Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Sir Keir Starmer’s chief business aide will continue to receive dividend payments from his multimillion-pound stake in corporate advisory firm Hakluyt while in government, raising fresh concerns about potential conflicts of interest.
Varun Chandra, former managing partner at the group, is still entitled to “reduced dividends”, Hakluyt said, and has divested so far only a quarter of his previous stake despite having joined Starmer’s team in July.
In the year to June 2023 Chandra received over £300,000 in dividends from the company, on top of a salary of £2.1mn, according to Financial Times calculations based on its last set of accounts.
Hakluyt — founded by former MI6 officers — boasts a “blue-chip client base around the world”, 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 adviser on business, acting as a key interlocutor between the prime minister and the corporate world.
He owned 454,000 ordinary shares in Hakluyt at the time of his appointment, or just under 5 per cent of the business.
Chandra sold 4,617 shares in August and a further 108,968 shares in October, leaving him with 340,753 shares or about three-quarters of his original stake, according to a previously unreported filing at Companies House.
Hakluyt said that when Chandra left the company in July it had agreed a “standard” sale and purchase agreement to buy back his shares over time “fixed at the then-current share price”.
It added: “He is entitled to receive reduced dividends until the buyback of his shares is complete — but he no longer has any voting rights or decision-making role in the firm.” It declined to detail what the reduction in dividend payments meant.
Downing Street declined to say whether Chandra had received dividends from Hakluyt while he has been in government. Chandra did not immediately respond to a request for comment. Hakluyt declined to comment on whether a dividend had been paid in the past six months.
Special advisers are allowed to have financial interests but they have to be declared, according to the government’s code of conduct.
Earlier this week, another Hakluyt partner, Sir Olly Robbins, was appointed the new permanent secretary for the Foreign, Commonwealth and Development Office (FCDO).
Robbins, who was also the UK’s chief Brexit negotiator, held a smaller stake than Chandra’s of 5,814 ordinary shares, and is in the process of selling all his shares back to Hakluyt, the company said.
“This will be completed imminently,” Hakluyt said. “He will receive no dividends — and he also no longer has any voting rights or decision-making role in the firm.” Robbins declined to comment.
One ally of Chandra said the decision to phase the sell-back of his shares was intended to avoid liquidity issues for the company. The person said Chandra signed a share purchase agreement and argued that this amounted to disposing of the shares.
Hakluyt made £18.2mn in net profit in the year to June 2023, on turnover of £113mn, according to its last set of published accounts. It paid a £6mn dividend in the year.
Chandra also continues to hold an interest in the firm’s investment arm, Hakluyt Capital, according to people familiar with the matter.
Richard Holden, Conservative shadow paymaster-general, said there were “serious issues” about Chandra’s interests.
“The total lack of transparency on Mr Chandra’s business interests, and whether these influence his role at Downing Street, are deeply troubling and need urgent and complete clarity,” he said.
“Sir Keir Starmer must compel Mr Chandra to fully declare his interests and provide the clarity and transparency he promised but has been lacking in his government to date.”
Government officials said Chandra had gone through a thorough process on declarations of interest to make sure any conflicts of interest were “properly managed and mitigated”, including recusals where appropriate.
Chandra originally started his career as a junior investment banker at Lehman Brothers prior to its collapse in 2008.
He went on to help former prime minister Sir Tony Blair launch his own advisory business before joining Hakluyt in 2014, where he enjoyed a dizzying rise, becoming managing partner and de facto head of the company in 2019, aged just 34.
During his time leading the advisory firm, he spearheaded the creation of Hakluyt Capital, which raised around $50mn last June for investments in start-up tech companies and which has an office in San Francisco.
