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Capita boss quits amid Labour loans furore

Andy McCue silicon.com

Published: 23 Mar 2006 15:05 GMT

Capita founder and chairman Rod Aldridge is quitting over his £1m loan to the Labour Party, claiming it has led to "spurious" but damaging suggestions the company was awarded government contracts because of it.

Aldridge was named as one of 12 individuals who loaned a total of almost £14m to Labour's election fund last year without the knowledge of party treasurer Jack Dromey.

The secret loans did not break Electoral Commission guidelines because they were given at commercial rates and Aldridge said it was a "personal decision" as a Labour Party supporter to lend the £1m.

However Aldridge, who has led Capita since its foundation in 1984, announced today that he will step down immediately as executive chairman and serve as non-executive chairman until the group's interim results in July.

He maintained he had loaned the money to the Labour Party "in good faith" but said he is quitting to protect the reputation of Capita.

Aldridge said of the loan in a statement: "This was entirely my own decision as an individual, made in good faith as a long-standing supporter of the [Labour] Party. There have been suggestions that this loan has resulted in [Capita] being awarded government contracts. This is entirely spurious."

When he retires from the Capita board in July, Aldridge said he will pursue his interests in the field of education and creating opportunities for young people through his work in the voluntary sector and his charitable trust.

Capita's chief executive, Paul Pindar, said in a statement: "Rod has played a key role in establishing Capita as the leading service transformation partner to both public and private organisations across the UK. His dedication to improving the efficiency and quality of services in the UK is immense."