Asda boss who plundered £180,000 from floods fund is jailed for three years

A DIRECTOR at Asda who defrauded the supermarket's charity fund of £180,000 by claiming money was to be used to assist flood victims has been jailed for three years

Asda boss Paul Kelly arrives at Leeds Crown Court. Picture: Ross Parry Agency
Asda boss Paul Kelly arrives at Leeds Crown Court. Picture: Ross Parry Agency

Paul Kelly persuaded fellow directors to sign blank cheques, claiming he was due to meet with Prince Charles and needed money to donate.

Kelly, 55, also lied about using the Leeds-based retailer’s money to help disabled children.

A court heard sums of up to £80,000 were instead handed over to a failing ballet company run by his new young lover.

Kelly, who was director of corporate affairs, was handed the sentence after pleaded guilty to seven offences of fraud.

Jailing Kelly, Recorder Nigel Sangster, QC, said: “Up to 2013 you performed your duties, whether paid of voluntarily, in a diligent and honest fashion.

“Up until that date you were a pillar of the community, admired and trusted by many.

“That makes your fall from grace and the gross abuse of trust placed in you all the more shameful.”

The court heard Kelly, who earned an annual salary of £160,000 plus bonuses, also held the position of chairman of Asda Foundation and divided his time between the company’s offices in London and Leeds.

That role involved him chairing Asda Foundation meetings with 12 other trustees and suggesting charitable causes worthy of receiving donations.

Kelly began offending in July 2013 when he asked a fellow director to sign a cheque for £3,500 for the Murley Dance Company, the company run by his partner David Murley.

Kelly claimed the company was heavily involved with working with disabled children.

Richard Walters, prosecuting, said the company in fact did not do any work with disabled children and was not a charity.

Kelly also failed to declare a conflict of interest over the donation as he had invested £100,000 of his own money into the company.

Kelly then repeated the offence on three further occasions, asking directors to countersign cheques for sums of £2,000, £10,000 and £15,000.

At one stage Julie Ward, manager of the Asda Foundation, told Kelly she was impressed by the work of the dance company’ and asked for photographs of their charity work to be placed on the Asda website which Kelly failed to provide.

The offending became more serious in February 2014 when Kelly used severe flooding in the south west of England as an excuse to obtain larger sums of cash.

Kelly asked Ms Ward and another trustee to sign three blank cheques as he was due to meet with Prince Charles in relation to flood relief, adding that it would be beneficial if he had money to donate at the meeting.

Mr Walters said: “It is not disclosed whether the defendant did have a meeting with Prince Charles but the money was not used in relation to flood relief.

“Given the fact that he had links to the Prince’s charities, they knew the defendant and trusted him and thought the explanation sounded plausible.”

Three cheques, two for £35,000 and one for £80,000, were instead handed over the Murley Dance.

Ms Ward later asked Kelly to provide paperwork in relation to the donations but he ignored e-mails from her.

She became suspicious when it became clear the cheques had been donated to the dance company and police were contacted.

The court heard Murley Dance Company was now in receivership and Mr Murley was unaware that the money provided by Kelly had been obtained fraudulently.

Simon Blackborough, mitigating, said Kelly had committed the offences at a time when he was suffering a psychological breakdown as his relationship with his previous partner of 13 years was breaking down and his mother was seriously ill.

Kelly also served for 14 years as a trustee at the Lowry arts centre in Salford. A fellow Lowry trustee described how Kelly’s personal appearance had begun to deteriorate during 2014.

The barrister said Kelly had become stressed by a “macho” working atmosphere as Asda. He said the offending happened at a time when he was under increased financial pressures at work and was having to deal with the horse meat scandal.

Mr Blackborough said Kelly was selling a property he owns in North Yorkshire in order to pay back the money.

He added that his client was HIV positive and his health may suffer if he was sent to prison.

Mr Blackborough said Kelly had attempted to take his own life of two occasions.

In addition to the jail term, Kelly was banned from being a company director for five years.

Kelly was sacked by Asda in September 2014, just days before he had been due to sit on a panel at Labour’s party conference with Shadow Home Secretary Yvette Cooper.

He has also rubbed shoulders with former Deputy Prime Minister Nick Clegg, and had recently been made an ambassador for Prince Charles’s Business in the Community charity.

Mr Clegg was pictured with Kelly when Asda was made an official partner for the 2014 Tour de France’s Grand Depart in Yorkshire.

Kelly has previously been an adviser to the Government on food policy, alcohol and obesity.

Mr Murley has performed with Madonna, the Royal Opera and English National Opera.

A spokesman for the supermarket said at the time of Kelly’s dismissal: “Asda expects the highest standards of integrity from its colleagues. Although we’re incredibly disappointed by these allegations, we are pleased that our internal controls worked.

‘We have made an additional donation by way of a gift to the Asda Foundation to ensure that none of the good causes that it supports are financially disadvantaged as a result of this matter.’

Kelly had worked at Asda for seven years.

Prior to joining the supermarket he was group corporate affairs director at catering firm Compass Group and development director at Granada Hospitality.