A senior Tory figure looks set to make a fortune from the sale of British mutual insurer LV to US private equity predators, the Daily Mail can reveal.
Malik Karim, co-treasurer of the Conservative Party, is founder and chief executive of Fenchurch Advisory, the investment bank advising LV on the £530million deal.
LV bosses are backing the takeover by Bain Capital – and using members' funds to force it through, though they refuse to reveal the costs. There is no obligation on them to do so. If the takeover were of a public company, the fees would have to be disclosed.
The deal is likely to prove highly lucrative for Fenchurch, with City sources estimating its fees could be worth more than £5million.
Malik Karim (pictured), co-treasurer of the Conservative Party, is founder and chief executive of Fenchurch Advisory, the investment bank advising LV on the £530million deal
As boss of the discreet investment bank, Mr Karim, who stepped up to his role in the party last month, is likely to be one of the biggest beneficiaries.
According to Companies House filings, Mr Karim was also a member of Ingenious Film Partners 2 between 2006 and 2011 – a controversial film investment scheme accused by HMRC of being a means of avoiding tax.
Mr Karim said he was advised to join the scheme by his financial adviser at the time and added: 'I have made all interim payments to HMRC as requested and will settle any remaining outstanding amounts once the matter is resolved.'
Other advisers set to make money from the sale of LV include lawyers at magic circle law firm Clifford Chance and spin doctors at City PR outfit FTI Consulting. It is thought the spoils shared by bankers, lawyers, PRs and other advisers could be close to £10million. When the AA was bought by private equity firms last year for less than Bain is spending on LV, fees to third parties were around £50million. The figure for the Bain deal is shrouded in secrecy – despite the fact the fees will be paid
