The BBC Chairman has ordered an internal inquiry into potential conflicts of interests amid claims he helped Boris Johnson to secure a loan of up to £800,000.
Millionaire Sam Blyth, a relative of Mr Johnson, allegedly stepped in to act as a guarantor for up to £800,000 of credit to fund the ex-PM’s lavish lifestyle when he found himself in financial trouble in 2020, according to the Sunday Times.
Richard Sharp, a former Tory donor who was appointed as chair while Mr Johnson as in No10, became embroiled in the row when he admitted to introducing the ex-PM's distant Canadian cousin to Cabinet Secretary Simon Case.
In a statement to BBC staff, he apologised for his involvement which he said had become a "distraction for the organisation" and said he had asked for a scrutiny panel to examine potential conflicts of interest.
Commissioner for Public Appointments William Shawcross has also said he would review the competition which led to Mr Sharp's appointment.
Ex-PM Mr Johnson dismissed the reports as "absolute rubbish" today - and said Mr Sharp knew nothing about his finances.
In a lengthy note, Mr Sharp admitted introducing his "old friend" Mr Blyth to civil service boss Simon Case "as Sam wanted to support Boris Johnson".
He said: "Prior to my appointment, I introduced an old friend of mine - and distant cousin of the then prime minister - Sam Blythe (sic), to the Cabinet Secretary, 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 Blythe (sic) to the relevant official in Government.
"Sam Blythe, who I have known for more than 40 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 Sharp said he had been working in Downing Street at the time as a special economic advisor to the Treasury during the pandemic and he notified Mr Case of his application to BBC chairman when they spoke.
Mr Johnson, Mr Sharp and Mr Blyth reportedly had dinner at Chequers before the loan was finalised, though the trio denied discussing Mr Johnson's finances.
Mr Sharp, a former Goldman Sachs banker, had already submitted an application to be chairman of the BBC at the time. He was announced as the Government's choice for the role in January 2021.
Downing Street denied the appointment of was an example of "cronyism".
The Prime Minister's official spokesman said: "There are processes in place to ensure that these appointments are done properly.
"That was followed in this instance."
Mr Johnson was confronted over the row outside his London home today - but insisted Mr Sharp didn't know anything about his finances.
He said: "This is a load of complete nonsense, absolute nonsense. Let me just tell you, Richard Sharp is a good and a 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."
Rishi Sunak said Mr Sharp went through a "rigorous" appointments process for the top BBC job.
Speaking during a visit to a hospital in Northamptonshire, the Prime Minister said: "This appointment was obviously made by one of my predecessors before I became Prime Minister.
"The appointments process itself for appointing the BBC chairman is a rigorous process, it is independent, there are two stages to it, it is transparent and published online.
"Mr Sharp's appointment went through that full process."
Mr Johnson made a surprise visit to Ukraine on Sunday, where he met President Volodymyr Zelensky and visited Bucha and Borodyanka to the north of Kyiv, the scenes of some of the grimmest atrocities committed by the Russians.
He is a popular figure in Ukraine and he struck up a friendship with President Zelensky, with critics sometimes accusing him of using calls to Kyiv as a distraction when he faced political troubles at home.
The Liberal Democrats said the £115,000 allowance for Mr Johnson to run his office as ex-PM should be withdrawn until he answers questions about his financial arrangements.
The party's chief whip, Wendy Chamberlain, said: "Boris Johnson has a dismal track record of avoiding scrutiny and covering up his lies and deceit.
"We know he's only interested in following the money, so it's time to hit him where it hurts - his wallet."
