Private Investor: Aer Lingus? Tempting... if you're Irish

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The Independent Online

It's hardly the biggest scandal on the planet, but I think I've found a little bit of a scam. It concerns Aer Lingus. You, like me, may have read the reports about the Irish government's plan to sell off some of the equity in the airline, and, more recently, the indications that the shares will be priced to sell (although in the event the price seems to have been set towards the higher end of City expectations).

They are also going to be sold quite quickly, with the prospectus out now and all applications for the initial offering due to be in by Wednesday night. The minimum application is for €10,000 worth of shares, or about £6,800.

Great, you might be thinking. A bit steep, that minimum, but maybe worth the effort, especially if there's a stagging opportunity there. Where do I sign up?

This is where it gets tricky. My first port of call was to Hargreaves Lansdown, the Bristol-based stockbroking outfit which usually carves out a slice of any flotation action on behalf of small investors. No luck there, this time, which I thought was a bad omen.

So I visited the Aer Lingus website for guidance. Sure enough there was a helpful FAQ page and a list of stockbrokers for the float for UK and Irish investors.

Oh dear. As soon as I saw the list of unfamiliar stockbroker names and Dublin telephone numbers I feared the worst. I dialled a couple: FEXCO Stockbroking Ltd and NCB Stockbrokers. The people on the end of the line were refreshingly straight about what I had to do and how easy i t might be. Basically I had to open an account with them, and then go through Irish money laundering procedures. This would involve sending my passport or driving licence over to Dublin, having had one or other copied and signed by a police officer. I don't know any coppers so that might be time consuming. Plus the usual utility bills and a letter from my bank to say they know who I am. Well I've had an account with them for 20 years so they ought to, but then I've only ever met one person from my branch, so maybe not.

The good news is that the third Dublin number I rang, listed as Goodbody Stockbrokers, actually connected me to good old Computershare, in Bristol. Going through them would seem to spare me from the worst of the money laundering regulations. I will still have to raise a euro denominated cheque, but that seems the least of my worries.

All in all, then, the Irish government seems to have made it as difficult as possible for British small investors to take part in the flotation. There's nothing explicitly anti-British in this, but the effect of all the red tape and the shortness of the deadline (get through those money laundering regs by next Wednesday!) really means that British would-be Aer Lingus shareholders are locked out. True, if you have a good deal of patience or luck you might ring the right number to get those Aer Lingus shares (00 353 1447 5109 if you're phoning from the UK) but there's nothing on the Aer Lingus site to indicate that this is the one most suitable for UK resident applicants.

It's a sort of informal, indirect barrier to trade and the free movement of capital. For such a pro-European nation as Ireland I was surprised, as well, that Germans, Greeks, French, Estonian and all other EU investors have even less chance of applying for shares in Aer Lingus than those in the UK. For them the minimum investment is €50,000. Why the UK seems to get special status seems unclear. Perhaps it's for the benefit of those of us in the Irish diaspora, though I doubt it. In fact, even the Irish shouldn't have special status in EU terms.

So what? Well, it doesn't have to be this way and there are examples of best practice in this field. The Germans for one. When the Berlin government was selling off bits of Deutsche Telekom and Deutsch Post they made it very easy for non-Germans to take their small stakes in these companies through non-German stockbrokers. I am sure there is some EU rule relating to a level playing field across the Union when it comes top flotations. Isn't this what the single market is supposed to be all about? Italians and Austrians owning shares in an Irish airline (and vice versa?) Or is the Aer Lingus float just another little example of the petty nationalisms that quietly persist under all the grand talk about the European ideal? Looks like the Irish will be the only stags in this forest.

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