It doesn’t take a £1m chief to make state fund CDC fly
The controversial government funded Commonwealth Development Corporation, which invests taxpayer’s money into businesses in poverty-stricken emerging markets, saw a surge in the value of its stakes in the past year.
CDC’s critics say the fund should be spun off from taxpayer ownership and put on a commercial footing. Figures out last night showed its assets jumped by £200m to £2.8bn in the year to December 2012 as its investment portfolio leaped 17.4 per cent in value.
The period marked the first year of the tenure of its new chief executive Diana Noble. She replaced Richard Laing, who was criticised for one year receiving salary and bonuses totalling £1m. Amid attacks by ministers of “inflated remuneration” at CDC at the time, Ms Noble was hired on £250,000 salary plus a potential £40,000 bonus, for which she is likely to qualify this year.
Current CDC projects include a scrap metal plant in Kenya, a textile business in Bangladesh and an engineering business in India.
CDC’s success was reported by the Government body that looks after 20 state-owned businesses, including wholly owned or partial stakes in Channel 4, Eurostar, the Land Registry and the Met Office. Many are regularly touted as potential privatisation candidates. Their combinedannual turnover rose 4 per cent to £12.6bn – but most of that was thanks to the now-privatised Royal Mail.
Shareholder Executive (Shex), whose other public assets include the Royal Mint, Ordnance Survey and Companies House, said more than two thirds of the increase was accounted for by the performance of Royal Mail.
The Royal Mint had the largest downturn in revenues, falling 19 per cent, but Shex claimed “this was following an exceptionally successful year for the Commemorative Coin division in 2011-12”, the Queen’s Diamond Jubilee year.
Companies House and the Land Registry had a better year, increasing operating margins by more than 3 percentage points.
A total of eight businesses in the public portfolio declared dividends in the year to March, with the Government’s share adding up to £145m, a 26.4 per cent increase on last year. Both the Land Registry and Urenco, the uranium enrichment group which is also up for a £3bn privatisation, posted strong dividends. The taxpayer’s divi was up by more than 85 per cent in the 12 months.
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