From:
http://www.ft.com/cms/s/0/89ff6b1e-4204-11e6-b22f-79eb4891c97d.html#ixzz4DZdaWFZ9
July 4, 2016 8:31 pm
Leadsom forced to account for financial history
Martin Arnold, Banking Editor
Andrea Leadsom
Barclays gave Andrea Leadsom her first job. It also had a lasting impact on her politics — though not in a way the British bank might care to remember.
Mrs Leadsom, now a contender to become the next leader of the Conservative party and British prime minister, joined Barclays de Zoete Wedd, as its investment bank was then called, as a debt trader after graduating in political science from Warwick University in 1987.
A decade later she fell out with Bob Diamond after the swashbuckling American financier took charge of Barclays’ investment bank and pressed her to return to work full-time soon after she had given birth. By then a director in its financial institutions group, advising other banks on their finances, Mrs Leadsom left Barclays with a pay-off and went on to invest in buy-to-let properties in Oxford and Surrey.
Some former bosses at Barclays have suggested her recent political statements have exaggerated her roles at the bank. But her clash with the bank seemed to make a big impression: since entering politics she has set up a charity to support families struggling with the arrival of a new child and has campaigned regularly on the issue.
“I know, as a woman, how to succeed in a man’s world and how to fight the unfortunate prejudice that many working mums experience,” she said on Monday at the launch of her leadership campaign.
Back in 2012, Mrs Leadsom seized her chance to speak out against Barclays and Mr Diamond, laying into her former boss when he appeared before her and other MPs during the parliamentary inquiry into the Libor interest rate manipulation scandal.
Shortly before that appearance, Mr Diamond was fired following pressure from the governor of the Bank of England. Mrs Leadsom went on to become Treasury minister a couple of years later.
A senior financier who came across Mrs Leadsom on the parliamentary committee recalls an “obsession” with forcing banks to make their customers’ account numbers as portable as mobile phone numbers.
Despite being told that this would require the unpopular move of abolishing cheques, Mrs Leadsom kept pushing the idea as Treasury minister. “It is a bad omen if she ends up trying to negotiate a trade deal with Angela Merkel,” said the financier.
Mrs Leadsom is having to face questions raised by other events from her early career. Bandal, the company she and her husband Ben set up to invest in buy-to-let properties after she left Barclays, attracted adverse attention when she transferred some of its shares to a trust owned by her children, reportedly to avoid inheritance tax.
Furthermore, Bandal was financed with offshore loans from the Jersey arm of Kleinwort Benson, the private bank. This fuelled further questions over why she had chosen this form of loan, particularly when the Panama Papers scandal was putting the finances of politicians and others under the spotlight.
Using family trusts to avoid inheritance tax is standard practice for higher earners and there is no suggestion that Mrs Leadsom has done anything illegal.
She addressed the issue in her blog after being re-elected as an MP last year, saying: “We set up the company with £100, putting £24 of the shares into an onshore trust as our children were 0, 5 and 7 and therefore legally unable to own shares.”
While shares in Bandal have an accounting value of £1 each, the company has assets worth £1.6m at the end of 2015.
“The purpose was that the whole family would engage in — and learn from — running a small business,” she said, adding that “we had very little capital” and so raised a loan from Kleinwort Benson that was secured against the main family home. “As you may know, there is no tax advantage in borrowing money from offshore.”
Five years after her time as senior investment officer and head of corporate governance at City fund manager Invesco Perpetual from 1999 to 2009 the firm was fined £18.9m for regulatory breaches in a period that included her last year working there. A spokesman said she was not responsible for any wrongdoing.
Critics of her political judgment have also highlighted her links with Peter du Putron, the Guernsey-based hedge fund boss who is her brother-in-law, former employer and financial backer.
After leaving Barclays, Mrs Leadsom joined Mr du Putron’s hedge fund and worked as a managing director at Du Putron Fund Management, which has since been renamed Blue Rock Capital Management, from 1997 to 1999.
Mr du Putron, who is married to Mrs Leadsom’s sister Hayley, is a big donor to the Conservative party, giving it more than £600,000 in recent years.
After Mrs Leadsom was first elected as an MP in 2010, Mr du Putron helped to fund her parliamentary career by donating £70,000 over two years to pay the salary of a project manager and to cover printing costs for a campaign to reform the EU.
“The reason the donation became a ‘story’ is because my brother-in-law’s family come from the Channel Islands and have lived there for centuries,” Mrs Leadsom wrote in her blog. “I would like to reiterate that I have never evaded tax and have always declared all of my income.”