Taxpayers 'short-changed' over privatisation of defence firm
The British taxpayer could have gained “tens of millions” more from the privatisation of UK defence research firm QinetiQ, the National Audit Office (NAO) said today.
The spending watchdog also condemned the incentive scheme netting fortunes for QinetiQ’s senior management when private equity owner Carlyle floated the company in February 2006.
QinetiQ’s ten most senior managers gained £107.5m (€149.5m) following the move – a return of 19,990% for their £540,000 (€751,000) investment in shares – labelled “excessive” by the NAO.
Conservative MP Edward Leigh, chairman of the Commons Public Accounts Committee, said the taxpayer had been “short-changed”, while senior managers had “won the jackpot”.
Taxpayers have so far gained a net £576m (€800m) from Carlyle’s acquisition of a 37.5% stake in the former Ministry of Defence-owned business in February 2003, but NAO assistant auditor-general Jim Rickleton said it could have been “tens of millions” more.
Carlyle’s final price ended up £55m (€76.5m) lower than its £374m (€520m) bid after negotiations, and the watchdog criticised the MoD for hindering competition by appointing a preferred bidder while price-sensitive issues were unresolved.
