Walker report calls for more disclosures by UK''s buyout firms

18 July 2007

Mumbai: Buyout firms should boost their transparency and disclose how much debt they use to acquire companies, according to a review commissioned by the industry to fend off government regulation of private equity funds.

International buyout firms should be more accessible to their employees, investors and the public, David Walker, a leading figure and former Bank of England director, said in a 50-page report.

He has criticised the private equity industry for secretive behaviour, but stopped short of saying that the controversial buyout bosses should disclose any details of their pay or taxes.

``Private equity needs to be more open,'''' said Walker, the Morgan Stanley banker who led the five-month review for the British Private Equity and Venture Capital Association, in a draft of his findings. Buyout firms have been "needlessly secretive, feeding suspicion and, in some cases, hostility,''" he added. "There is thus a major transparency and accountability gap to be filled."

Companies owned by buyout firms should publish annual accounts within four months of their fiscal year ends, instead of the nine months allowed under UK law, according to the review. He stopped short of recommending disclosure of how much dealmakers and executives at the companies are paid.

Buyout firms have announced $58 billion of takeovers of UK companies this year, drawing criticism from lawmakers and unions who say the industry is too secretive and cuts jobs. Walker is trying to head off legislation by starting voluntary rules on disclosure. He has warned that new legislation would create a ``mess.''''