Keir Starmer aide to receive dividends from corporate advisory firm Hakluyt

Open Editor’s Digest for free

FT editor Rula Khalaf picks her favorite stories in this weekly newsletter.

Sir Keir Starmer’s top business aide will continue to receive dividend payments from his multimillion-dollar stake in corporate consultancy Hakluyt while in government, raising fresh concerns about potential conflicts of interest.

Varun Chandra, the group’s former managing partner, is still entitled to a “diminished dividend”, Hakloit said, and has so far given up only a quarter of his previous stake despite joining Starmer’s team in July.

In the year to June 2023, Chandra received more than £300,000 in dividends from the company, on top of a £2.1m salary, according to Financial Times calculations based on his latest accounts.

Hakluyt, founded by former MI6 operatives, boasts a “blue chip client base worldwide”, including 40 per cent of the world’s most valuable companies and more than 15 of the top 20 private equity firms.

Chandra, a former investment banker, was hired in July as Starmer’s Special Business Adviseracting as a key interlocutor between the Prime Minister and the corporate world.

At the time of the appointment, he held 454,000 ordinary shares in Hakluys, or just under 5 percent of the business.

Chandra sold 4,617 shares in August and another 108,968 in October, leaving him with 340,753 shares, or about three-quarters of his original holdings, according to previously unreported filings at Companies House.

Hakloit said that when Chandra left the company in July, he agreed to a “standard” buy-sell agreement to buy back his shares over time “at a fixed share price at the time.”

“He is entitled to a reduced dividend until his share buyback is completed, but he no longer has a voting or decision-making role in the firm.” He declined to elaborate on what the cut in dividend payments would mean.

Downing Street declined to say whether Chandra had received any dividends from Hakluyt while he was in government. Chandra did not immediately respond to a request for comment.

Special advisers are allowed to have financial interests, but they must be declared, according to the government rules of conduct.

Earlier this week, another Hakluyt colleague, Sir Olly Robbinshas been appointed as the new Permanent Secretary of the Foreign Affairs, Cooperation and Development Office (FCDO).

Robbins, who was also Britain’s chief Brexit negotiator, had a smaller stake than Chandra’s 5,814 ordinary shares and plans to sell all his shares back to Hakluyt, the company said.

“It will end soon,” Hakluth said. “He will not receive a dividend and he no longer has any voting or decision-making role in the firm.” Robbins declined to comment.

One of Chandra’s allies said the decision to sell his shares in phases was aimed at avoiding the company’s liquidity problems.

Hakluth made a net profit of £18.2m on turnover of £113m in June 2023, according to its latest report, and paid out a £6m dividend for the year.

Chandra also remains interested in the firm’s investment arm, Hakluyt Capital, according to people familiar with the matter.

Richard Holden, chief executive of Conservative shadow payments, said there were “serious problems” with Chandra’s interests.

“The complete lack of transparency about Mr Chandra’s business interests, and whether they affect his role in Downing Street, is deeply concerning and needs urgent and complete clarity,” he said.

“Sir Keir Starmer must force Mr Chandra to fully declare his interests and deliver the clarity and transparency he promised but has so far lacked in his government.”

Government officials said Chandra went through a thorough declarations of interest process to ensure any conflicts of interest were “properly managed and mitigated,” including disclaimers when necessary.

Chandra originally started his career as a junior investment banker at Lehman Brothers before its collapse in 2008.

He went on to help former Prime Minister Sir Tony Blair launch his consultancy business before joining Hakluyt in 2014, where he rose to become managing partner and de facto boss of the firm in 2019, aged just 34.

While running the consulting firm, he led the creation of San Francisco-based Hakluyt Capital, which raised nearly $50 million last June to invest in technology startups.