How UK PM Rishi Sunak Landed In Trouble Yet Again Due To Wife Akshata Murthy's Investments

UK Prime Minister Rishi Sunak is facing a parliamentary probe into potential conflict of interest after it became evident that his wife Akshata Murthy has a stake in a company set to make gains from a new budget policy. Last month, Jeremy Hunt, chancellor in the Sunak government, unveiled a new childcare policy that would pay an incentive of £600 to any childminder who is new to the profession. Further, the incentive will double to £1200 for those who enter the profession via private childcare agencies.   

It then came to light that Rishi Sunak's wife Akshata Murthy is a shareholder in Koru Kids, one of the six childcare agencies that will benefit from the new policy. Because of the added advantage in joining through an agency, more people entering the profession are expected to sign up with private agencies such as Koru Kids.  

When Sunak was questioned by lawmakers late last month about why the policy favours private agencies, the Indian-origin PM failed to declare the matter of potential conflict of interest. In fact, Labour MP Catherine McKinnell had explicitly asked him whether he had anything to declare to which Sunak responded: “No, all my disclosures are declared in the normal way”.

According to Companies House, the UK's corporate register, Akshata Murty holds 20,000 ordinary shares and 7,100 Series A ordinary shares in the privately-held Koru Kids. As the policy is expected to be profitable for the prime minister's wife, Liberal Democrat chief whip Wendy Chamberlain said, “There are serious questions for Rishi Sunak to answer over any potential conflict of interest, and any extra income his family could receive from his own government's policy.”

Following uproar from Opposition leaders, the British parliament's Commissioner for Standards opened an investigation into the matter of potential conflict of interest last week. There is a particular section in the code of conduct for UK's MPs that states that members should "always be open and frank in declaring any relevant interest in any proceeding of the House or its Committees". The present inquiry will investigate whether Sunak violated this rule.

Regarding the investigation, Sunak's spokesperson said, “We are happy to assist the Commissioner to clarify how this has been transparently declared as a ministerial interest.” If Sunak is found to have violated the code of conduct for MPs, he might be required to issue a formal apology regarding the same. The parliament's website also states that in the case of serious violations, a member's salary may be suspended for a period or even have their House membership revoked for a short period or even permanently.  

This is not the first time that UK PM Rishi Sunak, who came into office in October 2022, has come under the lens for his wife's investment holdings.

Infosys Heiress

Akshata Murthy is the daughter of Narayana Murthy, co-founder of Indian IT services company Infosys. After having married Rishi Sunak in 2009, she received flak from the British public when it came to light that she had been claiming non-domicile tax status to cut down her UK tax liability. It became a matter of controversy when she continued to claim this benefit even after Sunak became the British finance minister in 2020.

By utilising the non-domicile status, Murthy did not have to have tax liability in Britain for the dividend earnings she received from her investments in Indian businesses. She owns a 0.94 per cent stake in Infosys, the IT major which presently has a market capitalisation of Rs 5.23 lakh crore as per Indian exchange data. Although it is not clear how much tax she saved in the UK by utilising her non-domicile status over the years, it is to be noted that Murthy did not violate any laws by utilising this tax-saving mechanism. As an Indian citizen, she was well within her rights to not pay tax in the UK for her earnings in India.

However, as pressure mounted on Sunak and Murthy, especially in the light of the UK government's increased taxation in the aftermath of the Covid-19 pandemic, Murthy gave in and declared that she would pay British tax on her global income from the financial year 2021-22 onwards.  

Apart from his wife's tax saving strategy regarding Infosys dividend earnings, Sunak also faced the heat for Infosys continuing its operations in Russia even after the commencement of the Russia-Ukraine conflict in early 2022. In response to this, Sunak had clarified that neither he nor his wife had anything to do with the operations at Infosys.