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British Pub Confederation

 

New evidence shows Pubs Code Adjudicator Paul Newby “failed to accurately declare his interests and misled MPs”

The British Pub Confederation have disclosed new evidence (attached) showing Pubs Code Adjudicator Paul Newby failed to fully and accurately declare his interests when applying for the position, and later misled the Select Committee in statements over conflicts of interest. 

 

This new evidence is detailed in a letter from the British Pub Confederation to the Secretary of State for Business, Energy and Industrial Strategy (BEIS). The letter has also been sent to Peter Riddell (Commissioner for Public Appointments) and Iain Wright MP (Chair, Business Select Committee). This follows the recent recommendation from the Business Select Committee that Mr Newby must be replaced as he could not command the necessary confidence of tenants.

 

Furthermore, in a letter to the British Pub Confederation Secretary, Simon Clarke, the Commissioner for Public Appointments agreed there were failings in the voracity of the recruitment process, specifically regarding Mr Newby’s failure to accurately reflect his position at Fleurets, which the Confederation believe means the true nature of his conflicted position was not fully revealed to or examined by the panel which recommended his appointment.

 

The evidence shows how Mr Newby made statements to the Select Committee on the same matter which were misleading. 

 

Issue One: The letter shows how Companies House records demonstrate Mr Newby misled the Select Committee about the nature of his financial interests at Fleurets, when he told the committee: “The firm (Fleurets) went through a rearrangement several years ago where previous shareholding equity was converted into debenture shares, which is, in effect, a form of long term loan to the company” and “we converted old equity into debenture shares, a form of long term loan” and “In the operating company, I had…..a nominal shareholding and, on leaving the company those shares converted to non-voting and non-dividend bearing shares”.  – which he stated was “on the public record”. 

 

However documents lodged with Companies House show that at the time he made his statement to the Select Committee, his statement that he held a shareholding in the operating company (Fleurets Limited) was not true, as at the time the whole of the issued share capital in that company was held by the holding company, Fleurets Holdings Limited, in which he did have a holding of 100 A ordinary shares amounting to ownership of 12% of the company.

 

Issue Two: It is estimated that Mr Newby has outstanding loans to Fleurets to the value of £233,000. This is while Fleurets derives around a quarter of its income from the pubcos Mr Newby is now expected to regulate, and upon which Fleurets are dependent to survive and repay their loan to Mr Newby – a clear conflict of financial interest that will lead to a perception of bias.

 

Issue Three: Mr Newby has also sought to rely on the support of the Association of Licensed Multiple Retailers in evidence to the Business Select Committee without disclosing that Fleurets was until recently a member, and that further to this a Director of Fleurets was until recently a member of that organisation (as well as the fact that one of the large pub companies he now regulates is also a member of the ALMR).

 

Issue Four: The Commissioner for Public Appointments has made a veiled criticism of the process which led to Mr Newby’s appointment, and there are now questions as to whether Mr Newby deliberately withheld from the interviewing panel and those running the process the true nature of his financial links with Fleurets. Mr Newby told the Select Committee that his CV, submitted when applying for the role, described him as a director and shareholder at Fleurets. But in a letter, Peter Riddell, the Public Appointments Commissioner, says: “…the panel considered his application and his CV, which mentions Fleurets but only as a current employer.”  Mr Riddell goes on to say “In doing so, however, in my view it would have been better if they had specifically addressed the issue of Mr Newby’s role as a partner in Fleurets…”

 

Greg Mulholland MP, Chair of the British Pub Confederation, raised the matter in the House of Commons today (Tuesday 13th September) asking the Secretary of State “Following the recommendation from the Select Committee to remove Paul Newby as pubs adjudicator, new evidence has emerged that shows that he failed to properly declare his interests and also misled the Select Committee. He has so far refused to resign. Will the Secretary of State restore confidence in this post by now sacking him?”

 

Responding, Rt. Hon Greg Clark MP, Secretary of State for Business, Energy and Industrial Strategy, said he will look at the suggestion and the evidence that has been raised.

 

Commenting, Greg Mulholland MP, Chair of the British Pub Confederation said:

 

“It has always been clear that there was no confidence from tenants and tenants’ groups in the very ill-judged appointment of Paul Newby as Pubs Code Adjudicator and this was borne out in the recommendation of the Select Committee who have called for him to be replaced.

 

“Yet now new evidence has emerged that clearly shows that Mr Newby did not fully and accurately declare his interests and that he made misleading statements to the Select Committee on this very matter. This is a very serious matter and shows that he is not fit to be in this hugely important, quasi-judicial positon. Papers filed by Fleurets at Companies House show him to have outstanding loans to the company of around £233,000 and his being repaid this sum is dependent on income from the very companies he is now supposed to regulate. This is extraordinary and clearly untenable and not only will tenants not have confidence in Mr Newby, they will not be able to trust him either in the light of the new evidence that has come to light.

 

“So far Mr Newby has stubbornly refused to respond to key questions put to him by tenants’ groups and has failed to resign, even in the face of the Select Committee also deciding that he should go. So the new Secretary of State must now show leadership, accept that the recruitment of Mr Newby was a mistake, remove him and appoint someone who can have the confidence of all sides”. 

 

Inez Ward, from Justice for Licensees and Vice Chair of the British Pub Confederation, added:

 

“Justice for Licensees is concerned that honesty and transparency appears to have taken a back seat with the appointment of a surveyor who has clear conflicts of interest, we are disappointed that tenants’ concerns over conflicts of interest remain unresolved, this is unacceptable. Tenants want a truly independent Pubs Code Adjudicator and it should not be beyond the wit of Government to ensure that they deliver this.”

 

Dave Mountford from the Pubs Advisory Service also said:

 

“It was clear from the time of his announcement that Mr Newby’s previous position would mean he would be forever linked to the systematic manipulation of rental agreements that have contributed to the failure of the tied business model. Mr Newby’s Directorship of a Company reliant on money from the Pubco Model made his application bizarre and his appointment win nonsensical, especially considering the failure of self-regulation in part due to similar conflicts of interest. His recruitment was clearly lacking in due diligence and demonstrated a scant regard for the issues the industry has had and Government were trying to address.

 

“The slow and muddled response to the flagrant breaches in the application of the code have only reinforced the huge concerns that campaigners have had since Mr Newby’s appointment was announced.”

 


Tuesday 13th September 2016

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