Labour questions suitability of RJB

Click to follow
The Independent Online
ROBIN COOK, the shadow Trade Secretary, yesterday queried the suitability of the Government's preferred bidder for most of British Coal, RJB Mining, as details emerged of a receiver's report into controversial payments made to RJB's founder, Richard Budge.

The Independent on Sunday reported yesterday that the receiver to AF Budge, a family company that went into administrative receivership in December 1992, filed a report to the DTI about payments made to Richard Budge while he was a director of that company.

Mr Cook said ministers had better be confident that the receiver's report had exonerated Mr Budge if they were going to sell him the bulk of the coal industry.

Mr Budge agreed to pay pounds 325,000 to the receiver without making any admission of liability. He told the Independent on Sunday that he had heard nothing from the DTI about the matter since and that he had not been charged with wrongdoing.

The DTI said: 'The department and its financial advisers (NM Rothschild) are aware of this matter. We see no reason why it should affect the credibility of the bid.'

BZW, RJB's adviser, said Mr Budge's suitability for taking a leading role in the restructured coal industry was unquestionable. 'We were satisfied of Mr Budge's suitability to run a public company at the time of the flotation (May 1993). Our confidence has been borne out since that time'.

But Mr Cook said: 'It's strange that the bulk of the British coal industry looks like passing into the hands of a company that only two years ago had negligible experience of deep mining and currently has a market capitalisation of only pounds 150m.

'With hindsight it looks very much that the company was formed in order to bid for British Coal, and who knows with what encouragement from ministers.'