Brazen pair who are just hipper versions of ‘Fred the Shred’

By RUTH SUNDERLAND GROUP BUSINESS EDITOR

2022-11-20T08:00:00.0000000Z

2022-11-20T08:00:00.0000000Z

dmg media (UK)

https://mailonline.pressreader.com/article/281719798581796

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GREEDY energy bosses are behaving just as despicably as the bankers did in the financial crisis. The £6.5 billion tab being picked up by taxpayers for the collapse of Bulb is the biggest scandal to hit UK plc since the downfall of Royal Bank of Scotland (RBS). Yet the company’s founders, Hayden Wood and Amit Gudka, have shamelessly pranced away from the wreckage into lucrative new ventures. This brazen pair are no better than slightly hipper versions of RBS’s disgraced former boss Fred Goodwin. If there has been any lesson from the banking meltdown, it ought to be that these two must not be allowed to wriggle out of a debacle as rich men with little more than slapped wrists the way ‘Fred the Shred’ did. Bulb made Wood and Gudka multi-millionaires well before their 40th birthdays. They each extracted shares valued at £4million before things went so badly wrong – and even after the Government rescue, Wood was still paid £250,000 a year. The Government must recoup these grotesque sums on behalf of taxpayers. Fat chance, I imagine, that the pair will agree to pay back the money of their own accord, as they would if they had an iota of decency. The idea that they can simply segue into their next venture is unconscionable. It’s imperative that there is a full-scale investigation into Bulb’s failure and their role in it, along with a wider probe into other 20-plus defunct firms in the energy sector. The Insolvency Service should examine whether there was any wrongdoing or unfit conduct by Wood and Gudka that would warrant them being banned as directors. In the US, the authorities take a far tougher line. Meanwhile, there are other parallels with the banking crisis. When it came to energy companies, for example, watchdogs were so keen to encourage innovation and competition that they took a relaxed approach to regulation. Attention was focused purely on the belief that consumers were being ripped off by gas and electricity giants who were providing appalling service and high bills, and had an over-reliance on fossil fuels. That belief was correct. But too little care was taken to vet the shiny new operators boasting about supposed green credentials and cheaper charges. When the energy crisis hit, it became apparent some new companies did not have the financial resources to cope. Bulb, with 1.7 million customers, was too big for a rival to rescue – but too big as well for Ministers to allow it to fail. What’s more, the £6.5 billion estimated cost to taxpayers, nearly £230 per household, was disgracefully tucked away in the bowels of documents released alongside Thursday’s Autumn Statement. The Government-backed deal that saw Bulb rescued by Octopus is also opaque, with scant information on how much its bigger rival paid. We are similarly in the dark about how, when, or, indeed, whether any bailout money will be repaid. True, there is a profit-sharing agreement attached to the Octopus deal, designed to channel cash back into government coffers. Only one problem: neither Octopus nor Bulb has ever made a profit. The energy sector is rife with entrepreneurs such as Wood and Gudka. Prominent among them are the Octopus boss Greg Jackson, and the founder of OVO Group, Stephen Fitzpatrick. These two men run businesses which, between them, supply around ten million domestic energy customers. That is a huge responsibility. Yet, because Octopus and OVO are private companies, not listed on the stock market, we know far less than is desirable about their operations and finances. Shamefully, Ministers do not appear to have taken a proper grip on the wider issues in the industry, any more than they did on Bulb. Ed Miliband, the Shadow Climate Change Secretary, has lambasted the Conservatives for the ‘staggering’ costs being foisted on the British people. He’s right, though his criticism might have more force if his brother David did not sit on the advisory board of the venture capital firm that Hayden Wood has now joined. This time, unlike in the banking crisis, Ministers must come down hard on errant bosses and stop taxpayers being treated as fools.

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