Labour gave the House of Lords watchdog less than two days to vet a new investment minister despite her name being mentioned in complex fraud cases in British and US legal history.
Poppy Gustafsson, appointed to Sir Keir Starmer’s frontbench team in October, was seen as a surprise choice for the role at the time.
It has now emerged that her name was submitted for scrutiny to the House of Lords’ Appointment Commission (HOLAC) less than 48 hours before she was announced as the new minister for investment – and subsequently made a Labour Party peer a month later.
The revelation, first reported by Politico, has sparked fresh questions for the Labour leadership over whether Baroness Gustafsson, a former tech executive, received the full scrutiny required despite her complex legal past.
She was a witness in various court cases linked to Mike Lynch, a tech entrepreneur who was found liable for financial fraud in the UK 2022 but was cleared of multiple counts of fraud by an American court two years later.
Two months after he was acquitted, he died along with his daughter and six others, in a freak accident when his yacht sank off the coast of Sicily.
Ms Gustaffson had worked under Mr Lynch’s close confidant Sushovan Hussain at Autonomy, which was acquired by tech giant HP in 2011. But just over a year later, HP accused Mr Lynch and Mr Hussain of fraudulent practices, and took the step of writing off $5 billion of the acquisition’s value and referring the matter to the Serious Fraud Office.
Poppy Gustafsson (pictured), appointed to Sir Keir Starmer ’s frontbench team in October, was seen as a surprise choice for the role at the time
Prime Minister Keir Starmer, alongside Investment Minister Poppy Gustafsson, chairs the first Council of Nations and Regions, with First ministers of Scotland, Wales and Northern Ireland, and regional Mayors, at Queen Elizabeth House in Edinburgh, Scotland, Britain October 11, 2024
In the ongoing legal battles, the now-peer was asked to testify. Mr Hussain was sentenced to five years in prison.
There is no suggestion that Ms Gustafsson herself has been involved in any wrongdoing, nor was she directly accused of any of the cases.
She was appointed to her role after Benjamin Wegg-Prosser, the co-founder of lobbying firm Global Counsel, turned the government down.
This happened just three days before a flagship investment summit was due to take place, prompting questions over whether the announcement was rushed through.
Conservative Richard Holden, the shadow paymaster general, said: ‘Appointing ministers and giving individuals a life-long position in our legislature is a serious matter.
‘This is not a process for Sir Keir Starmer to play fast and loose with, especially when appointing someone who was involved in one of the biggest and most complex fraud cases in legal history that straddled the Atlantic.
‘It’s time for the prime minister to answer the serious questions hanging over this appointment.’
Susan Hawley, executive director of Spotlight on Corruption said: ‘It is long overdue for the House of Lords Appointment Commission to be given a statutory and independent role in screening and approving peerages.’
Poppy Gustafsson graduated with a BSc in Maths from Sheffield University. She drives a yellow Vespa
Ms Gustaffson had worked under Mike Lynch’s close confidant Sushovan Hussain at Autonomy, which was acquired by tech giant HP in 2011 (file image)
‘Bouncing HOLAC into appointments and shortcutting vetting processes is always going to be a recipe for reputational issues to emerge later down the line.’
A House of Lords Appointments Commission spokesperson said: ‘When vetting ministerial peerages for propriety, HOLAC carries out all its usual checks with departments and agencies, albeit on an expedited timescale.
‘The Commission would not provide advice supporting a candidate if it was not able to complete vetting.’
A government spokesperson said: ‘All processes were followed for the appointment of the investment minister, and the list of ministers’ interests will be published as part of this.’