Gold­man files be­come ex­cep­tion in Den­mark's as­set-sale process

The Pak Banker - - BUSINESS -

Den­mark's de­ci­sion to let law­mak­ers see se­cret doc­u­ments on Gold­man Sachs Group Inc.'s pur­chase of state as­sets will prob­a­bly be a one-off.

The gov­ern­ment says it's mak­ing an ex­cep­tion in the case of Gold­man's 2014 in­vest­ment in Dong Energy A/S af­ter law­mak­ers on a com­mit­tee over­see­ing the sale com­plained they weren't given full ac­cess to the rel­e­vant files. Bjarne Co­ry­don, who was fi­nance min­is­ter at the time, said the in­for­ma­tion con­tained in the trans­ac­tion pa­pers was too sen­si­tive even for the par­lia­ment com­mit­tee.

Gold­man's mer­chant bank­ing unit paid about $1.5 bil­lion in 2014 for an 18 per­cent stake in Dong. Dan­ish pen­sion funds ATP and PFA A/S also in­vested in the util­ity as part of the same ac­cord. Fi­nance Min­is­ter Claus Hjort Fred­erik­sen said this month he will re­lease the doc­u­ments more than a year af­ter the trans­ac­tion went through as law­mak­ers con­tinue to ar­gue over the deal. Gold­man and PFA have said they have no ob­jec­tion to the files be­ing made public.

But let­ting law­mak­ers see all the de­tails in a bid­ding round "won't ap­ply else­where," Jakob Elle­mann-Jensen, a spokesman for the rul­ing Lib­eral Party, said in an in­ter­view on Fri­day. "It's fine that it'll ap­ply in this case and that the par­ties in­volved have said they don't mind in­for­ma­tion be­ing dis­closed to law­mak­ers."

The Gold­man deal left an in­deli­ble mark on Dan­ish pol­i­tics. Dis­agree­ment over the Wall Street bank's in­vest­ment in state as­sets prompted a ju­nior party in the for­mer So­cial Demo­crat-led ad­min­is­tra­tion to quit the coali­tion in protest. Danes gath­ered in their thou­sands in front of the par­lia­ment to protest against the sale.

The gov­ern­ment of Helle Thorn­ingSch­midt that over­saw the Gold­man deal was ousted in June elec­tions and Den­mark is now ruled by the Lib­eral Party of Prime Min­is­ter Lars Loekke Ras­mussen.

Gold­man has since hired An­ders Fogh Ras­mussen, a Dan­ish prime min­is­ter from 2001 to 2009 and for­mer NATO head, to guide it through the po­lit­i­cal hur­dles that have con­tin­ued to emerge since it bought its stake in Dong.

Elle­mann-Jensen says it's im­por­tant that po­ten­tial in­vestors in fu­ture rounds of state as­set sales aren't fright­ened away by a sense that ev­ery­thing they say in the con­text of con­fi­den­tial ne­go­ti­a­tions could be made public. "What needs to be bal­anced in this case is that po­ten­tial bid­ders may not wish to have their bids dis­closed as they will re­veal their busi­ness strate­gies," he said.

Rene Christensen, a spokesman for the Dan­ish Peo­ple's Party which lob­bied to have the doc­u­ments re­leased, has said there's no risk their con­tents might trig­ger po­lit­i­cal de­mands that a new deal be ne­go­ti­ated.

"Al­ter­ing the deal isn't re­ally what it's about," Christensen said by phone. "It's about hav­ing had a fi­nance min­is­ter who said he couldn't trust the com­mit­tee." Den­mark's law­mak­ers de­serve to know "what was so im­por­tant about this deal that we weren't al­lowed to see more de­tails," he said.

Ac­cord­ing to Elle­mann-Jensen, Den­mark risks jeop­ar­diz­ing its ap­peal as a tar­get for off­shore in­vestors if it en­forces the same stan­dards of trans­parency on all fu­ture bid­ders. "It would be a shame to make this stan­dard pro­to­col for the fu­ture," he said. "That would likely keep bid­ders away and then we may not get the best bids in the fu­ture."

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