Anger as Goldman Sachs makes clients up to £12m

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Anger as Goldman Sachs makes clients up to £12m selling shares having advised Government on price

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News that the “cheap” stock market flotation has let its investors cash in has caused anger

Clients of a giant US investment bank that helped value Royal Mail have made up to £12million by quickly selling their shares.

Goldman Sachs has already been rapped for advising the Government to price Royal Mail at £1billion less than it is currently worth.

Now news that the “cheap” stock market flotation has let its investors cash in has caused further anger.

A Mirror investigation has found that Goldman clients sold up to £27million of stock as Royal Mail shares soared.

Our revelation comes as Business Secretary Vince Cable faces tough questions from MPs on the Business Select Committee today about what’s been dubbed a disastrous fire sale.

Shares in the postal giant, which went on sale at 330p on October 15, have risen by more than two-thirds.

Documents obtained by the Mirror show that Goldman Sachs International, a branch of the bank, had snapped up more than 21 million shares by October 31. On November 11, it had less than 17 million.

It means Goldman traders could have sold at least 4.6 million shares during a period when they peaked at 587p, at which point they were worth £27million. The shares closed yesterday at 533.5p.

If they had bought at the issue price and sold at the peak, the deals could have made nearly £12million profit. Goldman would not confirm how many Royal Mail shares it had bought or sold or at what price.

A source said some of the 4.6 million shares could have been loaned to other investors.

Board members of Goldman Sachs International include Tory peer Lord Griffiths of Fforestfach.

Adrian Bailey, chairman of the Business Select Committee, said: “What you have found out justifies my suspicions. The Government should preclude anyone advising them profiting from that advice.”

The committee is also due to quiz Lazard, a key advisor on the sale.

The Communication Workers Union said: “We can’t understand how Goldman Sachs were allowed to profit from their own advice. It has to be a conflict of interest and unethical.”

Meanwhile an investor gave his £275.49 profit from selling Royal Mail shares to the posties’ Communication Workers Union with a note that said: “Your members have more right than the rest of us to assets given away.”