Private Equity Capital Businesses

EDM number 1155 in 2008-09, proposed by Harry Cohen on 23/03/2009.
Categorised under the topic of Financial institutions.

That this House calls on the Financial Services Authority to require transparency of banks in their ongoing dealings with private equity capital enterprises; notes that the massive profits of these businesses were overwhelmingly derived from leverage using money borrowed from banks; is aware of the dismal business acumen of the banks in their dealings with these entities, but also that the enterprises' huge profits and asset acquisitions were substantially predicated on rising values and that in times, as now, of falling values, the amounts borrowed should still be paid back in full and on time; considers it very likely that banks are not calling in this debt on time, enabling private equity businesses, which have received extensive tax advantage and have paid far too little tax, if any at all on their profits, to avoid bankruptcy; further notes that they thereby retain their assets; considers that bankruptcy should be the natural result of their failure, and that they do not warrant any further special privileges; further considers that if they cannot pay up, they should rightly relinquish their unpaid-for assets to the banks, especially to those banks in which the taxpayer has a stake; and therefore calls on banks to provide a full account of their dealings with private equity to inform whether these private equity businesses have paid off their debts on time.

This motion has been signed by a total of 24 MPs.