DERA sale - fraud of the century

#1
This would be beyond belief, if it wasn't for the fact that this incompetent mendacious government will roll over to enrich anyone in its clique or furthering its agenda. It should be called fraud or insider dealing and the civil servants in question are the sleazy disreputable antithesis of public service and integrity.

I did some work with DERA and Qinetiq before and after the sell-off, it was clear at the time that this was blatant asset-stripping designed to enrich a few snout-troughs and the Carlyle Group with a few pennies perhaps reaching the Treasury.


http://www.guardian.co.uk/military/story/0,,2214477,00.html
Auditors condemn rushed MoD sale that turned civil servants into multimillionaires

David Hencke, Westminster correspondent
Wednesday November 21, 2007
The Guardian


The Ministry of Defence will be severely criticised by the National Audit Office this week for allowing two senior civil servants to become multimillionaires in a rushed privatisation of the department's research arm.

The part-sale of QinetiQ was ordered by the Treasury in the late 1990s and led to government assets being snapped up by a US private equity company at an eighth of their value.

A report by the National Audit Office on the deal will condemn the incentives offered to officials for securing it, and the failure to get a decent price for the business. "The report will be highly critical of the whole process, in particular the over-incentives given to senior civil servants to privatise part of QinetiQ," a source with knowledge of the report said.

One of those who gave evidence to the NAO was Lord Gilbert, a former minister of procurement. Speaking to the Guardian before the report's publication he said he had warned that the sell-off was "a disaster in the making" that would damage the relationship between the UK and US.
He said: "At the time I told the defence secretary [Lord Robertson] this would be a bloody scandal but the Treasury under Gordon Brown insisted on selling a stake in the agency to cut the defence budget.

"What the Treasury did not understand was that both US research workers and British research workers funded from the public purse would resent the fruits of their work going to enrich individuals in a private company.

"This was damaging to the special relationship between Britain and the US and also raised questions about intelligence sharing because of US defence secrets being passed to a private company."

The report, to be published on Friday, will highlight how Sir John Chisholm, chairman of QinetiQ - and also chairman of the Medical Research Council - and Graham Love, the chief executive, turned investments of £129,000 and £108,000 into assets worth £22m and £18m respectively when the firm was floated in 2006.

A year later, Love, a motor-racing enthusiast who owns three vintage Jaguars, re-sold 2.9m shares for £6m. The directors made the huge profit in three years.

Today both men, who are still on the board of the defence technology company, own 20m shares between them.

At the same time Carlyle, the private equity group, which bought a stake in QinetiQ for £42m in 2003, was able to sell at a £300m profit three years later.

The deal, which allowed the company and the individual directors to make so much money, was approved by Lord Moonie, when he was defence minister, and drawn up at the time of the sale.

Sources close to the NAO said yesterday that auditors resisted attempts by the MoD to water down the report, which is thought to attack the generosity of the incentives given to top civil servants, the low price paid for the assets and the circumstances that led the Treasury to push for the sale. The faultlines will show in parts of the report where particular facts are highlighted as "in the view of the NAO" and contrary propositions as "the ministry's view".

The ministry's explanation is that the part-sale of QinetiQ to Carlyle and the incentives given to the directors released an enormous amount of undiscovered potential and increased the firm's value.

But this view is not shared by either Gilbert or Bruce George, former Labour chairman of the Commons defence committee. Gilbert said: " Frankly the money made by the leading civil servants was obscene. This is shown by the facts themselves. They did not contribute anything to the turnaround of the company, it was the work of the research staff that made the difference, but this was not acknowledged in the benefits.

"The more serious point - which I am not sure will be contained in the report - is the damage done to the special relationship between Britain and the US...the work exchanging British and US research work is the glue that binds it together. It is this, above all, that was damaged by a sale to a private company.

"At the time I managed to limit the scale of the sale, so that the Ministry of Defence still owns part of the company. But I was unable to stop it at the time. I am so furious about what happened that I try not to think about it too much."

George said yesterday that his defence committee had been highly critical of the proposed sale and could not see that it was justifiable. "At the time it became very clear that this sale was being driven by higher authorities than the Ministry of Defence," he said. "We were also aware that the US intelligence services were unhappy about this research arm being sold to a private company when we looked into it - but then we never heard anything more about it."
 
#2
Unfortunately,the higher ups at QinetiQ have already taken the money,and some have run away.The slaves,of course,got little or nothing.And Nu Labour are criticising hedge funds,for their opacity!! They have no shame,and neither does QinetiQ!! Money that could have been raised for the Armed Forces,from the sale,has been trousered by people,who dont give a flying f..k for the Armed Forces.
 
#3
Don't get me started on this one. However the slaves did get something depending on length of service etc.

As an organisation they are absoluteley useless and have turned a national asset and world class R&D organisation into a shambles. The senior management are useless, aided and abetted by former members of HM Forces.
 
#4
So, lets beat them at their own game and privitise a battalion or two? How about we put, say, the 2RRF on Ebay for starters? Split the profits equally?
 
#5
Man I really have to get my snoat in this trough.

Civil Service, local council, MP anything. I, like all of you I am sure, work my ass off and get shafted by all and sundry. If I sold of my integraty, guilt, humanity, pride and loyalty I could run for office and make me fortune.

My idea about becoming the Arrse's tame MP is looking better every day. Its a dam sight easyer than becomeing a civil servant.
 
#6
We all know what the Carlyle Group is, hardly a surprise the Treasury didn't object. Gordon Browns & Tony Blairs pension plan?
 
#7
armchair_jihad said:
We all know what the Carlyle Group is, hardly a surprise the Treasury didn't object. Gordon Browns & Tony Blairs pension plan?
Not far off the mark the Jihadist. Dont forget the other shareholders, GwB and his 'friends', also John (Im the only boy in history to run away from the circus to become an accountant) Major to name but a few.
Snouts in trough, in your own time, carry on.
 
#8
This really is not very difficult.

The original sale was a complete nonsense forced through at the behest of the Treasury (i.e Gordon Brown) with the primary objective to reduce the defence budget.

They therefore simply did not want to believe what they were being told about the potential value of the assets being sold off for a song. Hence the lousy deal struck and the vast profits made by others.

Some may now try to crow about the "value created" and the extra cash generated on the later part sale of the Government stake but that is just spin.

It is like trying to say you sold a part of your house to reduce running costs but did so for bugger all because you did not know what it was really worth. But then you claim that overall you did really well by selling a bit more at a realistic price later on. B0llocks: may have saved a few quid in running costs but simply got taken to the cleaners on the first sale and lost the embedded value forever.

A bad, short term benefit decision was made by Gordon Brown when other options were available. His minions then simply ran around to make sure it worked at any price. And guess what: it did!

Hardly surprising the NAO is going to rip them to shreds.
 
#9
Lets auction the lot off!
What am I bid for the Coldstream guards?
Not mine to sell but that does seem to be the theme!
 
#10
And this is the Government that may be in charge of 'Nationalising' Northern Rock. Don't think so!

Although on second thoughts what can I do about it??
 
#11
billyboy1 said:
And this is the Government that may be in charge of 'Nationalising' Northern Rock. Don't think so!

Although on second thoughts what can I do about it??
Create yourself a private equity company, offer HMG a 1/8 of what NR is valued at and Bob's your uncle, your away! :roll:

PS I volunteer to be some sort of irresponsible hanger on. My fee is a couple of million a year :D
 
#12
The fact that the pathetic excuse of an ex prime minister John Major made a killing on this sell-off is a scandal.

When this sort of thing happened under the Tories,liarbore made promises that this sort of thing would not happen under a liarbore administration.

It need not be said that Major's lot presided over a number of defence cutbacks in the ninties.

Major's holiday estate in Norfolk is guarded at taxpayers'expense(400 grand a year at last estimate).
 
#13
Uh what's John Major, and his country house even more so, got to do with any of this? From a quick search QunintiQ got amalgamated and then part sold off four years after Labour were elected as the government. So am I missing something or are you just having a random pop at the bloke because you didn't like him as Prime Minister?

Jockass said:
So, lets beat them at their own game and privitise a battalion or two? How about we put, say, the 2RRF on Ebay for starters? Split the profits equally?
Well apparently the Duke of Atholl is the only private person in the UK that's allowed to raise his own legal private army, the Atholl Highlanders. Why not get him to buy them and then rent them out as a Private Military Contractor? Hell, going on past form he could probably turn straight back around and hire them out to the government for five times the old cost under a Public-Private Partnership agreement. ;)
 
#14
Brick said:
Uh what's John Major, and his country house even more so, got to do with any of this? From a quick search QunintiQ got amalgamated and then part sold off four years after Labour were elected as the government. So am I missing something or are you just having a random pop at the bloke because you didn't like him as Prime Minister?
Major was part of the Carlyle Group ( a Director IIRC) which pumped money into DERA/Qinetiq and made a profit that would have embarrassed a Russian Oligarch.

However he is a cnut anyway and was the direct cause of the equipment debacle post Op GRANBY when the Britsh Army's kit arrived home in rag order because he wanted the troops out asp and didn't give them time to sort their equipment out prior to shipping it home.

And he shagged that old minger Edwin Currie.
 
#16
bobath said:
Man I really have to get my snoat in this trough.

Civil Service, local council, MP anything. I, like all of you I am sure, work my ass off and get shafted by all and sundry. If I sold of my integraty, guilt, humanity, pride and loyalty I could run for office and make me fortune.

My idea about becoming the Arrse's tame MP is looking better every day. Its a dam sight easyer than becomeing a civil servant.
I'm sorry 'pal', but 'my MP can spell and construct a sentence.

My MP has been congratulated:



"..... and thank you for being one of the least greedy MPs....."

Qineteq: 'Fraud of the Century''. Maybe. Certainly a disgusting sale of 'our' assets.
 
#17
"What the Treasury did not understand was that both US research workers and British research workers funded from the public purse would resent the fruits of their work going to enrich individuals in a private company.

"This was damaging to the special relationship between Britain and the US ..."
This kind of thing is the 'special relationship between Britain and the US.
 
#19
goodkurtz said:
"What the Treasury did not understand was that both US research workers and British research workers funded from the public purse would resent the fruits of their work going to enrich individuals in a private company.

"This was damaging to the special relationship between Britain and the US ..."
This kind of thing is the 'special relationship between Britain and the US.
Precisely.
 
#20
MrPVRd said:
This would be beyond belief, if it wasn't for the fact that this incompetent mendacious government will roll over to enrich anyone in its clique or furthering its agenda. It should be called fraud or insider dealing and the civil servants in question are the sleazy disreputable antithesis of public service and integrity.

I did some work with DERA and Qinetiq before and after the sell-off, it was clear at the time that this was blatant asset-stripping designed to enrich a few snout-troughs and the Carlyle Group with a few pennies perhaps reaching the Treasury.
It seems that someone agrees with you.

National Audit Office link
 

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