Royal Mail sell-off adviser to Government 'cashed in'

[TrueBlueTerrier]

Royal Mail sell-off adviser to Government 'cashed in' on profits after buying 800,000 shares

http://www.mirror.co.uk/money/city-news ... nt-2814325" onclick="window.open(this.href);return false;?

The bank Lazard – already being paid £1.5million for its role – invested in the 500-year-old firm through its asset management arm

A Bank involved in advising the Government how much the Royal Mail was worth has made a profit after buying over 800,000 shares.

Lazard – already being paid £1.5million for its role – invested in the 500-year-old firm through its asset management arm. The stock is now worth £4.5million.

Adrian Bailey, chair of the Business Select Committee, which is probing the flotation, said: “It’s totally unacceptable. I don’t see how you can act as advisor to the Government and then profit from the advice you have given them. It is a conflict of interest.

“For this not to be an obligation for a company in such a strategic position, at the centre of a flotation with huge significance for the taxpayer, is unbelievable. It is an amazing lack of transparency.”

Nearly 600,000 shares in the Royal Mail were sold at 330p each after the flotation began on October 11, valuing the business at £3.3billion.

But they went up to 550p within a week, making the firm worth £5.5billion.

Analysis using information from Thomson Reuters shows Lazard Asset Management built up 830,000 shares just days after they went on sale.

A Lazard spokesman said yesterday: “The Government was always aware that Lazard’s Financial Advisory and Asset Management businesses are separate legal entities and act entirely independently of each other. There was no absence of transparency.”

Bankers from Goldman Sachs and UBS, another bank which advised the Government, faced the select committee yesterday after accusations they let the taxpayer down.

Lazard bosses are set to be grilled on the issue by the committee next week.

Richard Cormack, managing director of Goldman Sachs, insisted: “I feel that we executed the transaction well and in the interests of the taxpayer.”

UBS boss James Robertson revealed 350p a share was considered before the flotation.

But he blamed US debt fears and the looming threat of a strike by postal workers for pressing on.

Business Secretary Vince Cable, who will also appear before the committee next week, has described the sharp increase in the share price following flotation as “froth and speculation”.

But stockbroker Gert Zonneveld, of Panmure Gordon, said he was advising clients the Royal Mail shares could soar to a “target price” of 570p in a year.