City investors are to challenge the Government's appointment of Derek Higgs to lead the post-Enron review of non-executive directors because of his controversial links with disgraced former minister Geoffrey Robinson. Leading City institutional investors question whether Mr Higgs, who was appointed three years ago by Gordon Brown to spearhead the Government's PFI programme, is the man best suited to instigate a corporate clean-up.
One leading investor, who said he was just one of many observers uneasy about Mr Higgs' dealings with the former Paymaster General, put it: "The Robinson connection makes one shiver slightly."
Mr Higgs, 57, and Mr Robinson are shareholders and directors of the troubled first division football club Coventry City, where Mr Robinson holds 31 per cent and Mr Higgs 10 per cent of the stock. Mr Higgs was also party to a controversial share deal executed by Mr Robinson's family trust Orion which reaped tax-free profits of almost pounds 200,000 for the then minister.
Documents filed at the club's head offices showed that in June 1997, five weeks after Tony Blair came to power, Orion Trust's trading arm, Craigavon, sold 5,568 Coventry City shares to Mr Higgs at a total cost of pounds 371,385.
The secret deal raised eyebrows because it allowed Mr Robinson to avoid capital gains tax on his profit, since Orion Trust was set up offshore, at a time when he was guiding government policy on clamping down on tax- avoidance vehicles.
The transaction also raised questions about Mr Robinson's influence over the pounds 1m Orion Trust while he was still a minister and officially barred from taking an active role. Plans to float Coventry City - since shelved - were expected at the time to prompt a tenfold increase in the …