CURRYING FAVOUR: MORE SLEAZE

'Cash for peerage' tycoon was asked to hide loan
by Rajeev Syal
http://www.timesonline.co.uk/article/0,,17129-2261059,00.html

A SENIOR Labour figure advised a businessman to hide the fact that he had lent £250,000 to the party after it had nominated him for a peerage, The Times has learnt.
Sir Gulam Noon, who lent Labour £250,000 last spring, declared the money on his official Lords nomination form, according to documents seen by this newspaper. However, a high- ranking Labour figure with close links to No 10, who has not been named, asked Sir Gulam to drop any mention of the loan after he had sent the form to Downing Street, Whitehall sources said.

The disclosure, which is being investigated by the police, appears to confirm suspicions that Downing Street and Labour were attempting to conceal the loan from the House of Lords Appointments Commission. It is the most astonishing development in the investigation into whether peerages were sold for political donations — the “cash-forpeerages” row.
The Times has also learnt that the Labour Party drew up new loan agreements for at least two of its millionaire donors after the story broke earlier this year. Police are in possession of both the new and old loan agreements. The first ones, drawn up in spring 2005, make no reference to a final repayment date. The second agreements set an 18-month period over which they must be repaid.

Labour denied yesterday the charge that it had amended the agreements. A spokesman said: “Suggestions that loan agreements were altered are absolute nonsense. Each agreement with each individual lender was agreed in writing ahead of any funds being provided. Any suggestion otherwise is simply false.”

A senior official refused to comment on the claims surrounding Sir Gulam.
Scotland Yard is investigating the documents to establish whether Labour later hoped to convert the loans to gifts, in exchange for peerages. A Downing Street spokesman said: “We cannot comment on an ongoing police inquiry”.
The scandal broke after Tony Blair nominated several big Labour supporters to the House of Lords after they had made £4 million in loans to the party. The property developer Sir David Garrard, the broker Barry Townsley, Chai Patel, the founder of the Priory clinic, and Sir Gulam were all recommended for peerages.
Police are looking into whether the 1925 Honours (Prevention of Abuses) Act and the 2000 Political Parties Elections and Referendums Act have been broken.
Sir Gulam, 70, known as the Curry King, has been a Labour supporter for 25 years. The Sunday Times Rich List puts his wealth at £65 million.
Contacted yesterday, Sir Gulam confirmed that he had originally declared the loan, but had been asked to change his form. “I have done nothing wrong — in fact, I thought I should declare the loan, so I tried to do so. When I was asked to withdraw it, I withdrew it. All of these records are with the police. As far as the loans agreements are concerned, Labour asked me to change the loan agreement, and so it was changed. Simple as that.”
Sir Gulam lent the party £250,000 in the weeks before last May’s general election after a request from senior Labour figures. He was nominated for a peerage by Downing Street last autumn. As a result he was sent a House of Lords’ nomination form that asked him to declare any donations he had made to the party.

On October 4 he filled in the form and by arrangement sent it to Richard Roscoe, the head of honours at Downing Street, sources said. There is no suggestion that Mr Roscoe was the official who asked for the loan to be omitted. Sir Gulam declared initially £221,177 of donations to Labour between 2000 and 2005, and the £250,000 loan. The next day he returned the form to No 10. He was then contacted by a top official who asked him to drop all references to the loan.
Sir Gulam sent an amended form to Mr Roscoe omitting details of the loan. This was then sent to the House of Lords, sources said. Sir Gulam’s nomination was blocked subsequently because of that failure to declare the loan.

Police have obtained copies of both nomination forms and are trying to establish whether anyone from No 10 or the Labour Party was trying to obscure the loan arrangement.
The implication is that Labour officials may have tried to conceal the loan because they hoped that it could be converted into a gift at some later stage. Police have been told that Sir Gulam relied on No 10 to forward his form to the House of Lords because he was a Downing Street nominee.
Detectives are also examining the two loans where the terms were changed in March. The original agreements were rolling loans for an initial 180-day term, with a new interest rate calculated for each subsequent 180-day term according to the Bank of England base rate.
The first agreements were signed by Matt Carter, then Labour’s general secretary.
A second agreement was then drawn up by Labour officials in March this year, it is alleged. This agreement rescheduled the loan to expire in the autumn of 2007. This was signed by Peter Watt, the present general secretary.
“What were Labour trying to do?” said the source. “Why ask a loyal friend of the party to obscure a genuine effort to declare a donation? Why then change the nature of the loan? The more the police look, the murkier it gets.”