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Sir Keir Starmer’s top business associate will continue to receive dividend payments from his multimillion-dollar stake in corporate consultancy Hakluyt while in government, raising fresh concerns about potential conflicts of interest.
Varun Chandra, a former managing partner at the group, is still entitled to “diminished dividends”, Hakluyt said, and has so far given up only a quarter of his previous 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 £2.1m, according to calculations by the Financial Times based on the latest set of accounts.
Hakluyt — founded by ex-MI6 officers — boasts “a base of the wealthiest clients around the world”, 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 Special Business Adviserwho acts as a key interlocutor between the Prime Minister and the corporate world.
At the time of his appointment, he owned 454,000 Hakluyt ordinary shares or just under 5 percent of the business.
Chandra sold 4,617 shares in August and a further 108,968 shares in October, leaving him with 340,753 shares or about three-quarters of his original stake, according to a previously unreported filing at Companies House.
Hakluyt said that when Chandra left the company in July, he entered into a “standard” purchase agreement to buy back his shares over time “fixed at the then-current share price.”
It added: “He is entitled to reduced dividends until the buyback of his shares is completed – but he no longer has any voting rights or decision-making role in the company.” He declined to say what the cut in the dividend payment meant.
Downing Street declined to say whether Chandra received dividends from Hakluyt while in government. Chandra did not immediately respond to a request for comment. Hakluyt declined to comment on whether a dividend had been paid in the past six months.
Special advisers are allowed to have financial interests, but they must be declared, according to the government code of conduct.
Earlier this week, another Hakluyt partner, Sir Olly Robbinshas been appointed as the new Permanent Secretary of the Foreign, Commonwealth and Development Office (FCDO).
Robbins, who was also the UK’s chief Brexit negotiator, held a smaller stake than Chandra’s 5,814 ordinary shares, and is in the process of selling all his shares back to Hakluyt, the company said.
“This will be completed soon,” Hakluyt said. “He will receive no dividends – and also no longer has voting rights or a decision-making role in the company.” Robbins declined to comment.
An ally of Chandra said the decision to sell his shares gradually was intended to avoid the company’s liquidity problems. The person said Chandra had signed a stock purchase agreement and claimed it constituted a divestment of the shares.
Hakluyt made £18.2m in net profit in the year to June 2023, on turnover of £113m, according to the latest set of published financial statements. It paid out £6 million in dividends in the year.
Chandra also continues to have 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 questions” about Chandra’s interests.
“The complete lack of transparency of Mr Chandra’s business interests and the impact on his role in Downing Street are deeply concerning and require immediate and full clarification,” he said.
“Sir Keir Starmer must force Mr Chandra to fully declare his interests and deliver the clarity and transparency he promised but has lacked in his government to date.”
Government officials said Chandra went through a thorough declaration of interest process to ensure any conflicts of interest were “properly managed and mitigated”, including exemptions where necessary.
Chandra originally 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 consultancy business before joining Hakluyt in 2014, where he experienced a meteoric rise, becoming managing partner and de facto head of the firm in 2019, aged just 34.
While running the advisory firm, he spearheaded the creation of Hakluyt Capital, which last June raised about $50 million to invest in tech start-ups and has an office in San Francisco.
