Blunkett's sons to keep shares in DNA company
By Andrew Pierce
THE shares at the centre of David Blunkett’s resignation from the Cabinet, which are predicted to rise in value from £15,000 to £300,000 within 12 months, will stay in a trust for his adult sons.
The Times has learnt that the trustees have decided that it would be a breach of their legal duty if they sold the shares back to the company DNA Bioscience.
Yet the day before he resigned as Work and Pensions Secretary last week Mr Blunkett promised to ask his sons to sell the shares back to the DNA testing company. In a written statement, he said that he had asked his sons to approve disposing of the shares to avoid “continuing misinterpretation of the position”.
Mr Blunkett bought the shares when he took a directorship with DNA Bioscience in April.
He resigned the directorship the day after Labour’s election victory when, as widely expected, he was brought back into the Cabinet. After taking advice from his Civil Servants he transferred the shares to his three sons and set up a trust in their name.
Mr Blunkett quit the Cabinet after admitting that he had breached the ministerial code three times by failing to inform the advisory committee on business appointments that he was taking up paid appointments as a backbencher after his first Cabinet resignation last December. Mr Blunkett yesterday declined to make any comment about the shares, insisting that they were a private matter.
DNA Bioscience, which is bidding to win contracts from public bodies such as the Child Support Agency, is expected to be floated on the Stock Exchange next year. City commentators have predicted that the £15,000 of shares, which are equivalent to three per cent of the value of the company, will be worth about £300,000 after flotation.
When Mr Blunkett resigned the management of DNA Bioscience stated publicly that it wanted the first refusal on the shares.
An associate of Mr Blunkett confirmed last night that the shares would not be sold. The associate added: “This is a private matter that David does not believe has any public interest.”
The associate insisted that Mr Blunkett was bound by trust law, which stipulated that the trustees had a duty to maximise the financial return for the intended beneficiaries. “If the trustees are going to fulfil their financial obligations they have a duty to keep the shares to maximise the return. The shares therefore will not be sold,” he said.
Mike Warburton, of Grant Thornton accountants, which specialises in trust law, said: “Trustees have to act in the interests of the beneficiary. But they normally take into account the views of the person who set up the trust.
“If Mr Blunkett’s sons felt that the trustees were acting against their best interests, they could sue them for breach of trust. However, it is rare for trustees to reject the wishes of the person who set up the trust.”
Mr Blunkett spent up to £100,000 on his battle with Kimberly Quinn, his married former lover, legally to confirm the paternity of their son William and to establish formal access to him. Mr Blunkett spent what would have been his legacy to his three adult sons. (AtW: perhaps next time he will think with his head, not dick)
David Davies, the Tory MP for Monmouth who lodged a complaint with the Parliamentary Commissioner over Mr Blunkett’s behaviour, said: “Mr Blunkett should never have bought the shares in the first place. But when he became a minister, two weeks after he bought them, he should have sold them back immediately to DNA Bioscience to avoid any risk of misinterpretation.”
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He was just misunderstood -- he meant his sons would gladly sell all shares... at profit after floatation
By Andrew Pierce
THE shares at the centre of David Blunkett’s resignation from the Cabinet, which are predicted to rise in value from £15,000 to £300,000 within 12 months, will stay in a trust for his adult sons.
The Times has learnt that the trustees have decided that it would be a breach of their legal duty if they sold the shares back to the company DNA Bioscience.
Yet the day before he resigned as Work and Pensions Secretary last week Mr Blunkett promised to ask his sons to sell the shares back to the DNA testing company. In a written statement, he said that he had asked his sons to approve disposing of the shares to avoid “continuing misinterpretation of the position”.
Mr Blunkett bought the shares when he took a directorship with DNA Bioscience in April.
He resigned the directorship the day after Labour’s election victory when, as widely expected, he was brought back into the Cabinet. After taking advice from his Civil Servants he transferred the shares to his three sons and set up a trust in their name.
Mr Blunkett quit the Cabinet after admitting that he had breached the ministerial code three times by failing to inform the advisory committee on business appointments that he was taking up paid appointments as a backbencher after his first Cabinet resignation last December. Mr Blunkett yesterday declined to make any comment about the shares, insisting that they were a private matter.
DNA Bioscience, which is bidding to win contracts from public bodies such as the Child Support Agency, is expected to be floated on the Stock Exchange next year. City commentators have predicted that the £15,000 of shares, which are equivalent to three per cent of the value of the company, will be worth about £300,000 after flotation.
When Mr Blunkett resigned the management of DNA Bioscience stated publicly that it wanted the first refusal on the shares.
An associate of Mr Blunkett confirmed last night that the shares would not be sold. The associate added: “This is a private matter that David does not believe has any public interest.”
The associate insisted that Mr Blunkett was bound by trust law, which stipulated that the trustees had a duty to maximise the financial return for the intended beneficiaries. “If the trustees are going to fulfil their financial obligations they have a duty to keep the shares to maximise the return. The shares therefore will not be sold,” he said.
Mike Warburton, of Grant Thornton accountants, which specialises in trust law, said: “Trustees have to act in the interests of the beneficiary. But they normally take into account the views of the person who set up the trust.
“If Mr Blunkett’s sons felt that the trustees were acting against their best interests, they could sue them for breach of trust. However, it is rare for trustees to reject the wishes of the person who set up the trust.”
Mr Blunkett spent up to £100,000 on his battle with Kimberly Quinn, his married former lover, legally to confirm the paternity of their son William and to establish formal access to him. Mr Blunkett spent what would have been his legacy to his three adult sons. (AtW: perhaps next time he will think with his head, not dick)
David Davies, the Tory MP for Monmouth who lodged a complaint with the Parliamentary Commissioner over Mr Blunkett’s behaviour, said: “Mr Blunkett should never have bought the shares in the first place. But when he became a minister, two weeks after he bought them, he should have sold them back immediately to DNA Bioscience to avoid any risk of misinterpretation.”
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He was just misunderstood -- he meant his sons would gladly sell all shares... at profit after floatation
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