An investigation will be launched into the appointment of the BBC chairman following reports he helped Boris Johnson secure a loan.
William Shawcross, the Commissioner for Public Appointments, said he would review the competition which led to Richard Sharp’s appointment while Mr Johnson was prime minister.
He made the announcement in response to a request from shadow culture secretary Lucy Powell.
He said: “The role of the commissioner is to oversee the public appointments process and ensure appointments are made fairly, openly and on merit.
“I intend to review this competition to assure myself and the public that the process was run in compliance with the government’s governance code for public appointments.”
The Sunday Times reported Mr Sharp was involved in arranging a guarantor on a loan of up to £800,000 for Mr Johnson in late 2020, and that the then-prime minister went on to recommend him for the top job at the BBC.
The government’s paymaster general, Jeremy Quin, told the Commons on Monday Mr Sharp went through an “incredibly robust process” by an independent panel ahead of his appointment and is “absolutely confident” the “usual process” will have been followed.
But the SNP’s John Nicholson, who was on the Culture Select Committee Mr Sharp appeared in front of, said it was “all a bit banana republic” after he said they “grilled him about his £400,000 gift to the Conservative Party”.
“However, he did not disclose his role in getting the man appointing him a huge loan,” Mr Nicholson told the Commons.
Earlier on Monday, the chairman asked for the BBC to review any potential conflicts of interest he may currently have to ensure that “all appropriate guidelines have been followed” since he joined the broadcaster.
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“We have many challenges at the BBC and I know that distractions such as this are not welcome,” he said in a statement read out on BBC News.
The review will not look at his links to Mr Johnson’s loan, but in a letter to BBC staff, Mr Sharp clarified some of the details surrounding the Sunday Times report.
He confirmed he introduced multimillionaire Canadian businessman Sam Blyth to cabinet secretary Simon Case “as Sam wanted to support Boris Johnson”.
“I was not involved in making a loan, or arranging a guarantee, and I did not arrange any financing. What I did do was to seek an introduction of Sam Blyth to the relevant official in government,” he said.
“Sam Blyth, who I have known for more than forty years, lives in London and having become aware of the financial pressures on the then-prime minister, and being a successful entrepreneur, he told me he wanted to explore whether he could assist.”
Mr Blyth is a distant cousin of Mr Johnson’s.
The statement was released moments after Mr Johnson said that Mr Sharp “knows absolutely nothing about my personal finances”.
Speaking to Sky News he said: “This is a load of complete nonsense – absolute nonsense.
“Let me just tell you, Richard Sharp is a great and wise man but he knows absolutely nothing about my personal finances – I can tell you that for 100% ding-dang sure.
“This is just another example of the BBC disappearing up its own fundament.”
The BBC reported that Mr Sharp “has agreed with the board’s senior independent director” that the nominations committee will look at conflicts of interest when it next meets and, “in the interests of transparency, publish the conclusions”.
Ms Powell said there also needed to be an independent investigation into the hiring process “to satisfy the public and parliament of its integrity”.
On the commissioner opening an investigation, Labour’s shadow culture secretary said: “The BBC Chair, Number 10 and the Department for Digital, Culture, Media and Sport clearly have questions to answer.
“This probe is welcome news and should shine a light on this appointments process and provide reassurance to the public.”
The party has also reported Mr Johnson to the Parliamentary Commissioner for Standards, saying the former prime minister’s financial affairs are “dragging the Conservative Party deeper into yet another quagmire of sleaze”.
The Cabinet Office has insisted Mr Sharp was appointed “following a rigorous appointments process”.
This included assessment by a panel of experts and “additional pre-appointment scrutiny by a House of Commons Select Committee”, according to a statement released yesterday.
