UKFI IN TURMOIL AS CHIEF QUITS
UK FINANCIAL Investments (UKFI) announced the appointment of Sir David Cooksey as chairman yesterday but saw its grand unveiling overshadowed by the shock departure of chief executive John Kingman, who is stepping down to pursue a career in the private sector.
Kingman’s decision to leave UKFI less than a year after it was created to manage the government’s banking stakes means the organisation is now rudderless at a crucial time. The news was greeted with dismay in some quarters.
One top banker told Morning Wire: “I’m absolutely astonished. If you take on a job as important as that then you should see it through. He hasn’t done that.”
Sources close to UKFI said that Kingman had expressed his intention to step down whenever the time was right last year, during conversations with Treasury permanent secretary Nick MacPherson.
But the Liberal Democrats’ Vince Cable said Kingman’s departure had come at the worst possible moment. “It’s a bad time for him to leave, because the government is in danger of losing control of what’s happening in the banking system,” he said.
“The only person who knows where the skeletons in the closet are hidden has gone and whoever comes in will have less knowledge of what banks are up to,” he added.
Sources close to Kingman said the civil servant had already been inundated with calls from City headhunters, but added that he would stay on for a transitional period after a replacement is found.
Cooksey, who will earn £100,000 a year with no bonus, faces the task of delivering bank stakes back into the private sector, beginning when he takes over from acting chairman Glen Moreno on 1 August.
“The taxpayer has made a substantial investment in the banks… and I will be focused on protecting the value of those investments and disposing of them over time,” he said.
Cooksey is chairman of London & Continental Railways, which owns the British interest in Eurostar, and has a wealth of City experience having set up private equity house Advent Venture Partners.
UKFI said in its business plan for 2009/10 that £2.6m of its £4.5m budget for the year was earmarked for staff costs. But the chief executive’s salary of £143,000 will not be raised to attract candidates, according to the plan. UKFI also assumed responsibility yesterday for managing the government’s stake in Bradford & Bingley and said it was moving out of the Treasury into its own offices.