'Emergency talks' over Royal Mail

[TrueBlueTerrier]

http://www.belfasttelegraph.co.uk/busin ... 48854.html" onclick="window.open(this.href);return false;

Ministers have been holding emergency talks about the final allocation of Royal Mail shares after applications from private investors were up to seven times over-subscribed, it has been reported.


According to the Daily Telegraph, the Whitehall meetings - arranged to avoid political embarrassment - follow concerns that some small investors would lose out.

Business Secretary Vince Cable said around 700,000 applications were made by Tuesday night's deadline, which he believed showed the high level of interest in the controversial privatisation.

Around 30% of shares have been set aside for the so-called retail shares, with others going to institutional investors and staff.

Business minister Michael Fallon said: " No decisions have been taken on allocation but I'm committed to making sure smaller investors get their fair share."

Mr Cable faced tough questions from members of the Business Select Committee amid concerns that the business, and some of its properties, was being undervalued.

Committee chairman Adrian Bailey (Lab, West Bromwich West) said the minister was overseeing the sale of a profitable, popular, publicly owned company to financial institutions he had criticised in the past.

Mr Cable said he was "very comfortable" with the sale, stressing the Government wanted to secure a "long term, responsible" investor base from organisations such as pension funds.

Conservative MP Brian Binley (Northampton South), asked why the Government was "discriminating" against Royal Mail employees who will lose their free shares if they leave the company within three years.

"I suspect Royal Mail will downsize some of its operations within three years, and employees who lose their jobs will lose their shareholding. Don't you feel you are being unfair?"

Mr Cable replied that so-called "good leavers", such as those made redundant or who resign on health grounds, would be protected.

The minister hit back at critics of the sale, including the Labour Party, denying allegations that a number of Royal Mail sites in London were being undervalued.

Asked about the relationship between a privatised Royal Mail and the Post Office, which is remaining in the public sector, he said it was "unthinkable" that it would be diminished, given how much work flowed between the two.

Earlier, MPs voiced fresh concern that the privatisation would be "highly lucrative" for speculators, hedge funds and investment banks rather than the public.