'pounds 6m payment' renews fat-cat row
Monday 27 November 1995
The Labour Party yesterday used an alleged pounds 6m payment to Ray McEnhill, former chief executive of the privatised coach group National Express, to reopen its attack on the Government's privatisation programme.
The money, said to have been paid by a former business associate, would make Mr McEnhill the wealthiest executive yet to emerge from the privatisation process. It is set to revive the storm over "fat cat" directors of former nationalised companies.
Alistair Darling, Labour's spokesman on the City, said: "I think the public will be astonished that there is so much cash floating around the privatised utilities. It confirms the suspicion that they were privatised at knock-down prices, rather than that they have been highly successful trading entities."
Mr McEnhill is said to have received the money last year as a "thank you present" from Dawson Williams, a former business partner. Mr Williams is now chairman of British Bus, the Salisbury-based bus group whose stock market flotation has been delayed by a Serious Fraud Office investigation into its bankers, Bank of Boston.
The two men, with Adam Mills, deputy chief executive of National Express, were the moving force behind a pounds 10m management buy-in at National Express in 1991. As part of their Drawlane group, National Express was turned round to profit and brought to the stock market in December 1992. But it was thought that certain bus interests acquired by Drawlane would not achieve the same rating as the National Express long-distance coach operations.
As a result, Mr Williams left his former partners, taking the Drawlane bus interests with him to form the basis of what became British Bus and Mr McEnhill gave up his stake in the company for "a few pounds".
Last year Mr Williams netted a profit of pounds 9m on selling part of his stake in British Bus to venture capitalists. He is thought to have made the pounds 6m payment to Mr McEnhill to thank him for standing by him in tougher times.
An adviser said yesterday it was "entirely within his character" for Mr Williams to make such gestures. It is understood that the transfer did not result from any written contract.
National Express had no comment to make yesterday about the payment to its former chief executive, which it said was "a personal matter between Mr McEnhill and Mr Williams".
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