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| Qinetiq deal 'cost UK taxpayers' | Qinetiq deal 'cost UK taxpayers' |
| (about 1 hour later) | |
| UK taxpayers could have gained "more money" from the privatisation of defence research firm Qinetiq, the National Audit Office (NAO) has said. | UK taxpayers could have gained "more money" from the privatisation of defence research firm Qinetiq, the National Audit Office (NAO) has said. |
| While saying taxpayers could have gained "tens of millions" more, the NAO also condemned an incentive scheme that netted fortunes for Qinetiq's bosses. | While saying taxpayers could have gained "tens of millions" more, the NAO also condemned an incentive scheme that netted fortunes for Qinetiq's bosses. |
| The government defended the sale and said it was excellent value for money. | The government defended the sale and said it was excellent value for money. |
| But Lord Moonie, the minister behind the original sale to a US buyout firm, said that he had tried to delay it. | But Lord Moonie, the minister behind the original sale to a US buyout firm, said that he had tried to delay it. |
| He was a defence minister in 2003 when a third of Qinetiq was sold to the US private equity group, Carlyle, for £42m. | He was a defence minister in 2003 when a third of Qinetiq was sold to the US private equity group, Carlyle, for £42m. |
| Stock markets had slumped and Lord Moonie felt that the Ministry of Defence (MOD) would not receive a decent price for its shareholding, said BBC business editor Robert Peston. | Stock markets had slumped and Lord Moonie felt that the Ministry of Defence (MOD) would not receive a decent price for its shareholding, said BBC business editor Robert Peston. |
| But he was unable to resist Treasury pressure for the sale, Lord Moonie told the BBC. | But he was unable to resist Treasury pressure for the sale, Lord Moonie told the BBC. |
| "We were reluctant to proceed with the sale, but a combination of the Treasury and the fact we needed the money for items in our budget persuaded us to go on with it," said Lord Moonie. | "We were reluctant to proceed with the sale, but a combination of the Treasury and the fact we needed the money for items in our budget persuaded us to go on with it," said Lord Moonie. |
| 'Excessive' | 'Excessive' |
| Carlyle's one third of Qinetiq grew in value to £372m, giving it a nine-fold return on its money. | Carlyle's one third of Qinetiq grew in value to £372m, giving it a nine-fold return on its money. |
| Qinetiq's 10 most senior managers gained £107.5m after the move, a return of 19,990% for their total £540,000 investment in shares, a return labelled "excessive" by the NAO. | Qinetiq's 10 most senior managers gained £107.5m after the move, a return of 19,990% for their total £540,000 investment in shares, a return labelled "excessive" by the NAO. |
| This deal didn't sell the family silver; it gave it away Vince Cable MP | This deal didn't sell the family silver; it gave it away Vince Cable MP |
| Qinetiq's two most senior executives, chairman Sir John Chisholm and chief executive Graham Love, made spectacular gains. | Qinetiq's two most senior executives, chairman Sir John Chisholm and chief executive Graham Love, made spectacular gains. |
| Sir John invested £129,000 in the company and now has shares worth £23m. Graham Love turned £106,000 into £20m. | Sir John invested £129,000 in the company and now has shares worth £23m. Graham Love turned £106,000 into £20m. |
| Qinetiq's bosses were allowed to negotiate the terms of the incentive scheme with Carlyle while the private equity firm was bidding for the business, the NAO added. | Qinetiq's bosses were allowed to negotiate the terms of the incentive scheme with Carlyle while the private equity firm was bidding for the business, the NAO added. |
| Conservative MP Edward Leigh, chairman of the Commons Public Accounts Committee, said the taxpayer had been "short-changed" and that top Qinetiq managers had "won the jackpot". | Conservative MP Edward Leigh, chairman of the Commons Public Accounts Committee, said the taxpayer had been "short-changed" and that top Qinetiq managers had "won the jackpot". |
| The Liberal Democrats said the deal amounted to giving away "the family silver". | The Liberal Democrats said the deal amounted to giving away "the family silver". |
| The increase in value of Qinetiq as it moved into the private sector has actually generated very good returns for the taxpayer Robert Peston, BBC business editor href="http://www.bbc.co.uk/blogs/thereporters/robertpeston/2007/11/treasury_mugged_itself.html">Read Robert's thoughts in full class="" href="7108248">State agency to FTSE 250 | |
| Acting leader Vince Cable said: "It is completely unacceptable that the government has sold off a valuable national asset for a pittance, providing huge profits for the Carlyle group and the senior civil servants involved. | Acting leader Vince Cable said: "It is completely unacceptable that the government has sold off a valuable national asset for a pittance, providing huge profits for the Carlyle group and the senior civil servants involved. |
| "This deal didn't sell the family silver; it gave it away." | "This deal didn't sell the family silver; it gave it away." |
| Good value? | Good value? |
| But the Ministry of Defence has defended the deal. | But the Ministry of Defence has defended the deal. |
| "It has delivered excellent value for money, generating more than £800m for the taxpayer, while protecting UK defence and security interests," said Baroness Taylor, Minister for Defence Equipment and Support. | "It has delivered excellent value for money, generating more than £800m for the taxpayer, while protecting UK defence and security interests," said Baroness Taylor, Minister for Defence Equipment and Support. |
| She added that she is constrained by what she is allowed to say ahead of a hearing by the Public Accounts Committee in December. | She added that she is constrained by what she is allowed to say ahead of a hearing by the Public Accounts Committee in December. |
| Criticism of the deal will infuriate many business people, said the BBC's Peston. | Criticism of the deal will infuriate many business people, said the BBC's Peston. |
| "Although they acknowledge that Carlyle secured the stake at a great price, they point out that the MoD kept more than half of Qinetiq," he said. | "Although they acknowledge that Carlyle secured the stake at a great price, they point out that the MoD kept more than half of Qinetiq," he said. |
| "So the increase in value of Qinetiq as it moved into the private sector has actually generated very good returns for the taxpayer." | "So the increase in value of Qinetiq as it moved into the private sector has actually generated very good returns for the taxpayer." |