Rolet defends listings review
THE boss of the London Stock Exchange has defended a controversial review of listings rules which could pave the way for a lucrative UK float of oil giant Saudi Aramco.
Proposals by City watchdog the Financial Conduct Authority which would make it easier for state-owned companies to list in London have raised concerns over a dilution of corporate governance standards and protection of minority shareholders.
The Saudi government plans to sell about 5 per cent of Aramco, which has an estimated value of £1.5trillion. Current rules prevent a “premium listing” unless at least 25 per cent of shares are sold, but luring Aramco to the capital, amid competition from New York, would enhance Britain’s “open for business” credentials as it prepares to leave the European Union.
LSE chief executive, Xavier Rolet, pictured, would not comment specifically on an Aramco float, but argued any regulatory framework needs to be flexible, as London battles to remain competitive in a global market.
He said: “I’m not sure why there’s so much focus on this particular point. It should be a surprise to no one if listing rules are from time to time refreshed by the regulators to take into account the reality we live in.” Earlier this week, the Institute of Directors argued the proposals “do little to address the risks and challenges surrounding sovereign-controlled companies which include the potential for politically-motivated ownership interference over the company by the state apparatus”. It added: “National governments are also in a strong position to undermine the rights of minority shareholders and the authority of the board of directors at such enterprises.”
Rolet’s comments came as the half-year results showed the LSE continuing to thrive as an independent business, after its proposed £21billion merger with German rival Deutsche Borse collapsed earlier this year.
LSE shares hit a record high, up 111p to 3880p, as its revenue increased by 18 per cent to £853million and adjusted operating profit rose by a fifth to £398million, boosted by strong information and clearing services performances.
Rolet said: “We are benefitting from ongoing cost savings and integration efficiencies, while also continuing to invest in growth opportunities. We are confident of delivering further cost savings.”