Police urged to probe 'insider dealing' at business agency
The British government faced demands today to call in the police to probe a financial scandal in the North involving public funds and claims of insider trading.
The accusation was made by MPs in a devastating Public Accounts Committee report into conflicts of interest surrounding a husband and wife team of accountants, Teresa and Michael Townsley, who administered a fund for emerging small businesses.
The damning report said all seven principles of standards in public life were breached in the case.
Even though Teresa Townsley, a deputy chair of the former small business agency Local Enterprise Development Unit (LEDU) and her husband Michael have been the focus of a series of investigations, no criminal inquiries have taken place.
The couple ran accountancy firm MTF, which handled a fund for the Emerging Business Trust set up by LEDU and the International Fund to help new businesses.
As well as being LEDU’s deputy chair, Mrs Townsley was a member of the Emerging Business Trust’s board.
The report further said a number of companies which had a pre-existing relationship with MTF received money from the Trust, including two firms in which Mr Townsley was a shareholder.
Mr Townsley was appointed a director of one firm, Arcom, and purchased 10% of its shares for £2,500 (€3,690), at £1.08 (€1.59) a share, three weeks before the EBT Venture Fund agreed to purchase 10% of ordinary shares for £50,000 (€73,800) at a value of £19.49 (€28.77) a share and £20,000 (€29,520) worth of preference shares.
The Public Accounts Committee report said: “In our view Mr Townsley’s actions amount to insider trading.”
The committee expressed surprise that civil proceedings over the fast-tracking of an additional £25,000 (€36,900) loan through the Department of Trade and Industry to Arcom, which later went into liquidation, was also not considered.
Committee chairman Edward Leigh said people in the North had been badly let down by the failure of the Department of Enterprise, Trade and Investment in the province to address conflicts of interest and impropriety in the trust.
The Conservative MP said: “The Department and LEDU failed for years to take any action on the appalling conflict of public and private interests within the Emerging Business Trust, despite it happening under their very noses.
“The Department and LEDU should have recognised that this was an unimaginable set of conflicts and that public money should not have been invested in EBT while it continued.”
SDLP member of the Northern Ireland Assembly, John Dallat, said the report should not be allowed to gather dust because it required further investigation.
“The claim that there was inside trading by Mr Townsley should be referred to the Public Prosecution Service for an option on whether there should be a prosecution,” the East Derry MLA said.
“To be accused of breaching every one of the seven Nolan Principles of public life must be a huge embarrassment for those involved but it is even more serious for the damage it does to the credibility of the government departments that presided over this comedy of errors and abuses.”
