Minister `received pounds 2m bid for Red Star'
Tuesday 05 September 1995
Labour yesterday accused the Government of giving away the Red Star rail parcels business to a management buyout team despite having received an offer of pounds 2m from another consortium.
The sale of Red Star to the management buyout team led by John Holmes, the sales and marketing manager, for a nominal sum is expected to be finalised by Sir George Young, the Secretary of State for Transport, today.
Michael Meacher, the Labour Party's shadow transport secretary, said documents leaked to him showed that there were three other bidders for Red Star. One, Gamrail, a consortium including British Bus, is believed to have bid pounds 2m. The other two, Security Dispatch and a consortium led by Ivan Couchman, a former Red Star managing director, are also believed to have made positive bids.
In a letter to Peter Hetreed of the British Bus consortium, John Watts, the rail minister, says that "speed of sale" is the decisive factor.
Mr Meacher said: "This is a bad augury for other sales of parts of BR. Speed rather than value for the taxpayer seems to be the order of the day." Mr Meacher is to ask the Public Accounts Committee to investigate the sale.
Mr Meacher says that under the terms of the sale all historical and financial records of Red Star will be passed to the buyout team. He said: "These records include details of police and internal audit investigations into alleged corruption and mismanagement at the company."
He wants to ensure that these documents are made available to any PAC inquiry.
Although Red Star has made a loss for the past four years Labour argues this is because of a change in accounting procedures involving high charges for using trains and stations.
The buyout team is expected to announce that it wants to reduce the workforce from 650 staff to 220.
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