Scandal-hit CBI staves off collapse through emergency funding from group of banks after exodus of members following allegations of rape and sexual harassment
- The CBI has been granted a credit facility from a group of banks to stay afloat
- The business lobby was rocked by sexual harassment claims earlier this year
The scandal-hit Confederation of British Industry has been rescued by a group of banks after an exodus of members saw it brought to the brink of collapse.
The once-all powerful business lobby group has been brought low after a series of sexual harassment claims earlier this year led its CEO to resign.
The departure of boss Tony Danker in April was followed by the swift exit of many big-name clients, including insurance group Aviva and John Lewis, the department store and Waitrose group.
The self-styled ‘voice of businesses’ was forced to drop its annual meeting last week as it desperately sought to raise £3 million to keep its head above water over the next three weeks, The Times reports.
CBI CEO Rain Newton-Smith has managed to secure a revolving credit facility from a syndicate of banks to keep the business lobby group afloat
The once-powerful business lobby group has been brought low after a series of rape and sexual harassment claims earlier this year led its CEO to resign
READ MORE: Sexual misconduct claims are an existential threat to the CBI, writes ALEX BRUMMER
The CBI tried and failed to encourage members to stump up the cash.
Now, under the stewardship of current CEO Rain Newton-Smith, it has managed to secure a revolving credit facility from a syndicate of banks. The facility is described as a form of overdraft to allow short-term spending.
The banks involved in the deal are thought to include the ‘big four’ – Lloyds Banking Group, NatWest, HSBC and Barclays.
This weekend the CBI revealed it felt its finances were safe for the first time since the scandal broke.
‘We are satisfied that we have secured the financing necessary to overcome the short-term cashflow challenge and that the organisation remains in a strong medium-to-long-term position,’ the CBI said.
Over the coming week, it will lay out its policy ideas for the autumn statement.
In March, an expose by the the Guardian newspaper revealed it had been approached by more than a dozen women who claimed to be victims of various forms of sexual misconduct.
The group, which at its height claimed to represent 190,000 companies across the UK, launched an internal investigation.
CBI president Brian McBride said that the board and senior leaders felt ‘a collective sense of shame’ for having let down staff at the business group.
The body suspended its policy and membership activity in April after dozens of members said that they were leaving or suspending their interactions with the CBI.
Chancellor Jeremy Hunt went on to question the point of liaising with the CBI after it lost such a large proportion of its membership.
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