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Sir Keir Starmer’s top business aide will continue to receive dividend payments from his multimillion-dollar stake in corporate advisory firm Hakluyt while in government, raising fresh concerns about potential conflicts of interest.
Varun Chandra, former managing partner at the group, is still entitled to a “reduced dividend”, Hakluyt said, and has so far divested only a quarter of his previous stake, despite joining Starmer’s team in July .
In the year to June 2023, Chandra received over £300,000 in dividends from the company, on top of a salary of £2.1m, according to Financial Times calculations based on her latest set of accounts.
Hakluyt – founded by former MI6 officers – boasts a “worldwide blue-chip client base”, including 40 per cent 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 adviser on business, acting as a key interlocutor between the prime minister and the corporate world.
He held 454,000 ordinary shares in Hakluyt at the time of his appointment, or just under 5 per cent of the business.
Chandra sold 4,617 shares in August and another 108,968 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, she had agreed to a “standard” sale and purchase agreement to buy his shares over time “fixed at the current share price”.
He added: “He is entitled to receive reduced dividends until the buyback of his shares is completed – but he no longer has any voting rights or decision-making role in the firm.” She declined to elaborate on what the cut in dividend payments would mean.
Downing Street declined to say whether Chandra had received dividends from Hakluyt while he was 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’s code of conduct.
Earlier this week, another Hakluyt partner, Sir Olly Robbins, was appointed the new permanent secretary for the Foreign, Commonwealth and Development Office (FCDO).
Robbins, who was also Britain’s chief Brexit negotiator, had a smaller stake than Chandra’s of 5,814 ordinary shares and is in the process of selling all his shares back to Hakluyt, the company said.
“This will be over immediately,” Hakluyt said. “He will receive no dividends – and also no longer has any voting rights or decision-making role in the firm.” Robbins declined to comment.
An ally of Chandra said the decision to gradually resell his shares was aimed at avoiding liquidity issues for the company. The person said Chandra signed a share purchase agreement and argued that this amounted to a disposal of the shares.
Hakluyt made £18.2m net profit in the year to June 2023, on turnover of £113m, according to the latest set of accounts published. It paid a dividend of £6 million a 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 shadow Conservative general, said there were “serious issues” about Chandra’s interests.
“The total lack of transparency about Mr Chandra’s business interests, and whether these affect his role in Downing Street, are deeply concerning and need urgent and full clarity,” he said.
“Sir Keir Starmer must force Mr Chandra to fully declare his interests and provide the clarity and transparency he promised but which his government has so far lacked.”
Government officials said Chandra had undergone a thorough declaration of interest process to ensure any conflicts of interest were “appropriately managed and mitigated”, including exemptions where appropriate.
Chandra first 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 set up his own consultancy business before joining Hakluyt in 2014, where he enjoyed meteoric rise, becoming managing partner and de facto head of the company in 2019, aged only 34 years old.
While running the advisory firm, he led the creation of Hakluyt Capital, which raised about $50 million last June for investments in tech startups and has an office in San Francisco.
