Us-style shake-up of listing rules ‘will harm ordinary investors’

THE boss of Britain’s second biggest investment platform has hit out at a proposed shake-up of stock market rules designed to encourage more tech firms to list in the UK. Richard Wilson, chief executive of Interactive Investor, said he was worried the proposed move to a Us-style system would harm ordinary investors.

The recommendations were made by former Worldpay chief Ron Kalifa, in a report commissioned by the Treasury.

The proposals include permitting companies with a premium listing to use dual-class share structures, which allow founders to maintain control of companies even after selling off part of their stakes during a stock market flotation.

Mr Wilson said: “Dual-class structures, as mooted in this review, with differential voting rights, would erode shareholder rights further, and distorted rights distort governance and accountability.”

Dual-class shareholdings are popular among tech start-ups and have been part of the attraction of New York as a destination for major listings.

Michael Jacobs, a lawyer at Herbert Smith Freehills, said: “There are legitimate concerns regarding any potential dilution of the principle of one-shareone-vote.” The “potentially serious corporate governance risks” of concentrating power in the hands of founders must be weighed against the benefits of giving entrepreneurs freedom to run companies as they wish and allowing the public to invest in firms that often deliver high returns, he said.