Keir Starmer aide to receive dividends from corporate advisory firm Hakluyt

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

Hakluyt said Varun Chandra, the group’s former managing partner, was still entitled to a “diluted dividend” and had so far disposed of 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 profits from the company, as well as a salary of £2.1m, according to Financial Times calculations based on its latest set of accounts.

Hakluyt – founded by former MI6 officers – boasts a client base of major corporations around the world, including 40 per cent of the world’s most valuable companies and more than 15 of the 20 largest private equity firms.

Chandra, a former investment banker, was appointed in July as Starmer’s special business adviser, acting as the prime minister’s main interlocutor and the corporate world.

He owned 454,000 Hakluyt common shares at the time of his appointment, or just under 5 percent of the company.

Chandra sold 4,617 shares in August and another 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 with Companies House.

When Chandra left the company in July, he agreed to a “standard” buy-sell agreement to buy back his shares over time “at the price determined by the then-current share price,” Hakluyt said.

She added: “He is entitled to receive reduced dividends until the repurchase of his shares is completed, but he no longer has any voting rights or decision-making role in the company.” She declined to detail what the reduction in dividend payments would mean.

Downing Street declined to say whether Chandra received dividends from Hakluyt while in government. Chandra did not immediately respond to a request for comment. Hakluyt declined to comment on whether dividends had been paid in the past six months.

Private consultants are allowed to have financial interests, but they must be declared, as stipulated by the government code of conduct.

Earlier this week, another Hakluyt partner, Sir Olly Robins, was appointed as the new Permanent Secretary of the Foreign, Commonwealth and Development Office (FCDO).

Robbins, who was also the UK’s chief Brexit negotiator, owns a smaller stake than Chandra’s 5,814 ordinary shares, and is in the process of selling all of his shares back to Hakluyt, the company said.

“This will be completed soon,” Hakluyt said. “He will not receive any profits – and he will no longer have any voting rights or decision-making role in the company.” Robbins declined to comment.

One of Chandra’s allies said the decision to sell back his shares in phases was aimed at avoiding liquidity problems for the company. The person said Chandra signed a stock purchase agreement and argued that amounted to a disposition of the shares.

Hakluyt made net profits of £18.2m in the year to June 2023, on sales of £113m, according to its latest set of published accounts. It paid a dividend of £6 million a year.

Chandra also continues to maintain an interest in the company’s investment arm, Hakluyt Capital, according to people familiar with the matter.

Richard Holden, the Tories’ director-general of pay, said there were “serious issues” over Chandra’s interests.

He said: “The complete lack of transparency about Mr Chandra’s business interests, and whether these impact on his role in Downing Street, is deeply worrying and needs urgent and full clarity.”

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

Government officials said Chandra went through a comprehensive process on declarations of interest to ensure that any conflicts of interest were “properly managed and mitigated,” including rejections where appropriate.

Chandra originally began 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 own consulting business before joining Hakluyt in 2014, where he enjoyed a dizzying rise, becoming managing partner and de facto head of the firm in 2019, aged just 34.

During his time leading the advisory firm, he led the creation of Hakluyt Capital, which raised about $50 million last June for investments in technology startups and which has an office in San Francisco.