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John Kingman surprised the City today when he stood down as chief executive of UKFI, the body which looks after the Government's huge stakes in bailed-out banks.
Kingman will not be returning to his job as second in command at the Treasury having decided that he wants to move into the private sector.
The move raised eyebrows in the City and caused some alarm. Liberal Democrat shadow chancellor Vince Cable in particular expressed concern.
He said Kingman's departure was "very worrying" and raised questions about the Government's ability to "get a grip" on the part-nationalised banks.
"Kingman, who was the Treasury's representative, is leaving at a particularly sensitive time when it's clear the Government hasn't really got a grip on the banks," he said.
"This is the one person within the Treasury who knew where all the skeletons are buried, and knows what's going on," he added.
Kingman's year at UKFI, which holds the taxpayers' 70% stake in Royal Bank of Scotland and 43% of Lloyds as well as the whole of Northern Rock and Bradford & Bingley, saw him in regular conflict with his political masters.
He insisted Sir Victor Blank should lose his post as chairman of Lloyds and also made it clear he sees UKFI as a long-term investor offersing no quick fixes for the banks in which it owns shares or the Government, which would like to sell them for a profit quickly.
Kingman announced his departure as Sir David Cooksey was confirmed as the new chairman of UKFI. The veteran venture capitalist takes on the role at a fixed salary of £100,000 with no bonus or pension entitlement. He starts on 1 August.
"The taxpayer has made a substantial investment in the banks in order to preserve financial stability and I will focus on protecting the value of those investments and disposing of them over time," Cookson said.
Kingman was seconded to UKFI on his Treasury salary of £143,000 and can look forward to increasing that substantially once he moves into the City or corporate life.
That will be after a new chief executive has been found.
Cable also raised concerns about the financial experience of new chairman Cooksey. He warned that private equity, is "exactly the kind of thing that got us into trouble in the first place".
Cooksey said: "I am pleased to be taking on this important and challenging role.
"The taxpayer has made a substantial investment in the banks in order to preserve financial stability and I will be focused on protecting the value of those investments and disposing of them over time."
Reader views (1)
From various recent press reports, there appears to have been tensions between Government and the UKFI over the pace at which taxpayers' holdings might be realised for cash. The main driver in this seems to have been Government's desire to show some returns in time for the General Election and a preparedness to override UKFI concerns that realisation at the pace this would require would not give the taxpayer a proper return. Financial considerations ought to dictate the pace of realisation rather than politics, but given the Government's past record I doubt that this will occur. Is this why John Kimngman has gone?
- James Elliott, Eastbourne UK, 28/07/2009 16:33
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