City & Business: More digging please

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The Independent Online
The choice of Richard Budge as the Government's preferred buyer for the entire English coal industry is coming under increasing scrutiny. Last week, this newspaper set the ball rolling, revealing that he received questionable payments while he was a director of his family's private company.

Yesterday our sister paper the Independent described how he walked away with the crown jewels of the family business, leaving the worthless rump to go into receivership 10 months later - and its unsecured creditors to whistle for the pounds 65m it owed them.

Our report today that the Union of Democratic Mineworkers is set for confrontation with Mr Budge's RJB Mining hardly improves the picture. The UDM was part of a rival consortium bidding for two of the English coal regions and is in no mood to do Mr Budge any favours.

His financial advisers, BZW, will doubtless have sounded out RJB's largest shareholders before giving the Government comfort that it will be able to raise the necessary pounds 1.1bn in loans and equity to finance the bid. And he will no doubt be recruiting some heavyweights to the board to give it a bit more credibility. Even so, the financing will be a test of his mettle.

The privatisation of British Coal is not just any asset sale. Coal is still of strategic importance to this country. Mr Budge will have enormous power over communities where mines remain the core industry. There are also monopoly considerations, since he is buying virtually all the coal pits in England. And of course, public money is at stake.

Is he fit and proper to be given such power and responsibility? That's not clear. You could argue that most of the troubles at the old family firm should be laid at the door of his older brother Tony - eight years his senior. Whatever the case, he and his advisers, BZW, can expect a lot more probing before the nation's pits are delivered into his hands.

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