Acompany run by Boris Johnson’s former adviser donated £20,000 to the Conservative Party at the same time that it secured government funding worth millions of pounds, openDemocracy can reveal.
Hydro Industries, a water technology firm, was awarded a “convertible loan” from the government’s Future Fund scheme last year, which was meant to help businesses “facing financing difficulties” due to the pandemic.
But in the same month, the company donated £20,000 to the Conservative Party.
In August this year, the loan was converted into equity shares reportedly worth £3.5m.
Hydro Industries has enjoyed a cosy relationship with the government in recent years, including invitations to Downing Street. It has given more than £70,000 to the Conservative Party since 2015, including last year’s £20,000 payment.
One of its directors, Guto Harri, was an adviser and spokesman for Boris Johnson from 2008 to 2012, when he was Mayor of London.
The Future Fund scheme saw the government invest £1.1bn in 1,190 companies, with 158 loans being converted into equity shares. But the value of each investment has been kept secret, with officials providing figures only when they have been released elsewhere.
Analysis by the Financial Times showed that almost half of the companies that received funding are based within five miles of Whitehall, while 87% of company directors are men.
The newspaper claimed the government failed to do commercial due diligence before investing, reporting that numerous companies have since gone into administration or liquidation without the loans converting to equity.
“The government has been widely criticised for refusing to come clean about who has benefitted from the Future Fund,” said Jolyon Maugham, the director of Good Law Project, which is taking legal action over Tory cronyism allegations.
“There are no good reasons for the secrecy – it is our money and we should be entitled to know who has received it. And the fact that large sums of public money are going to those with close links to the PM, and who give money to his party, adds to the miasma of sleaze around this government.”
Next week, Hydro Industries is set to be one of just 12 British ‘green’ tech companies to be showcased in front of an audience of potential investors at the Global Investment Summit. The event is hosted by the prime minister and supported by members of the royal family.
Last week, they were pictured with the prime minister again, at the Conservative Party conference in Manchester.
There are also questions over Johnson’s involvement in a $200m deal that Hydro Industries secured to build a water treatment plant to service an oil terminal on the coast of Egypt.
A press release from Hydro Industries says that Boris Johnson praised the company “during the signing of this contract at No.10, Downing Street”.
But a spokesperson for Number 10 flatly denied that Johnson had any involvement in the signing of the deal, adding that the prime minister had not held any private meetings with members of Hydro Industries.
Number 10 said that any suggestion of a conflict of interest or impropriety on Johnson’s part was categorically untrue.
Hydro Industries did not respond to a request to comment, but Harri has previously said he is “proud” to be involved with the company.
According to the website Voice.Wales, Harri said: “Hydro industries harnesses home-grown Welsh technology to clean up industrial waste, protect the environment and provide safe drinking water for some of the most disadvantaged people in the world. We also provide much needed high quality jobs for scientists, engineers and others in Llangennech. I am proud to be involved.”
Additional reporting: Marc Edwards
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