Watchdog chief held talks with the Saudis

THE head of Britain’s financial watchdog has admitted holding talks with oil giant Saudi Aramco before proposing weaker rules that would allow it to float in London.

The world’s biggest oil business is mulling a potential £1.5trillion stock market flotation in what many view as an important Brexit boost for the Square Mile.

But there are concerns that Aramco would not pass strict governance rules on shareholder voting rules, as the Saudis plan to list only 5pc of the firm rather than the 25 per cent usually required.

Last month, the Financial Conduct Authority proposed weaker rules that would allow Aramco to trade in the City, in what was seen as a move to stop the firm from moving its listing to New York.

Yesterday FCA chief executive Andrew Bailey said that discussions were held earlier this year with the Saudis. In response to a letter from Nicky Morgan, chairman of the Treasury Select Committee, he said: ‘We can confirm that we held conversations with Saudi Aramco and their advisers in light of their interest in a possible UK listing in the early part of this year.

‘We emphasised during those conversations that we were reviewing the listing regime.’

Aramco’s boss Amin Nasser last week insisted its float will go ahead in 2018. He said the firm was closer to deciding on where to launch the initial public offering and on its exact timing.

London Stock Exchange boss Xavier Rolet and Prime Minister Theresa May visited Saudi Arabia earlier this year to push for the country’s business.