News

In the UK, the furore over the role of private equity has continued for several months. It shows few signs of abating. One of the key criticisms has been the lack of transparency in private equity operations. In response to public anger, the British Venture Capital Association (BVCA) and a group of major p.e firms called upon Sir David Walker, a former City of London Banker, to review the adequacy of disclosure and transparency in private equity with a view to recommending a set of voluntary guidelines. His report was published on July 17 in the form of a consultative document. The report comments that private equity has become so consumed by winning deals that they “pay little attention to the wider context”. The growth of private equity in the UK “underscores the importance of measures to reduce the palpable visibility gap and the wider public suspicion of private equity that has come to be associated it”.

The report underscores that stakeholder groups such as employees, suppliers and customers, as well as the public interest more widely, have been “inadequately informed by the buyout end of private equity”. The thrust of the proposals, however, are aimed at producing “voluntary guidelines” and does not intend to “recommend any change in existing regulatory or legislative provisions on disclosure in the UK”.

The report has drawn a sharp response.

John Mc Fall, Chairman of the parliamentary committee investigating private equity in the UK, was reported as calling the paper a “damp squib”.

Paul Moloney of the GMB attacked the report and was quoted in the Financial Times as follows “this answers none of our questions. It is as much use as a chocolate fireguard“.

The report is now out for consultation with responses sought by October.

Meanwhile, the Global Unions continue their work to put private equity under the spotlight with a comprehensive work-plan through 2007 and 2008.



The report is available at the following address: http://walkerworkinggroup.com/files/walker_consultation_document.pdf