Leader of Plaid Cymru Adam Price has called on the First Minister to undertaken an urgent review of the governance arrangements of the Development Bank of Wales after it emerged that its chief executive has made investments into two Welsh-based firms in a personal capacity.
During First Minister’s Questions Adam Price raised concerns after confirmation that the development bank’s boss, Giles Thorley, has made two equity investments into firms Zip World and Lovetovisit.
The development of Wales, which is the wholly-owned investment bank of the Welsh Government, confirmed that in the case of his investment into Lovetovisit Mr Thorley only informed his chairman Gareth Bullock after investing. They said colleagues are not required to obtain approval before undertaking personal investments, but are required to take all reasonable steps to identify and manage conflicts of interest. So, no rules were broken when Mr Thorley invested.
In the case of Zip World the development bank has been asked to clarify if Mr Thorley had prior board approval before investing. Before being appointed the firm’s chairman Mr Thorley did secure prior approval from the board as well as from the Welsh Government.
Mr Price asked the First Minister if he was “comfortable” with Mr Thorley, who had a total remuneration in the last financial year of £216,000, being able to make investments in firms in a personal capacity. He said a review of the bank’s governance arrangements was now needed to ensure they “meet people’s reasonable expectation that the public interest is neither overlapped or overridden by the private interest of individuals.”
Mr Drakeford responded: “I expect any chief executive or employee of an enterprise or agent of the Welsh Government to observe all the proprieties and the rules that are required of them. I am sure if the leader of Plaid Cymru is suggesting impropriety here, but if he is he should say so and then would we investigate that.”
Mr Price said: “Mr Thorley did seek board approval and also wrote the then Minister of the Economy before taking up his paid role as the chair of Zip World. Perhaps the First Minister could confirm whether Mr Thorley’s personal investment into Zip World was also subject to prior board approval. If it was then the question is clear, why was the same principle not applied to his investment in Cardiff-based start-up LoveToVisit?
"And can I ask you a fairly basic point of principle if it is stipulated that Mr Thorley, who is already amongst the highest paid employees of any publicly funded body in Wales, should not invest in companies using knowledge or networks he has acquired through his work with the development bank and wouldn’t you agree with me that it is not an assessment that Mr Thorley should be able to make effectively as judge and jury in his own case.
Most Read
Mr Drakeford said: “I certainly agree with the final point that where any person who is carrying out work on behalf of the public interest in Wales, and are in a publicly appointed position to do so, then they are bound by rule books which are not of their own making nor should they be the sole arbiter of whether they are complying with those rule books.
" I am not familiar with the detail of the decisions that are made by the chief executive of the development bank of Wales in the way that the leader of Plaid Cymru is. If there are specific concerns that ought to be investigated then they need to be brought to the attention of the government and they will then receive that attention.
Mr Price then asked: “Rhodri Morgan (the late former First Minister) was highly critical of senior leadership figures within the WDA having outside interests which gave rise to negative perceptions. He said ‘business does not just have to be done, it has to be seen to done which is well nigh on impossible when you have interlocking relationships.’ It is not enough to say that these matters are just for the board for example when this is a publicly-owned company with the Welsh Government as its sole shareholder.
"You amended the framework document which sets out as I understand the government’s expectations of the development bank in relation to governance. Can I ask that you publish that document along with the remit letter that you signed with the bank. And will you insist on a review of governance arrangements to ensure that they meet people’s reasonable expectation that the public interest is neither overlapped or overridden by the private interest of individuals to avoid some of the problems and perceptions that I have raised with you?”
Mr Drakeford said: “I certainly agree with the final proposition that Mr Price made. People should certainly not put themselves in that position and I am very well remember the views of the former First Minister on the WDA and its history and a number of its employees. It is the regular position of the Welsh Government to publish remit letters to organisations who we sponsor, but the Development Bank of Wales does deal in commercially sensitive areas where it is not always possible to put into the public domain the same level of information that is possible for bodies that don’t deal in those same areas.
" I am reluctant to give general commitments on the back of suggestions that I am not completely certain of the basis of them or indeed what is being alleged, but I will read very carefully the record of what has been said and of course if I think any action needs to be taken by the Welsh Government then that action will follow.”
Get business news direct to your inbox
There's no better time to stay up to date with economic and business news from your region. By signing up for our daily newsletters, email breaking news alerts and weekly round-ups from all the major sectors, you get our journalism direct by email. To sign up, find out more and see all of our newsletters, follow the link here
Don’t miss
On Mr Thorley’s investment into Lovetoviist the development bank said:” “Giles Thorley has been an active angel and SME investor for over 15 years with an interest in tech, hospitality and tourism. Earlier this year he completed a very small, passive seed investment into Lovetovisit.
"Colleagues are not required to obtain approval before undertaking personal investment but are required to take all reasonable steps to identify and manage conflicts of interest and in this instance, the chair of the board has been informed. The company has not applied for funding from the Development Bank of Wales.”