Ex-Co-Op Bank Chairman Fined $890 for Having Cocaine, Meth
Paul Flowers, the former chairman of Co-Operative Bank Plc, was fined 525 pounds ($890) after pleading guilty to possession of cocaine, crystal meth and ketamine.
Flowers, a 63-year-old Methodist minister who was Co-Op Bank’s chairman from March 2010 until June of last year, admitted to the charges at a hearing in Leeds, England, today. He was arrested in November after he was filmed buying crack cocaine by a U.K. newspaper and charged by prosecutors last month.
Flowers apologized for his conduct in a statement after his arrest, saying there had been a death in the family and pressures related to the bank. Co-Operative Group Ltd., the lender’s parent, ceded control of the bank to bondholders in October to help plug a 1.5 billion-pound capital shortfall.
“His position in life has been difficult recently as a result of the interest in him and the story,” his lawyer, Richard Wright, said at the hearing.
Wright asked for Flowers to be sentenced today, his first court appearance, because of his age and the fact that he pleaded guilty at the first opportunity. Flowers’s mother died recently and he isn’t working, living on 510 pounds a month from his pension, Wright said.
Clare Stevens, the prosecutor, said Flowers was a man of good character. He admitted in interviews to investigators he had used cocaine for 18 months “to keep himself going.” He told them he had “very little experience of either crystal meth or ketamine,” Stevens said.
‘Deplorable Failures’
Regulators and the government are also investigating governance at Co-Op Bank.
Paul Myners, Co-Op Group’s senior independent non-executive director, published a report on his review into the company’s governance this morning. The group’s governance is “not fit for purpose,” and has featured “deplorable governance failures” that have led to its near-collapse, he said.
Myners recommended creating a qualified board with independent directors that could help ensure better oversight.
“Unless the Group takes urgent steps to reform its governance and generate sustainable economic value, it will run out of capital to support its business,” Myners said.
Source: bloomberg
