LONDON: Britain’s Co-operative Bank, which prides itself on ethical investments, has been plunged deeper into crisis after its former chairman was filmed allegedly seeking to buy drugs.
Former Co-op bank chairman Paul Flowers—a church minister—apologized after allegations were published in the in The Mail on Sunday newspaper involving crystal meth, crack cocaine and ketamine.
The paper alleged that the 63-year-old Methodist minister was caught on camera discussing the purchase of illegal substances.
The paper said the event allegedly occurred just days after Flowers had bungled an appearance before lawmakers on parliament’s Treasury Select Committee to explain the lender’s dire finances.
At his appearance on November 6, Flowers said that the Co-op’s balance sheet had £3 billion of assets, when in fact the figure was £47 billion. He also appeared confused about the bank’s loans and investments.
Analysts said on Monday that the scandal further damaged the bank’s reputation, two weeks after it was forced to hand control to US hedge funds to plug a £1.5-billion ($2.4-billion, 1.8-billion-euro) black hole.
Following the newspaper revelations, Flowers apologized in a statement issued through the Methodist Church in Britain, blaming pressures in his personal life.
“This year has been incredibly difficult, with a death in the family and the pressures of my role with the Co-operative Bank,” he said.
“At the lowest point in this terrible period, I did things that were stupid and wrong. I am sorry for this and I am seeking professional help, and apologize to all I have hurt or failed by my actions,” Flowers added.
The Co-operative Group said that it had launched an investigation into “any inappropriate behavior” and a “root-and-branch review” of the organization.
Flower, who chaired the lender from 2010 until June this year, when he resigned over the capital shortfall, has been suspended from the Methodist Church for three weeks pending investigations.
The former local councilor in Bradford, northern England, has also been suspended from the main opposition Labor Party.
“This is another big blow to the Co-op bank’s ethical image,” said Andre Spicer, professor of organizational behavior at Cass Business School in London.
“It is hard to image a bank retaining ethical credentials when it is run by hedge funds and was chaired by a minister who was allegedly caught shopping for cocaine,” Spicer added.