Company run by top Tory gave £25,000 to support Conservatives against Remain candidates in general election

Experts suggest the donations were an inappropriate use of shareholders' money

James Moore
Chief Business Commentator
Tuesday 04 July 2017 18:28
Sir Vince Cable managed to defeat his Tory opponent
Sir Vince Cable managed to defeat his Tory opponent

The city company run by former Tory Party Treasurer Michael Spencer pumped £25,000 into the campaigns of five Conservative MPs in a bid to prevent the election of Remain-backing Liberal Democrat challengers, including leadership candidate Sir Vince Cable, The Independent can reveal.

NEX, which used to trade as ICAP, said that it paid £5,000 “to each of five potential MPs running against Liberal Democratic opponents who supported the ‘Remain campaign’" in its AGM circular.

The Independent understands that the five, who were not named by the company, were challenging sitting Conservatives with slim majorities.

Sir Vince was the most prominent among them. He was ultimately successful in winning back his Twickenham seat with a majority of 9,762 against Conservative Tania Mathias, who represented the constituency for just two years having won it in 2015 with a slim majority of 2,017.

While wealthy individuals, including Mr Spencer through his personal company IGPL, regularly make sizeable political donations, it has become extraordinarily rare for public companies to use their shareholders' cash for this purpose.

Voting advisor PIRC criticised the decision and urged investors to vote against authorising the company to make any future political donations as a result.

In a report into NEX, it said: “The company has made donations, which are deemed to be political during the year.

“The Group made political donations of £25,000 to support candidates for election to public office. This raises concerns about the potential donation which could be made by the company under this authority.”

PIRC said it viewed such donations as an inappropriate use of shareholders’ cash.

The company sought to explain its decision by pointing to the statement it made in its AGM circular. It said: “The board felt it extremely important that the UK government had a clear mandate for the country to negotiate the best possible deal for the UK, following the decision to leave the European Union, in order to ensure that the position of London as the financial centre of Europe is maintained.

“The board believes that these donations were in the best interests of the Company and its shareholders.”

However, it had, while trading as ICAP, informed its shareholders that “the directors have no present intention to make political donations but, because of the broad definitions of political donations and political expenditure contained within the Act, the directors consider it prudent to obtain this shareholder approval”.

Recent months have seen a string of high-profile city companies announcing plans to set up new headquarters in the EU and to relocate jobs there from London as a result of Brexit “uncertainty” and the Government’s hardline approach.

By quitting the EU single market, the May Government will strip financial firms of their ability to trade across the bloc unless they set up an EU subsidiary.

Dominic Cummings, the Vote Leave campaign director behind the now infamous claim that leaving the EU could see £350m a week pumped into the NHS, described the referendum as a “dumb idea” while warning that Brexit is shaping up to be a “guaranteed debacle”.

The Liberal Democrats went into the election opposing it, and promising Britain a second referendum amid increasing dismay at the way the Government has handled the process.

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