BBC File On 4
The Colonial Development Corporation (CDC) was a proud creation of the post-war Attlee government 60 years ago to promote industry and agriculture in the poorest parts of the empire.
But now there are fears since the partial privatisation of the one-time development agency, the CDC is chasing big profits rather than helping the poor.
The Mpongwe estate in Zambia's copper belt became a vital source of the nation's food thanks to help from a fund, which was a product of Britain's imperial past.
Held up as a model to the rest of Africa, Mpongwe was established on thousands of acres of dry bush using large scale irrigation with great success, thanks to investment from CDC (originally known as The Colonial Development Corporation and later The Commonwealth Development Corporation).
"When I tell people from other parts of the world that we've got something like this in Africa not many people believe it but when I show them the pictures they say 'wow I never knew something like this could happen in Africa,'" said Simba Moya a writer and a former labourer who eventually became a manager at the project.
"It was producing 50% of Zambia's soya crop, 40% of its wheat and was the largest single source of maize in the country," Geoff Tyler, CDC's former representative in Zambia told BBC File On 4.
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He said private investors saw the project as too risky and would have found its rates of return of eight to ten percent a year as too low compared with their expected returns of 25% to 35% a year.
New ethos
But would that kind of return still satisfy the new management at CDC, now established as a company wholly-owned by the government, and its part-privatised fund management partnership Actis?
Former CDC officials detect a new commercial ethos sweeping the organisation, with talk of projects now deemed old hat, today the talk is of deals.
Estates like Mpongwe belong to yesteryear.
This year Actis sold off the last of its investments in the Mpongwe Development Company, which three months later went into liquidation.
The deals that attract CDC are its investment in businesses such as Moser Baer a hi-tech company in India which is one of the world's leading suppliers of CDs and DVDs earning more than £250m ($501m) a year.
Lucrative market
CDC has committed $35m (around £17m) as part of a portfolio of investors assembled by an Indian private equity company to help Moser Baer invest $3.2bn in the photo-voltaic devices used for solar panels - a market expected to be extremely lucrative.
"I'm concerned about the apparently knock-down price at which Actis was floated"
Tim Loughton, MP
The firm's executive director Ratul Puri told the BBC the new investment would have continued regardless of whether CDC joined in.
Malcolm Bruce, chair of the Commons Select Committee on International Development questions whether this is the best value for public money.
"They are operating within the parameters the government has set, so the question might arise whether the Department for International Development needs to set even tighter guidelines to focus them more sharply."
Actis - which still has a 40% government stake - has always aroused controversy.
A majority stake in the new company, which was set up to manage public funds of £1.5bn, was bought without competition for £373,000.
The arrangement attracted criticism, among others from one former fund manager at a British merchant bank, Tim Loughton now a Conservative MP.
" I'm concerned about the apparently knock-down price at which Actis was floated....and it's clearly now worth many millions.
"Also, there was a post-transaction bonus paid of £2.3m. So they [the management] didn't risk any of their own money.
"The taxpayer paid bonuses which enabled the managers to pay for the business and pocket a large amount left over. Nice work if you can get it."
Profit complaints
The price of a majority stake in Actis has come in for further criticism since figures emerged showing projected profits of $55m (£30m) over five years.
This projection turned up in Actis' Business Plan of April 2004, which was placed in the House of Commons library and went largely unnoticed until sought out by Richard Brooks a reporter working for Private Eye.
Richard Brooks was startled to find such large profits forecast, since he had understood that the government expected much more modest returns in Actis' early years.
"Shortly before the sale in March 2004, Hilary Benn answered a question in parliament in which he said that the fees that Actis would be paid by CDC would equate to the anticipated total operating costs of Actis on an approximately break-even basis over the first five years.
Capital need
"That means that he wasn't expecting Actis to make any profit for five years," said Mr Brooks.
The Department For International Development insists that CDC invests and reinvests in developing countries with demonstrable benefits for the some of the world's poorest people.
A DFID spokesman told File On 4 that business people in these countries say the lack of access to capital is a major constraint on their business.
"Actis operates on a break-even basis and after remuneration of members, is yet to make a profit. This is completely consistent with the then Secretary of State for International Development's written answers on March 1 2004.
"Should Actis make profits, DFID is entitled to receive 80% of them up to 2014."
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