“We say he or she is my friend, but the absolute friend is the truth,” says Byron Nicolaides. It is an ancient Greek phrase, he explains – one that has applied in recent months amid the fallout of the sale of the 148-year-old charity City & Guilds’ commercial arm to his private company PeopleCert. Senior executives pocketing million-pound bonuses, a regulatory inquiry, allegations of “suspect” figures and sackings have all contributed to a bruising post-acquisition six months. PeopleCert’s own probe into the conduct of individuals, Nicolaides reveals, has completed an initial phase and “based on the internal findings” will now be escalated to examine “potential criminal activities” surrounding the controversial deal. “To be clear, I am not saying there is criminal activity,” he adds. “We are looking into allegations to see whether there is merit or not.” ‘I did not expect bad faith’ Nicolaides spoke to FE Week days after City & Guilds Ltd CEO Kirstie Donnelly and chief financial officer Abid Ismail were fired without financial settlement. The pair are now preparing their own legal action against PeopleCert. Legal advice frustratingly restricts the wealthy entrepreneur from divulging the full details of the internal investigation’s scope or phase one findings, but his choice of words is telling. “The one thing I can tell you is that PeopleCert and myself, we always acted at the highest level of integrity based on the information that we had at every point of time. The information we had at the beginning, versus the information we have today, may have been different after the investigation.” Nicolaides admits he was anticipating “difficulties” and scrutiny following the sale of one of Britain’s oldest non-profit educational institutions – City & Guilds of London Institute was founded in 1878 under royal charter – but he “did not expect bad faith”. While remaining tight-lipped on the internal investigation, which is being led by independent non-executive directors, he references a recent report by The Sunday Times that alleged bidders were provided figures that did not reflect the true scale of investment required to modernise the organisation. “We were presented with certain numbers, around £23 to £25 million for technology transformation. There are allegations that internal reports were closer to £49 million.” He adds: “There have been some elements that have been reported in the press, there have been some elements that we have found out, and our team is looking into this.” Technology investment was central to PeopleCert’s rationale for the acquisition with a promise to modernise a legacy IT system and to restore competitiveness with updated qualifications. Whether or not there was misrepresentation of those figures, Nicolaides says the total cost of the project now “may end up being over £100 million”. The bonuses that ignited outrage The most contentious element of the saga remains post-sale bonuses to the tune of £5 million, paid to over a dozen City & Guilds executives when the sale went through. Donnelly received £1.7 million while Ismail received £1.2 million. Kirstie Donnelly and Abid Ismail Did executives push through the sale because they stood to gain financially? “I cannot speculate,” says Nicolaides. The critical question of when the executives first learned they would be in line for bonuses from PeopleCert goes unanswered. “It is not black and white,” Nicolaides says and repeatedly defers to lawyers. It is also unclear whether PeopleCert will seek to recoup the bonuses paid to the former CEO and CFO following their exit. After the interview, the company consulted its lawyers and told FE Week: “The payment of bonuses subsequent to the acquisition is part of an ongoing internal investigation and related to ongoing legal proceedings. As such we cannot comment further. “We are committed to the highest standards of governance, transparency and integrity and will confirm the outcome of the investigation when it concludes.” The Charity Commission’s statutory inquiry, which opened in January and is separate from PeopleCert’s internal review, is also ongoing. A Save City & Guilds Action Group is calling for a fully independent inquiry into the conduct of the executives and trustee board. Former City & Guilds of London Institute chair Ann Limb, who was made a Baroness in December, told The Sunday Times in February that she will not be taking her seat in the Lords until “matters relating to my previous voluntary roles are resolved”. ‘We’re probably going to go against the lawyer’s’ PeopleCert’s commitment to “confirm the outcome” of its own internal investigation is carefully phrased. Nicolaides previously wrote for FE Week making clear his company welcomes scrutiny “because we believe that robust oversight ultimately strengthens the entire system”, adding that providers that “resist transparency do a disservice to learners and undermine public trust in vocational education”. So, on that note, will the full investigation findings be made public eventually? Nicolaides says: “If I ask this question to our lawyers, they’re going to tell me definitely no. But what I can commit to you, and this is Byron, we’re probably going against the lawyers at some point. “The financial aspect of this is not important. The integrity and transparency of doing the right thing is extremely important. “At some point in time I will say, ‘guys, maybe we cannot give all the reports, but this is what happened and this is our actions and you judge whether I’ve done the right thing or not’. I hope they say, yes Byron, you did the right thing.” Throughout the interview, Nicolaides returns to the term integrity. It is, he says, one of PeopleCert’s defining values. “You cannot build an organisation without integrity,” he says. “It is doing the right thing when people are not watching.” The business case Beyond the controversy lies a more fundamental question: whether the sale itself of a national heritage institution was justified. It is days before the governing council of the City & Guilds Foundation – the charity left after the sale – meets for its annual general meeting in London on April 15. Nicolaides, who is expecting a “big fight” at the meeting, says the transaction itself was a highly competitive process, run “flawlessly” by top investment bank advisers, consultants and lawyers. Regulatory approval was also granted by Ofqual. It was run “very similar” to the process that the UK government ran when PeopleCert acquired Axelos from the Cabinet Office in 2021. Nothing felt improper. He notes the ideological opposition to the City & Guilds sale, but argues the awarding business needed radical change, and that only a private operator could deliver it. “City & Guilds was in bad shape,” he says. “Losing money. Losing market share. Technology from the 1980s.” In his view, the organisation was structurally incapable of competing in a modern and globalised qualifications market. He listed a range of constraints caused by its charitable status, “clumsy” governance model, and lack of capital. “Charities cannot compete with private organisations,” he says. “You don’t have the flexibility. You don’t have the resources and can’t take the risk. The decision-making process is ten times more complicated.” PeopleCert, he argues, offers the opposite. “We have the willingness, we have the energy, we have the knowledge, we have the technology, we have the power, and we have the money to do it globally. We are workaholics and want to be champions.” He is adamant that with his plan for change the organisation’s impact will surpass current levels. “The economic value was around £15 billion in 2025,” he says. “We will significantly increase it.” “Outdated” qualifications will be updated to form “the best portfolio” that addresses learner needs ahead of competitors, and the business will be “digital first in the AI era”. He also promises measurable social outcomes, particularly for disadvantaged learners. From rags to riches Nicolaides is not the archetypal education grandee. He was born in Istanbul in 1959 to a poor Greek family. His parents were teachers at community schools where there was no guaranteed salary. Arriving in Greece as an immigrant in 1981, he says he spent the first eight months sleeping on the floor with no money to buy a bed. But he worked hard and created multiple businesses as a serial entrepreneur before being headhunted by Merrill Lynch, rising rapidly in the investment firm to vice president of international. By his early thirties, he was a multimillionaire. “I had more money than I needed,” he says. “I wanted to do something useful to society.” The pivot was education. First, a computer training franchise in Greece in the 1990s and then certification. The result was PeopleCert, founded by Nicolaides in 2000. The fast-growing assessment giant delivers language examinations in over 200 countries and also certifies the PRINCE2 project management and ITIL IT management courses. Following a €450 million acquisition of Axelos in 2021, PeopleCert was described as the first Greek ‘unicorn’ company owing to its combined value exceeding €1 billion. City & Guilds is now the second, but dominant, Ofqual-regulated awarding organisation in the PeopleCert group of companies alongside LanguageCert, most known for its international ESOL qualifications. And this isn’t the first acquisition involving the pair: LanguageCert bought City & Guilds’ intellectual property and related assessment materials for English language qualifications in 2015. Nicolaides claims that since the 2015 deal, City & Guilds has “lost the international market” with this part of the charity falling more than 50 per cent. PeopleCert has meanwhile increased LanguageCert’s global business by 700 per cent. “We’re going to repeat the same story”, he says, “we are going to make City & Guilds global again”. The businessman argues that this will help increase the competitiveness of the UK. “Vocational skills are the heart of transformation globally. All of the production capacity of the West – UK, Europe, US – has moved to Asia, we’re buying everything from Asia. “Now they want to bring it back. And we need the right workforce, the right skills, and this needs investment, this needs technology and businesses looking to the long-term horizon. PeopleCert is really committed to this.” Nicolaides dismisses the view that if an organisation is not-for-profit then the people who work there are “first class citizens” while those who are for profit are “second class citizens”. “Integrity is integrity,” he says. “Whether you are for-profit or not-for-profit.” He points out that City & Guilds was fined by Ofqual three times in seven and a half years and takes a swipe at the organisation’s 1.5 out of 5-star TrustPilot rating (PeopleCert has a 4-star rating). “I want to have an organisation that is not going to be fined by Ofqual. I want Ofqual to say this is the best in class.” He also says City & Guilds Foundation is now in a secure position. It has close to £200 million in assets owing to the sale, which included PeopleCert buying its building and giving the charity five years of free rent, allowing the trustees to ramp up their charitable activities. Offshore jobs and training provider sell-offs? Governance has dominated headlines but leaked information about the future direction of travel has fuelled anxiety within City & Guilds’ commercial organisation post-sale. Plans to reduce staffing costs by tens of millions of pounds and potentially relocate roles to Greece have prompted concern among employees. FE Week understands growing numbers of staff are joining unions. Nicolaides frames the issue in financial terms. “Close to 70 per cent of revenue was going to staff,” he says. “That is not sustainable.” He insists no final decisions have been made, emphasising that initial projections were based on limited data. But he does not deny that change is coming. “We are reviewing everything,” he says. “We have to operate as a commercial organisation.” Part of that review is three training providers – Gen2, Intertrain and Trade Skills 4U – which also transferred to PeopleCert and remain under the City & Guilds brand. Asked whether he intends to keep or sell those training arms, Nicolaides refuses to comment and repeats: “We’re reviewing options, looking at whether this is strategic.” No regrets Despite the turmoil, Nicolaides has “no regrets” about acquiring City & Guilds. He often asks his team what impact the public controversy has had on customers and learners, but they receive “only positive” feedback. “Kirstie and all this stuff, people don’t care,” he says. “What they care about is the future of the business.” He states that the next chapter for the organisation will be steered by seven pledges (see image below) that include putting learners first, creating public confidence through the highest standards and governance, putting training provider, college and employer customers central, and delivering for the UK government’s skills agenda. “I’m here to tell them, ‘listen, guys, give me time and I’ll prove you that I’m worth it’,” he says.