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Former Co-op Bank chairman Paul Flowers arrested in drug inquiry Former Co-op Bank chairman Paul Flowers arrested in drug inquiry
(about 1 hour later)
Paul Flowers, the former chairman of the Co-operative Bank, has been arrested by West Yorkshire police in connection with an investigation into the supply of drugs.Paul Flowers, the former chairman of the Co-operative Bank, has been arrested by West Yorkshire police in connection with an investigation into the supply of drugs.
The 63-year-old Methodist minister was arrested late on Thursday evening and taken to a police station in West Yorkshire after he was filmed handing over cash to buy drugs.The 63-year-old Methodist minister was arrested late on Thursday evening and taken to a police station in West Yorkshire after he was filmed handing over cash to buy drugs.
West Yorkshire police would not identify the individual arrested, but said: "Late yesterday evening [November 21] officers from West Yorkshire police arrested a 63-year-old-man in the Merseyside area in connection with an ongoing drug supply investigation. He has been taken to a police station in West Yorkshire where detectives will continue their enquiries". West Yorkshire police would not identify the individual arrested, but said: "Late yesterday evening [21 November] officers from West Yorkshire police arrested a 63-year-old man in the Merseyside area in connection with an ongoing drug supply investigation. He has been taken to a police station in West Yorkshire where detectives will continue their inquiries."
The revelations about Flowers, who has been suspended indefinitely by the Methodist church, have sparked recriminations about the management of the troubled Co-op Bank, the way it was regulated and the role of politicians in encouraging the mutual organisation to expand.The revelations about Flowers, who has been suspended indefinitely by the Methodist church, have sparked recriminations about the management of the troubled Co-op Bank, the way it was regulated and the role of politicians in encouraging the mutual organisation to expand.
He left the position of chairman in June, just days before it emerged regulators had found a £1.5bn capital shortfall. At the same time he left the board of the Co-op Group, which owns the bank, as well as supermarkets, funeral homes and pharmacies. He left the position of chairman in June, just days before it emerged that regulators had found a £1.5bn capital shortfall. At the same time he left the board of the Co-op Group, which owns the bank as well as supermarkets, funeral homes and pharmacies.
It has now emerged that while he quit the bank to take responsibility for its unfolding problems, he resigned from the group board over concerns about his expenses. At the time of his departure, no reference to this concern was made, with the announcement only referring to him "stepping down".It has now emerged that while he quit the bank to take responsibility for its unfolding problems, he resigned from the group board over concerns about his expenses. At the time of his departure, no reference to this concern was made, with the announcement only referring to him "stepping down".
Following the Mail on Sunday report about Flowers paying for drugs and exchanging texts about drug use, the Lifeline Projects charity revealed that he resigned as a trustee in 2004, also after concerns about his expenses. Following the Mail on Sunday report about Flowers paying for drugs and exchanging texts about drug use, the Lifeline Projects charity revealed that he had resigned as a trustee in 2004, also after concerns about his expenses.
Flowers has made no further statement since Sunday, when he apologised and said he had done stupid and silly things since the loss of a family member and as a result of pressure of work. Flowers has made no further statement since Sunday, when he apologised and said he had done stupid and silly things since the loss of a family member and as a result of the pressure of work.
Len Wardle, who was the chairman of the Co-op Group but who quit this week, has said: "I would like to thank Paul Flowers for his three years' service as chair [of the bank]."Len Wardle, who was the chairman of the Co-op Group but who quit this week, has said: "I would like to thank Paul Flowers for his three years' service as chair [of the bank]."
Further details about the independent inquiry promised by the prime minister into what went wrong at the Co-op could come later on Friday. It will be one of many investigations into the bank. The Financial Conduct Authority has to decide whether to launch an enforcement investigation which could lead to fines and reprimands for individuals or the bank itself while it is already looking – with accountancy regulators – into disclosures made in this year's accounts about its financial strength. Further details about the independent inquiry promised by the prime minister into what went wrong at the Co-op could come later on Friday. It will be one of many investigations into the bank. The Financial Conduct Authority has to decide whether to launch an enforcement investigation, which could lead to fines and reprimands for individuals or the bank itself, while it is already looking – with accountancy regulators – into disclosures made in this year's accounts about its financial strength.
The Co-op Group continued to pay Flowers after his departure because he had been elected to his position on the board by the members of the organisation, which employs 100,000 people and has a presence in every postcode district in the UK. It has written to Flowers to ask him to pay back £31,000 of a £155,000 payment he was due to receive, and has blocked any further payments.The Co-op Group continued to pay Flowers after his departure because he had been elected to his position on the board by the members of the organisation, which employs 100,000 people and has a presence in every postcode district in the UK. It has written to Flowers to ask him to pay back £31,000 of a £155,000 payment he was due to receive, and has blocked any further payments.
Ed Balls, the shadow chancellor, has been facing criticism for accepting a £50,000 donation from the Co-op Group and for his support for the legislative changes which allowed the bank to merge with Britannia in 2009 – a deal now regarded as a major source of the losses at the bank. He has said he was proud to receive the donation. Ed Balls, the shadow chancellor, has been facing criticism for accepting a £50,000 donation from the Co-op Group and for his support for the legislative changes that allowed the bank to merge with Britannia in 2009 – a deal now regarded as a major source of the losses at the bank. He has said he was proud to receive the donation.
Labour MP John Mann, a member of the Treasury select committee, sought to put pressure on the Conservatives and any efforts made by ministers to encourage the bank to takeover branches from Lloyds Banking Group. That deal fell through earlier this year as the problems at Co-op Bank become apparent. The Labour MP John Mann, a member of the Treasury select committee, sought to put pressure on the Conservatives over any efforts made by ministers to encourage the bank to take over branches from Lloyds Banking Group. That deal fell through earlier this year as the problems at Co-op Bank become apparent.
Mann wants the committee to take control of the investigation that the government has promised into the Co-op and called on the Treasury to explain its role in the takeover of the Lloyds branches, know as Project Verde.Mann wants the committee to take control of the investigation that the government has promised into the Co-op and called on the Treasury to explain its role in the takeover of the Lloyds branches, know as Project Verde.
The Co-op Group is scrambling to find the £1.5bn and will cede control of 70% of the bank to bondholders, led by a two US hedge funds, under the terms of a complex restructuring currently under way. The Co-op Group is scrambling to find the £1.5bn and will cede control of 70% of the bank to bondholders, led by two US hedge funds, under the terms of a complex restructuring currently under way.
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