'Donations for honours' scam claims a corporate victim |
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Thu, 23 Mar 2006 18:10
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LONDON: Rod Aldridge, chairman of outsourcing company Capita Group Plc. resigned Thursday following revelation that he had advanced a 1-million-pound loan to the Labour Party.
In announcing his decision to step down, Aldridge said suggestions have been made that this loan has resulted in the company getting government contracts, "which are spurious".
"At present, the group's reputation is being questioned because of my personal decision to lend money to the Labour Party. As I have made clear, this was entirely my own decision as an individual, made in good faith as a long standing supporter of the Party," he said.
The 'donations for honours' scam had put the Labour Party and prime minister Tony Blair under tremendous pressure and the party was forced to reveal that it had accepted 14 million pounds in loans from 12 businessmen, some of whom were nominated for seats in the House of Lords. The party had clarified that the nominations and the loans were not linked.
Capita, confirming the loan, said Aldridge, who founded the company in 1984, is resigning as executive chairman and he would serve as non-executive chairman until the group's interim results at the end of July, in order to ensure a smooth transition to a successor.
The firm, which receives government contracts, notably runs London's traffic congestion-charging scheme.
Analysts were expecting Aldridge’s exit as he was planning to step down for long as the company has an efficient CEO in Paul Pindar.
Capita shares were down 3.3 per cent at 454-1/2 pence, the second-biggest fall on the FTSE-100 index and valuing the firm at about 2.9 billion pound.
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