Labour donor inquiry call

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The Independent Online
THE GOVERNMENT will be urged today to order an inquiry into the activities into one of Britain's most prominent Asian businessmen, who has given money to the Labour Party.

Nat Puri, whose wealth is estimated at pounds 85m, donated more than pounds 5,000 to Labour last year. He was also the biggest donor to Kenneth Clarke's Conservative leadership campaign, with a contribution of pounds 32,000.

As MPs debate the Neill report on party funding today, a Labour MP will raise allegations by workers at one of Mr Puri's factories that he has avoided investigation by financial watchdogs because of his links to politicians.

Phil Woolas, MP for Oldham East and Saddleworth, will table a motion seeking assurances that Mr Puri's donations are not connected to the failure of the regulatory authorities to investigate the running of the pension scheme for workers at a paper mill in his constituency.

The motion claims that women workers at the Fletcher's factory, part of Mr Puri's Melton Medes group, have been forced to sign new contracts "under threat of dismissal" increasing the age at which they can retire on full pensions from 60 to 65.

The motion recalls a previous controversy over the pension fund. In 1995, Mr Puri was barred from acting as an occupational fund trustee handling investments, as part of a court settlement after he was prosecuted by the Securities and Investments Board.

Melton Medes borrowed pounds 5m from the Fletcher's pension fund and later repaid the loans with shares in two companies in which Mr Puri had an interest. Shares in both firms fell in value and pensioners claimed they suffered a loss.

Mr Woolas, who has pressed unsuccessfully for a new inquiry into the pension fund, urges the Government "to use all its powers to ensure that the administration of the scheme is legal, fair and transparent". He has told Margaret McDonagh, Labour's general secretary: "The donation by Mr Puri to the Labour Party and to Kenneth Clarke ... is causing my constituents some concern ..."

Mr Puri was in the United States at the weekend and not available for comment.

James Philpotts, Melton Medes chief executive, dismissed the MP's concerns: "I don't understand what he is worried about; the fund is highly legal and transparent."

He added that the retirement age for women was being increased in order to comply with European law.