A £4 million pound loan is therefore quite a large risk for a small operation like Unity to make to a near insolvent organisation like Labour. It represents nearly a quarter of shareholders funds in the event of a default. That is not sound business practise. Guido has a few questions for Ian Morrison, Director of Credit Risk & Compliance at Unity:
- What security has he obtained for the trade union members and charities who have their funds at risk?
- Has a third-party guaranteed the loan? If so, who?
- Are they comfortably within the guidelines for capital adequacy? If so, by what margin?
- How does he evaluate the enterprise risk of such a relatively large** and risky loan?
Guido is having some difficulty getting a response from Unity.
How the workers pay for Cherie’s haircuts:*Important in this context that we recall how the government gave the unions a new back door subsidy of £11 million.
**£4 million is more than UTB’s total after tax profits for 2005.