Select Committee on Standards and Privileges Fifth Report

Analysis (vii)

(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


677.  During my examination of this allegation, I have been provided with the following information:

26 January 1999 Mr Vaz offered non-executive directorship of General Mediterranean Holding (UK Ltd) Annual fee $20,000
13 April 1999 Mr Vaz accepted offer 'verbally'
13 April 1999 Twenty Year Brochure for CIPAF which lists Mr Vaz as a director went to print
Sometime between
13 April and 17 May 1999 The accounts of General Mediterranean Holding SA which lists Mr Vaz as a director went to print
28 April 1999 Mr Vaz wrote to the then Registrar asking him to add to his Register entry under Remunerated Directorships "my [his] new Directorship which is with The General Mediterranean Group (non-executive)."
4 May 1999 The then Registrar replied asking him for details of the business of the General Mediterranean Group
17 May 1999 Mr Vaz provided the details to the then Registrar
17 May 1999 Mr Vaz was appointed Parliamentary Secretary in the Lord Chancellor's Department
17 May 1999 Mr Vaz resigned his non-executive directorship
20 May 1999 The then Registrar wrote to Mr Vaz with a copy of his amended Register entry, dated 19 May 1999, telling him it would appear in the next updated printout. This entry showed his directorship as being with "The General Mediterranean Group" and described it as investment holding company
20 May 1999 Mr Vaz informed the Registrar of his resignation from the non-executive directorship and the Registrar agreed to remove the entry
21 May 1999 Mr Vaz's Register printout was amended again and the then Registrar sent it to him confirming their conversation of 20 May 1999. The entry therefore showed no remunerated directorship
27 June 1999 Updated Register published
1 July 1999 The Annual Report and Accounts of General Mediterranean Holding SA show that on 1 July 1999 the accountants BDO Stoy Hayward signed off the accounts for 1998, which are included in the published report.

678.  Neither the company nor Mr Vaz has provided me with the documentary evidence in the form of board minutes, notification documents or correspondence which would verify these statements.

679.  Mr Vaz, in his letter of 3 November 2001, claimed that my summary was inaccurate. He states:

    "...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..."

680.  He also gave as his reason for his delay of three months in accepting the non-executive directorship that he had received another offer from a firm of solicitors.

The Rules relating to the Registration of Financial Interests

681.  Members of Parliament are obliged by the rules of the House of Commons to "notify changes in their registrable interests within four weeks of each change occurring". The Standards and Privileges Committee has underlined this requirement in a report, as follows: "Members are required to register any employment 'in which the Member has any pecuniary interests'."[152]

682.  Assuming that the date of 13 April 1999 for the 'verbal' acceptance is accurate, Mr Vaz was required to register his non-executive directorship within four weeks of accepting it—at the latest by 11 May 1999. He wrote to the Registrar to make the entry on 28 April 1999.

683.   I note that Mr Vaz's register entry was imprecise. I have received no information that Mr Vaz was ever appointed as a non-executive director of General Mediterranean Holding Group. Indeed Mr Auchi, the Finance Director and Lord Lamont take care to describe the General Mediterranean Group and General Mediterranean Holding SA (UK Ltd) as quite separate. In his letter of 21 September 2001 Lord Lamont described the relationship of the companies as follows:

    "I am a director of Compaigne Internationale de Participations Bancaires et Financieres (CIPAF) which is a subsidiary of General Mediterranean Holdings. I am not, and have not ever been, a director of General Mediterranean Holdings or any of its other subsidiaries."

684.  Lord Lamont also said "I have never come across Keith Vaz in any business relating to CIPAF or General Mediterranean Holdings."

685.  Lord Steel said in his letter dated 18 September 2001"What I can tell you is that the first I knew that Mr Vaz was a director of a subsidiary was when I read it in the company's annual report".

686.  There are, however, some aspects of this sequence of events which I do not feel are clear. I have been surprised that neither the company nor Mr Vaz has been able to provide me with any documentary records to support their account. I find it hard to believe that the company holds no board minutes, notification documents or correspondence which details an offer, acceptance, and appointment to a non-executive directorship. In addition, neither Mr Vaz nor the company have given a satisfactory explanation as to how the Annual Report and Accounts for General Mediterranean Holding SA for 1998 came to list Mr Vaz as a director of the UK Holding Company.

687.  According to Mr Vaz and General Mediterranean Holding Mr Vaz was not offered the directorship until January 1999 and did not accept it until April 1999. Therefore, they said, he was not a director in 1998.

688.  General Mediterranean Holding told me that the 1998 report went to print "sometime between Mr Vaz's acceptance and his resignation", ie 13 April 1999 and 17 May 1999.

689.  They added that the go-ahead for the final print was only given after the accountants had signed off their report, ie on 1 July 1999. They explained that "Mr Vaz's name on page 24 would seem to be an oversight".

690.  I can see that a mistake might have occurred in the short period from 13 April 1999 to 17 May 1999 but I find it hard to believe that the company did not check the proof of their Annual Report and Accounts for 1998 before publication, which must have been sometime after 1 July 1999.

691.  As the accounts were not signed off until 1 July 1999 I find it difficult to reconcile this date with the period within which, according to the company, the Annual Report and Accounts went to the printers—namely 13 April 1999 and 17 May 1999. If this was the correct period, I would have expected the company to have a copy of a covering letter or invoice which referred to the date in question but none has been offered to me.

692.  I also find it unconvincing that so many individuals, who were apparently board members or employees paid by companies within the General Mediterranean Group, say they have no knowledge of the offer to, or appointment of, Mr Vaz as a director of General Mediterranean Holding SA (UK Ltd). For example both Mr Gerald Malone and Dr Charles Panayides are also listed alongside Mr Vaz as directors of the General Mediterranean Holding UK Holding Company in the 1998 Annual Report and Accounts. They both said they could give me no information about the period Mr Vaz was a director or any remuneration agreed or paid to him.

693.  Both Mr Nadhmi Auchi, the Chairman of General Mediterranean Holding, and Mr Vaz have told me that no payment was made, or benefit provided, to Mr Vaz by General Mediterranean Holding or any associated company. I have been supplied with information by Mr Tom Sackville and Mr Gray Kennady, both of whom worked for periods for the General Mediterranean Group, who say that payments were made to Mr Vaz. The only documentary evidence which I have received are the 1998 Annual Report and Accounts and the Twenty Year brochure. Both the Company Secretary and Mr Vaz say that the 1998 Annual report which lists Mr Vaz as a director was a mistake.

152   HC (2000-01) 465. Back

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