Asset stripping disgrace

IN hIs well-researched book Britain For sale, the mail’s highly-respected city editor, Alex Brummer, details how foreign companies have been allowed to take over numerous strategic British ones, while successive British governments stood by and did nothing.

In a recent documentary, Professor Will hutton, of oxford University, explained how hedge funds have swooped on British takeover victims as a means of making short-term profits.

These predators purchase a large tranche of shares over a few days and are able to control a major company within a week.

Uninterested in long-term research, development and growth, they may sue the board of a long- established British company if the directors do not give in to a predatory takeover which the board finds against the company’s interest.

The predators’ aim is a quick profit, even if means asset stripping, dismemberment and closure.

Unlike German and French companies, which can raise capital from

banks, British companies depend on the stockmarket, which can be a killing ground for them.

And while even Us companies such as Google have a second type of shareholding, which preserves original ownership, allowing l ong- term planning, nothing like that is available to British firms.

The next government should — as a matter of urgency — review the way in which British companies can be taken over against the national interest and legislate to prevent that from happening. WILLIAM LONESKIE, Lauder,

Berwickshire.