Day shareholders roared

UnILEVER’S decision to kill off its plan to move its headquarters from London to Rotterdam is a great victory for shareholder democracy, an even greater victory for UK plc and a humiliating climbdown for the board.

It’s rare for one of the world’s giant corporations, and the third biggest company in the FTSE 100, to admit defeat so early in the game after a protest from shareholders. The vote is another three weeks away.

It’s also rare for the world’s biggest investors to emerge from their usual slumber to be so vocal in dissing a company’s plans.

But global shareholders want global companies such as Unilever listed on a global index, and that meant staying in London.

In the end it was a numbers game. Tracker funds with $200bn follow Unilever through the FTSE 100, All Share and 350 indices. Only $84bn follow its dutch stock on the Euronext 50.

They did not like Unilever’s decision to scrap the company’s dual listing and consolidate in the netherlands because it would see the stock booted from the benchmark FTSE 100 index, forcing some of the big index-trackers to sell.

Fund managers also queried Unilever’s persistent claims that the move would improve liquidity as more than half the

stock is owned by dutch investors and more shares are traded in Amsterdam than London. no one believed them.

What’s interesting is that the Marmite-toMagnum company has conceded defeat after only 12pc of its investors had gone public with their protests.

It suggests that behind the scenes other big investors have told the board they were going to vote against it too.

This would have tipped the balance, as Unilever needed 75pc of votes by value but also a majority in number of plc shareholders, which gave its 36,000 retail investors such clout.

Going ahead with the plan and losing that vote would have left even more egg on Unilever’s face than pulling out. Better to be scrambled now than fried alive on October 26. Unilever boss Paul Polman was right to withdraw, and should be applauded for seeing sense. However, it should also be said the board’s motivation for simplifying its archaic dual listing was an honest one. not even investors disagreed with the principle, just which location was the chosen one.

Everybody involved has tried to pretend that Unilever’s switch to Rotterdam was nothing to do with Brexit, but no one believed them.

For ultra-Remainers, Unilever’s departure became totemic, a stark symbol of the UK’s lunacy in leaving the European Union and used by many to show we had lost our mind. They are the ones now with a bloody nose.

yet it’s short-sighted to crow. The tracker funds acted out of self-interest rather than out of patriotism.

now investors have a taste for their own power, hopefully they should be more bolshie about issues which are arguably as important to the national interest, such as excessive pay packets or takeovers that destroy shareholder value. That’s even more vital to London’s reputation as one of the world’s great capital markets.

Trump default

REAd Michael Lewis and be afraid. Lewis, the brilliant author of Liar’s Poker and The Big Short, said in an interview this week promoting his latest book, The Fifth Risk, about President Trump: ‘He could precipitate a financial crisis that would make the 2008 crisis seem trivial.

‘And a run on the dollar and all the rest. We take it for granted, and we shouldn’t, that the dollar is the world’s reserve currency.

‘We have $20 trillion in debt and he’s jacking up the deficit in ways that we haven’t seen in a long time and he has no compunction about stiffing creditors.’

Lewis’s words came as the sell-off in US Treasuries continued, and ten-year bond yields rose to their biggest weekly rise in eight months.

The mood is spreading quickly across bond markets in Europe and the UK as investors run scared about higher interest rates.

Italian yields soared over fears about its budget deal with the EU, as did Germany’s ten-year bond yields.

Coming in the same week that the IMF’s managing director Christine Lagarde warned of a growing crisis, this sell- off is not a good harbinger.

nor is Lewis’s prognosis that Trump might default on US debt, as he has done from his company’s debts.

Lewis warned: ‘All of his instincts are to default on debt. To walk away.’ ALEX BRUMMER IS AWAY