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Sir Keir Starmer's chief business aide will continue to receive dividend payments from his multi-million pound stake in consultancy firm Hakluyt while in government, raising fresh concerns about a potential conflict of interest.
Varun Chandra, the group's former managing partner, still has the right to “reduce shares”, Hakluyt said, and has so far only been fired a quarter of his former stake despite joining Starmer's team in July.
In the year to June 2023 Chandra received more than £300,000 in dividends from the company, on top of a salary of £2.1mn, according to Financial Times calculations based on its latest set of accounts.
Hakluyt – founded by former MI6 officers – boasts a “global blue-chip client base”, including 40 percent 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 exclusive business advisoracting as the main intermediary between the prime minister and the federal government.
He owned 454,000 common shares in Hakluyt at the time of his appointment, or less than 5 percent of the business.
Chandra sold 4,617 shares in August and 108,968 shares in October, leaving him with 340,753 shares or about three-quarters of his original holding, according to a previously undisclosed filing at Companies House.
Hakluyt said when Chandra left the company in July he had agreed a “sale” and a buyback agreement to buy back his shares at a later date “fixed on the current share price”.
It added: “He is entitled to a reduced share until the buyout of his shares is completed – but he no longer has any voting rights or decision-making role in the firm.” He declined to say what the cut in dividend payments would mean.
Downing Street declined to say whether Chandra received shares from Hakluyt while in government. Chandra did not immediately respond to a request for comment. Hakluyt declined to comment on whether the dividend was paid six months ago.
Special advisers are allowed to have financial interests but must be declared, according to the government code of Conduct.
Earlier this week, another partner of Hakluyt's, Sir Olly RobbinsA new permanent secretary was appointed at the Foreign, Commonwealth and Development Office (FCDO).
Robbins, who was the UK's chief Brexit negotiator, holds a smaller stake than Chandra's 5,814 ordinary shares, and is in the process of selling all his shares to Hakluyt, the company said.
“This will be over quickly,” Hakluyt said. “He will not receive shares – and no longer has voting rights or a decision-making role in the firm.” Robbins declined to comment.
Another associate of Chandra said the decision to buy back his shares was made to prevent the company's financial problems. The person said Chandra had signed a share purchase agreement and argued that this was tantamount to disposing of shares.
Hakluyt made £18.2mn in net profit in the year to June 2023, on a turnover of £113mn, according to its last set of published accounts. It paid a dividend of £6mn a year.
Chandra continues to hold an interest in the firm's investment arm, Hakluyt Capital, according to people familiar with the matter.
Richard Holden, the Conservative shadow chief executive, said there were “serious problems” about Chandra's interests.
“The lack of transparency in Mr Chandra's business, whether or not this affects his role in Downing Street, is deeply troubling and requires an urgent and full explanation,” he said.
“Sir Keir Starmer must force Mr Chandra to fully declare his interests and provide the clarity and transparency he has promised but his government has so far failed to deliver.”
Government officials say Chandra has gone through a thorough process on declarations of interest to ensure any conflicts of interest are “properly managed and mitigated”, including recusing himself where appropriate.
Chandra initially started 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 phenomenal rise, becoming managing partner and head of the firm in 2019, aged just 34.
During his time at the head of the consulting firm, he led the creation of Hakluyt Capital, which raised about 50mn billion last June for investments in early technology companies and has an office in San Francisco.