'Steelgate' ambassador guilty over insider deal

Richard Ralph, a former ambassador to Peru, became chairman of Monterrico Metals after he retired from the diplomatic service. When the company received a takeover bid from a Chinese consortium he asked a friend in London to buy him £30,000 worth of shares on his behalf secretly and "without delay".

The Financial Services Authority (FSA) made it clear today that if Ralph and his friend Filip Boyen had not full co-operated with the City watchdog it would "seriously have considered taking criminal proceedings".

Ralph, who was also previously Governor of the Falkland Islands, was fined £117,691 while Boyen was fined £81,982.

Ralph, 62, was also ambassador to Romania at the time of the Steelgate cash for contracts affair when then Prime Minister Tony Blair lobbied on behalf of Britain's richest man Lakshmi Mittal for him to buy the country's nationalised steel industry.

Ralph encouraged Blair to write to the Romanian government in support of Labour party donor Mittal's £300 million bid.

The ambassador was removed from Romania three months after his intervention in the steel sale and posted to Peru.

There he had close dealings with several British mining companies and on his retirement as ambassador in August 2006 became executive chairman of Monterrico Metals.

As chairman he became involved in takeover talks with the Chinese which began in October 2006 leading to an initial bid of 257.5p.

The next month the Chinese came back with an increased offer of 350p per share.

Ralph then contacted his friend Boyen, a Belgian businessman living in London, and, according to the FSA, disclosed he wanted to buy a substantial number of shares in the company promptly and clandestinely at about 250p.

Boyen bought 12.350 shares at £30,533 on behalf of Ralph and another £77,162 worth for himself between 29 January and 2 February 2007 at between 235p and 288p each.

The Chinese takeover bid was made public on 5 February and Boyen accepted the 350p a share offer making himself a profit of £29,482 and £12,691 for Ralph.

Margaret Cole, director of enforcement at the FSA, said Ralph voluntarily contacted the FSA and admitted to insider dealing after the watchdog launched an enquiry into suspicious dealings in the company's shares.