The next president of the Confederation of British Industry, Sir David Arculus has surprisingly resigned before taking up the leadership of Britain’s employers’ organization.
The reason? Severn Trent Water, the main subsidiary of the FTSE 100 water group Severn Trent that he chaired between 1998 and 2004, is under investigation by the Serious Fraud Office.
Severn Trent Water was recently £42m fine by the industry regulator, Ofwat, for supplying bad debt figures that were “either deliberately miscalculated or poorly supported”. As a result, Severn Trent Water’s customers have been overcharged.
Sir David’s plc board was exonerated of blame, but were criticized for its handling of the company’s internal investigation.
He has resigned ahead of the CBI issuing its own agreed statement later today; he feels he has done nothing wrong but does not want the CBI’s reputation being tarnished by any newspaper campaigns against him.
Educated at Oriel College, Oxford Sir David, whose first job was as a Voluntary Service Overseas teacher in the Falklands Islands, has also just stepped down as chairman of mobile group O2 following the takeover by Telefonica, the Spainish company.
Sir David, 60 in June, will continue to look for a FTSE 100 chairmanship. He lost out for the top job at Lloyds TSB and has turned down Trinity Mirror because he regarded it as a backwards step. In the meantime he is a non-executive director at Barclays Bank, and Pearson, the publishing group and he also remains on the Telefonica board.
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