Feb 5, 2023
Ex-Goldman BBC Chief Set for Grilling Over Boris Johnson Loan
(Bloomberg) -- Richard Sharp celebrates his 67th birthday on Wednesday. The day before might be less fun.
The former banker is set to be quizzed in Parliament on Tuesday about his involvement in helping arrange an £800,000 ($966,320) loan for then-Prime Minister Boris Johnson at the same time he was applying to be chairman of the BBC.
The session is likely to be an uncomfortable one for Sharp, a prominent Conservative donor who has given £400,000 to the party. His own judgment, the reputation of the BBC and even his relationship with the current prime minister, Rishi Sunak, who briefly worked at Goldman Sachs Group Inc. at the same time as Sharp, will all be in focus.
Sharp has said he did not act inappropriately over the Johnson loan. But Keir Starmer, leader of the opposition Labour Party, has already used the revelation against a Conservative Party still reeling from the ousting of Nadhim Zahawi as party chairman over his tax affairs.
The Tory Party is addicted to “sleaze and scandal,” Starmer said in Parliament this week.
Multimillionaire financier Sharp has appeared before the Digital, Culture, Media and Sport Committee before. In January 2021, he was questioned about whether he should get the BBC chairman’s job.
That time he responded to questions ranging from his ties to the Conservatives to how the public broadcaster should be funded. Sharp was emphatic in his denial that anyone in government had helped his application. “You hear about the position, you look at the website and you follow the website’s instructions,” Sharp told lawmakers.
MPs will want to know if Sharp misled them two years ago. The role is one of the UK’s most prestigious and candidates are expected to disclose any conflicts of interest. Sharp, who declined to comment, has denied there was any conflict of interest.
The scrutiny, triggered by reports in the Sunday Times, will focus on 2020, looking at the intertwining threads of Sharp’s role in helping the government’s emergency Covid efforts, his application to the BBC and Johnson’s own personal financial arrangements.
As Johnson battled to contain the pandemic, his own personal finances were under strain, according to media reports at the time. Canadian businessman Sam Blyth wanted to offer the prime minister financial assistance, according to the Sunday Times.
Blyth, a distant cousin of Johnson, raised the matter with Sharp, a friend, at a dinner in September 2020.
At the same time, Sharp was giving unpaid help to Johnson and Sunak over a range of Covid emergency schemes, including bank loans, arts funding and questions about support for Rolls-Royce Holdings Plc, a person familiar with the matter said, who asked not to be identified discussing private matters.
At a meeting with Johnson, Sharp mentioned that Blyth had expressed interest in helping him and asked if he could pass the matter to Simon Case, who runs the British civil service. Johnson said yes, the person said.
In Autumn 2020, Sharp applied for the BBC job. Sharp also contacted Case about Blyth’s offer.
“I went to him to avoid there being a conflict of interest,” Sharp has told the BBC. “I’m also comfortable that, as a result of my conversation with Simon Case, I avoided a conflict or a potential conflict.”
What was subsequently agreed was a loan facility of about £800,000, which was guaranteed by Blyth, according to the Sunday Times. Sharp has said he had no involvement after speaking to Case.
Blyth could not be reached for comment but has previously told the Sunday Times that the “support for Boris Johnson was very carefully put together and fully pre-approved by the Cabinet Secretary, Simon Case. There was no consideration taken or given beyond the commercial terms of the guarantee. The support was also less than has been reported and was not fully drawn down.”
Johnson’s spokesman has said that “Richard Sharp has never given any financial advice to Boris Johnson, nor has Mr Johnson sought any financial advice from him.”
People who know Sharp are surprised about the awkward situation he has got into. After studying Philosophy, Politics and Economics at Oxford University he embarked on a glittering 30-year career in the City. After joining Goldman Sachs in 1985, he rose to its uppermost ranks, becoming a partner in 1994.
It was there he first met Sunak, a junior analyst who briefly worked in his area of the bank. The disparity in their positions was great, but a lasting relationship emerged. Sharp has described himself as a mentor to Sunak, while the younger banker has turned to Sharp repeatedly for advice.
Sharp left Goldman in 2007 and dabbled with entrepreneurial ventures. Already a donor to the Conservative party, he supported Johnson’s 2008 London Mayor campaign. After Johnson won, Sharp joined his economic advisers panel.
Sharp took another public role in 2013, joining the Bank of England’s financial policy committee, which monitors potential risks to the financial system. His donations to the Conservative Party ceased, in line with civil service guidelines, according to the person familiar.
Sharp stepped down from the FPC in 2019 but as the pandemic spread in early 2020, Sunak — now Chancellor of the Exchequer — called on his former boss, leading to multiple meetings with the Treasury and also, although less frequently, with Johnson.
Another topic came up: Sharp’s interest in applying for the role of BBC chairman. David Clementi was standing down, with the change coming amid accusations that the BBC’s coverage of Brexit was biased towards remain views.
Sharp, who worked on media industry deals at Goldman and was also chairman of the Royal Academy of Arts for five years, had previously expressed interest in a non-executive role at the broadcaster, but was unsuccessful. He was to have more luck with the top job under Johnson as prime minister.
By late 2020, Sharp was being touted in the media as Johnson’s likely pick. The DCMS committee ultimately approved Sharp and he took up the role in February 2021.
Since then, Sharp is broadly seen as having worked constructively with Director General Tim Davie even as the broadcaster’s output and balance remains under close scrutiny. Sharp’s performance on Tuesday will draw a similarly intense spotlight.
--With assistance from Thomas Seal.
©2023 Bloomberg L.P.
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