BBC chairman Richard Sharp made “significant errors of judgment” by failing to declare his role in an £800,000 loan to Boris Johnson, according to MPs.
In a damning report, parliament’s digital, culture, music and sport (DCMS) committee said Richard Sharp had “breached the standards expected of individuals applying for such public appointments”.
The committee said Sharp - who has donated £400,000 to the Tories in the past - should “consider the impact his omissions will have on trust in him, the BBC and the public appointments process”.
Labour said the report made his position as BBC chairman “increasingly untenable”.
Sharp apologised to the committee, as well as BBC staff for the “distraction” caused by the controversy.
A separate inquiry into Sharp’s appointment is also being carried out by top lawyer Adam Heppinstall KC.
The Sunday Times first reported last month that Canadian education entrepreneur Sam Blyth had agreed to act as guarantor of a £800,000 line of credit for his distant cousin Johnson when he was still prime minister.
A follow-up story in the same paper revealed that Sharp was approached by Blyth about the matter just weeks before he became BBC chairman.
The Sunday Times reported that Sharp met with Simon Case, the cabinet secretary, who told him to have nothing further to do with the matter.
Sharp became BBC chairman on a four-year term in February, 2021.
Following the Sunday Times’ revelations, Sharp was called to re-appear in front of the DCMS committee last month, and denied any wrongdoing.
In their report, the committee criticise Sharp for failing to raise the matter of Johnson’s loan with the panel which assessed his application to become BBC chair, or during his pre-appointment hearing in front of the committee in January, 2021.
Only Johnson himself “was fully aware of Mr Sharp’s potential conflict at the time the appointment was made,” the committee said.
The committee’s report, published today, said: “In deciding not to recuse himself from involvement in Sam Blyth’s loan to the then prime minister, nor to reveal his involvement to either this committee or the appointments panel, Mr Sharp decided to leave our committee without the full facts we required to make an informed judgment on his suitability as a candidate.
“There can be no question that Mr Sharp’s decision not to divulge his involvement in the loan guarantee denied this committee the opportunity to fulfil its scrutiny role when he appeared before it.”
The report went on: “Richard Sharp’s decisions, firstly to become involved in the facilitation of a loan to the then prime minister while at the same time applying for a job that was in that same person’s gift, and then to fail to disclose this material relationship, were significant errors of judgment, which undermine confidence in the public appointments process and could deter qualified individuals from applying for such posts.
“Mr Sharp’s failure to disclose his actions to the panel and the committee, although he believed this to be completely proper, constitute a breack of the standards expected of individuals applying for such public appointments.”
Damian Green, the committee’s acting chair, said: “The public appointments process can only work effectively if everyone is open and transparent, yet Richard Sharp chose not to tell either the appointment panel or our committee about his involvement in the facilitation of a loan to Boris Johnson.
“Such a significant error of judgment meant we were not in the full possession of the facts when we were required to rule on his suitability for the role of BBC chair.”
Shadow culture secretary Lucy Powell said: “This is a damming report which makes the BBC chair’s position increasingly untenable because it throws into serious doubt the impartiality and independence that is so fundamental to trust in the BBC.”
In a statement, a spokesperson for Sharp said: “Mr Sharp appreciates that there was information that the committee felt that it should have been
made aware of in his pre-appointment hearing. He regrets this and apologises.”
However, the spokesperson insisted Sharp “was never involved in the arrangement of a loan between Mr Blyth and Mr Johnson”.
He added: “Mr Sharp would like to apologise again to the BBC’s brilliant staff given the distraction it has caused.
“He is proud of the work the board has done driving positive change at the BBC over the last two years, and very much looks forward to continuing that work.”