- Commonwealth Development Corporation
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The Commonwealth Development Corporation, now known as CDC Group plc,[1] (formerly the Colonial Development Corporation) is a British development organisation owned by the UK Government.[2] CDC is a fund of funds, with net assets of US$4bn, and uses its own balance sheet to invest in private equity funds focused on the emerging markets of Asia, Africa and Latin America, with particular emphasis on South Asia and sub-Saharan Africa. The Shareholder Executive is responsible for CDC, on behalf of the Department for International Development.
The original Colonial Development Corporation was established in 1948 by Clement Attlee's post-war Labour government, to assist Commonwealth countries in the development of agriculture.[3] It was renamed the Commonwealth Development Corporation in 1963.[4]
In July 2004 CDC spun out an emerging markets private equity investment platform, Actis Capital. CDC remains an active sponsor of Actis's investment activities, committing the equivalent of 650 million U.S. dollars to the firm's third fund.[5]. Since its reorganisation in 2004 the taxpayer-owned organisation has grown in value from £1 billion to £2.8 billion and now invests in almost 1000 businesses in 70 developing countries. The businesses in which CDC invests employ almost a million people and pay over US$3 billion a year in taxes.
CDC has been the subject of extensive investigations by the magazine Private Eye, which devoted seven pages to criticising the organisation in September 2010. Amongst other allegations, Private Eye claims that CDC has moved away from financing beneficial international development towards seeking large profits from schemes that enrich CDC's managers while bringing little or no benefit to the poor; and that when Actis was spun out it was given an "implausibly low valuation".[6] The Actis deal has also been the subject of criticism by British politicians.[7][8]
On 12 October 2010, the Secretary of State for International Development, Andrew Mitchell announced to Parliament that the British Government will reconfigure CDC,[1][9] saying that whilst he applauded its financial success, it had also "become less directly engaged in serving the needs of development". On 22 October 2010 the International Development Committee announced that it is to conduct an inquiry into CDC to examine issues such as its effectiveness and possible reforms, including its abolition.[9] A Report was ppublished on 03 March, 2011 with the government's response delivered on 18 May, 2011. [10][11]
See also
References
- ^ a b "Written Ministerial Statements 12 October 2010". Hansard. http://www.publications.parliament.uk/pa/cm201011/cmhansrd/cm101012/wmstext/101012m0001.htm#10101247000014.
- ^ "Commonwealth Development Corporation: A report on the efficiency and costs of, and the service provided by, the Commonwealth Development Corporation". Competition Commission. June 1992. http://www.competition-commission.org.uk/rep_pub/reports/1992/320commonwealth.htm. Retrieved 2008-12-05.
- ^ "From aid agency to cash machine?". BBC File On 4. July 15, 2008. http://news.bbc.co.uk/1/hi/business/7505527.stm. Retrieved January 2, 2010.
- ^ Morton, Fred; Ramsay, Jeff; Mgadla, Part Themba (2008). "Colonial Development Corporation (CDC)". Historical Dictionary of Botswana. African Historical Dictionaries. 108 (4th ed.). Metuchen, New Jersey: Scarecrow Press. pp. 74–5. ISBN 978-0-8108-5467-3.
- ^ CDC commits $650m to Actis emerging markets funds. AltAssets, May 21, 2008
- ^ Richard Brooks (3 September 2010). "That's Rich". Private Eye (1270). The article states that the 60% of the business sold was valued at £373,000 in 2004; and that the National Audit Office valued the entire business in late 2007 at between £182m and £525m, a value which it later retracted but which nevertheless suggested a discrepancy.
- ^ Ned Temko (25 November 2007). "MPs blast 'incompetent' Brown over company sell-off". The Observer. http://www.guardian.co.uk/politics/2007/nov/25/uk.economy.
- ^ Gerry Northam (15 July 2008). "From aid agency to cash machine?". BBC File on 4. http://news.bbc.co.uk/1/hi/business/7505527.stm.
- ^ a b "Committee announces inquiry into the Future of CDC". Houses of Parliament. 22 October 2010. http://www.parliament.uk/business/committees/committees-a-z/commons-select/international-development-committee/news/committee-announces-inquiry-into-the-future-of-cdc/.
- ^ http://www.publications.parliament.uk/pa/cm201011/cmselect/cmintdev/607/607.pdf
- ^ http://www.publications.parliament.uk/pa/cm201012/cmselect/cmintdev/1045/1045.pdf
External links
Categories:- Department for International Development
- Government-owned companies in the United Kingdom
- Financial services companies of the United Kingdom
- United Kingdom company stubs
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