the scope
of their report. Mr Vaz's name on page 24 would seem to be an
oversight resulting from the aforementioned skeleton layout of
the 1998 report."
Other information
Mr Gray Kennady and Mr Martin Bright
658. On 23 August 2001 I was contacted
by Mr Gray Kennady, who had worked with the Chairman of General
Mediterranean Holding, Mr Nadhmi Shakir Auchi, from 1981 onwards.
Mr Kennady told me that he was concerned by some information which
had appeared in the press concerning Mr Vaz's involvement with
General Mediterranean Holding, as he believed it was inaccurate.
He said he wished to provide me with the facts.
659. Mr Kennady came to see me on 4 September
2001, accompanied for part of the time by Mr Martin Bright, a
journalist on The Observer. A transcript of our conversation,
confirmed as correct by Mr Kennady and Mr Bright, is attached
(Annex vii13).
660. Mr Kennady told me:
"...Why I reported
it is I read the Sunday Observer and there were errors there which
said Keith Vaz was offered, appointed, did not take it, took it,
all within a matter of five or six weeks in 1999, but I was aware
that he was a director a year before that.
MS FILKIN: A director of who?
MR KENNADY: A director of one of the companies.
MS FILKIN: I see. Which company?
MR KENNADY: General Mediterranean. I will give
you the documents to show you.
MS FILKIN: Yes."
"MS FILKIN: Was Mr
Vaz being paid as a director?
MR KENNADY: I cannot prove it but I have asked
the question and, yes, he was paid and the amount quoted to me
by people associated with those office premises was £50,000
to £60,000.
MS FILKIN: In 1999?
MR KENNADY: Per year.
MS FILKIN: I see.
MR KENNADY: Paid per year.
MS FILKIN: Who told you that?
MR KENNADY: Staff and other people who have connections
with the office."
"MR BRIGHT: You have
got the 1998 Annual Report there, that is key.
MR KENNADY: This is 1998.
MS FILKIN: Yes.
MR KENNADY: Keith Vaz is there.
MS FILKIN: Yes. My problem with it is his explanation
is that he was appointed but then he was appointed to his ministerial
post and he resigned and he was never paid for that.
MR KENNADY: This is 1998.
MS FILKIN: Yes, I know.
MR KENNADY: He was appointed in 1999, okay? They
claim that in 1999 the appointment and not accepting it was in
April/May 1999 or even June 1999. This is a brochure signed by
the Chairman, Nadhmi Auchi, but it is also supported by a qualification
letter from the auditors, July 1999.
MS FILKIN: Yes, that is 1999.
MR KENNADY: No, in 1999 the auditors are confirming
that these are the personnel in 1998.
MR BRIGHT: This is the difficult thing.
MS FILKIN: This is a problem about whether it
is a financial year or whether it is...
MR KENNADY: It says here December 15 1998."
"MR KENNADY: I suspect,
from my suspicions and from information, that he was there in
1997, even 1996.
MS FILKIN: Have you got any...
MR KENNADY: Nobody gives me 1997, 1997 is not
on the premises, it has suddenly gone off.
MR BRIGHT: The accounts?
MR KENNADY: The accounts, yes.
MS FILKIN: I will be able to get those from Companies
House if they have put them in.
MR BRIGHT: We have tried.
MR KENNADY: Now we have to be very careful. He
is a director in GMH (UK). There are two, Mrs Filkin, GMH (UK)
Ltd and there is GMH (SA) Luxembourg. Those two are very, very
misleading."
Mr C Panayides, Mr S M Gupte, Mr G Malone, Baroness
Falkender, Mr J Abdulla
661. To try to verify the information I had been
given I also wrote to others to whom I had been referred as having
connections with or information about, General Mediterranean Holding.
662. In their replies Mr Charles Panayides (Annex
vii14 [1 Nov]), Mr S M Gupte (Annex vii15 & 16 [2 & 10
Nov]), Mr Gerald Malone (Annex vii17) and Baroness Falkender (Annex
vii18 rec 26 Nov) all referred me to Mr Husain or said they had
no information. Mr Jinan Abdulla did not reply.
Mr Michael McGurgan
663. I also wrote to Mr Michael J McGurgan who
was until 31 August 2000 company accountant to several of the
UK subsidiaries of General Mediterranean Holding (UK) Ltd. Mr
McGurgan claimed in his letter of 6 November 2001 (Annex vii19)
that Mr Vaz had held no position with the company and that he
was not aware of any remuneration or benefits paid to Mr Vaz.
Mr Tom Sackville
664. I also wrote to Mr Tom Sackville (a former
Member of Parliament and formerly employed by General Mediterranean
Holding) and I interviewed him on 24 October 2001 (Annex vii20).
665. During our meeting Mr Sackville told me
that he had worked for the Auchi companies from September 1997
until September 1998, paid by General Mediterranean UK and also
by General Mediterranean Luxembourg.
666. He said that he:
"was aware, from
talk in the office, that money, during that period, was going
in some form to Vaz, but probably to some newspaper which was
being circulated around to ethnic communities, which I would have
thought was a very good way of paying an MP without him being
attacked. That is what the assumption was in the office."
667. Our exchange continued:
"MS FILKIN: When
you say "that period", do you mean from September '97?
MR SACKVILLE: It was certainly during that period
such payments were made.
MS FILKIN: You cannot remember when you first
heard?
MR SACKVILLE: No, no, because, you see, it would
all be talk and circulation around.
MS FILKIN: Yes, but at least between September
'97 and September '98?
MR SACKVILLE: Yes.
MS FILKIN: Some time during that period you were
aware?
MR SACKVILLE: Yes, I was aware of the fact that
he was supporting Vaz or some project of Vaz in some way. I do
not remember all the figures, but a few thousand pounds, I think.
MS FILKIN: When you say "a few thousand pounds"
...
MR SACKVILLE: Well, between 2 and 5, I should
think."
668. Later in our conversation the following
exchange occurred:
"MR SACKVILLE: ...You
can be sure he was paid then, when he became a director—not
very much, but he would have been paid—but the payment I
am talking about, was for some front organisation, he may well
have earned that, because it may have been that any sponsorship
that came in went straight to him, it is possible.
MS FILKIN: Would you know of anyone else in the
company at that time, or who worked in the company at that time
and has now left, who could confirm that?
MR SACKVILLE: This is why I wanted to talk to
you, because most of those people are very junior people who would
have been terrified."
669. And subsequently, the following line of
questioning ensued:
"MR SACKVILLE: ...I
tell you what it has to be. It was advertisements, that is right.
General Mediterranean, or one of the companies, possibly Toucan
Investments which you may have come across also, used to take
ads.
MS FILKIN: And this was not to support Mr Vaz's
calendar?
MR SACKVILLE: You see, I do not know what the
publication was.
MS FILKIN: Yes. Well there is a calendar that
did have advertisements. Obviously some payments were paying for
those advertisements.
MR SACKVILLE: Yes, it is quite possible, quite
possible.
MS FILKIN: But you do not know?
MR SACKVILLE: They were more like, if I remember,
a newsletter or a newspaper than a calendar, a single sheet."
Mr N S Auchi
670. On 25 October 2001 I wrote to Mr N S Auchi,
the Chairman and Chief Executive of General Mediterranean Holding
(Annex vii21). I explained that I was trying to verify information
which had been provided to me about Mr Vaz's role in the company
and I invited him to see me.
671. On 29 October 2001 Mr Auchi wrote to me
(Annex vii22) saying that he had no other information to give
me other than that provided by Mr Husain. He said that in these
circumstances he did not feel that a meeting could be useful.
672. On 5 November 2001 I replied to Mr Auchi
(Annex vii23) to explain why I needed assistance over and above
that which had been provided by Mr Husain. I added that "None
of these questions implies in any way that any such support was
improper. My only interest in obtaining accurate information from
you about these matters is to verify information I have been given
by others and to allow me to decide whether Mr Vaz has fulfilled
his registration obligations to the House of Commons."
673. Mr Auchi provided his answers in a letter
dated 20 November 2001 (Annex vii24) which I set out below against
my questions:
"MS FILKIN: Have
you personally, or through any company, provided any support of
any kind, for Mr Vaz at any time?
MR AUCHI: No
MS FILKIN: Has Tucan Investments plc ever provided
support for Mr Vaz at any time or in any way?
MR AUCHI: No
MS FILKIN: During the year ended December 1997
I see that Tucan Investments plc made political donations of £3,000.
Was any such donation made to Mr Vaz, or to anybody associated
in any way with Mr Vaz, in 1997 or any other year?
MR AUCHI: This was not a donation to Mr Vaz and
none has been made to him. It is not possible to know who Mr Vaz
is associated with.
MS FILKIN: Are you aware of any other support
provided to Mr Vaz at any time by anybody or organisation?
MR AUCHI: No."
Mr Vaz's response
674. Mr Vaz replied to my questions about this
directorship in his letter dated 28 September 2001 as follows:
"My relationship
with General Mediterranean Holding is set out in correspondence
with the Registrar and I followed his written and oral advice
about registration. During the short time I served as a Director
I did not attend a Board Meeting, I did not take part in any decisions
nor did I participate in any company business, nor would I have
been aware of any relationships the company has. As far as I am
aware I have not received any benefits save that I attended a
celebratory dinner for the company with other Members from both
Houses of Parliament whom I know, including Lord Dholakia the
President of the Liberal Democrat Party and the Vice Chairman
of the Conservative Party."
675. On 19 October 2001 I wrote to Mr Vaz (See
Annex ii78). I said:
"G. General
Mediterranean Holding
You replied to my enquiries about this directorship
in your letter of 28 September 2001. As you suggested, I have
checked your correspondence with the then Registrar. A Register
entry was made on 19 May 1999 and you requested its removal on
20 May 1999 as you had resigned the directorship. This entry did
not appear in a published version of the Register.
I have also seen you are listed as a director
of the company for 1998 and 1999 in the Annual Reports of the
Company (see Annual Report of General Mediterranean Holding SA,
UK Holdings Company for 1998 and the Annual Report of Compagnie
Internationale de Participations Bancaires et Financières
(CIPAF), General Mediterranean Holding (UK) 1999).
I have also been informed that you were a director
in years prior to the publication of those reports.
Please would you let me know:
(i) The date on which it was proposed
to you that you should be a director?
(ii) The date on which a formal offer of
a directorship was made?
(iii) The proposed remuneration terms?
(iv) The date on which you accepted the offer?
(v) From the information I hold there
appears to have been a gap between the offer and acceptance. If
this is correct, please explain the gap.
(vi) Whether you have received any benefits
of any kind, at any time, associated in any way with Mr Auchi,
the Chairman of General Mediterranean Holding or any other associated
company. In particular, have you received any benefit from Tucan
Investments plc?"
676. Mr Vaz replied in his letter of 3 November
2001 (see Annex vi16) saying:
"135. In respect
of G, the summary you have set out concerning my directorship
of GMH is inaccurate. I was not responsible for the date it was
entered in the Register, or for its removal. The correspondence
does not indicate that I asked for it to be removed. This is a
matter for the Registrar.
136. I am not responsible for what is published
in Annual Reports. The company will have the precise information,
but here is my recollection:
137. (1) I recall I was offered the directorship
in January 1999 and (2) that I accepted it shortly before I wrote
to the Registrar, which would be in April. (3) I do not recall
the precise details, as I have never attended a board meeting
nor been involved in company business. (4) The gap between offer
and acceptance would be because of another offer I received from
a firm of solicitors, which, after seeking advice from the Law
Officers Department I turned down as I was the Parliamentary Private
Secretary the Law Officers, and the fact that I was in Oman during
this period. Other than the dinner which I have already described
I am not aware of receiving any benefits from Mr. Auchi. Your
question is phrased "associated in any way" I am not
aware of benefits from anyone associated with him. The phrase
you use is too wide to be of any practical use as I do not know
who would be regarded as being associated with any other individual.
I have not received any benefit from Tucan Investments plc."
150 CIPAF is a subsidiary of General Mediterranean
Holding. Back
151
Annex iv5. Back
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