Fleeced over Royal Mail sale? They’re bankers. What did we expect?
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Tuesday 01 April 2014
If you thought it was only conspiracy theorists that saw the City as a mutual back-scratching club of old boys acting entirely in their own interests, think again.
To sell a £1.7bn stake in the Royal Mail, the Government had to hire an investment bank to recommend seven investment banks to persuade other investment banks to buy the shares.
These same bankers and their fund-manager peers deal with each other on dozens of similar deals through the year. This time, it was Lazard acting for the seller, UBS and Goldman Sachs among those liaising with the buyers. Next week, on the next deal, it will be UBS advising the seller, Lazard talking to buyers. Same names, same faces.
Of the seven investment banks doing the selling, at least five were also doing the buying – or at least, their banks’ fund management divisions were. They say there are strict Chinese walls between departments and their senior executives. We have to take their word for that, and believe the brickwork extends to the golf course and wine bar.
The National Audit Office says the Government should not have relied so much on Lazard’s advice – it should have found a valuer outside of the City. Nice idea, but as the business and energy minister Michael Fallon told The Independent last night: “Whose advice should we have taken, a doctor’s?”
The fact is, despite all the talk of breaking down the too-big-to-fail banks that run the City and Wall Street, there are, since the financial crisis, even fewer, more powerful banks now than ever before. Conflicts of interest are growing, not declining in number.
- 1 Katie Hopkins gives rare glimpse of sensitive side with heartfelt open letter to her children penned in case she dies from epilepsy
- 2 Rihanna's Met Gala dress took one Chinese woman 2 years to make, was reduced to omelette meme in 2 seconds
- 3 Top Gear: Jodie Kidd, Philip Glenister and Guy Martin 'in advanced talks' to replace Jeremy Clarkson and co
- 4 Frankie Boyle on Scottish independence: 'In the Interests of Unity, F**k Off'
- 5 Florida couple forced to register as sex offenders for having sex on public beach
Boston Marathon runner's search for mystery man she kissed ends with letter from his wife
Italian police 'reveal' what Jesus looked like as a young boy
Florida couple forced to register as sex offenders for having sex on public beach
Mysterious 'X-Files' sounds heard miles above the Earth
Met Gala 2015: Beyoncé manages to out-skimp Rihanna, Miley and Kim Kardashian with near-naked ensemble
In defence of liberal democracy
General Election 2015: Post-election 'shambles' looms as 70 per cent of voters say SNP 'should not be able to veto UK government policies'
The Rothschild Libel: Why has it taken 200 years for an anti-Semitic slur that emerged from the Battle of Waterloo to be dismissed?
General Election 2015: UK will be 'run for the wealthy and powerful' if Tories retain power, Labour warns
General election live: SNP suspends two members for disrupting Labour rally
Schools forced to act as 'miniature welfare states' with teachers buying underwear and even haircuts for poor pupils
iJobs Money & Business
£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...
£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...
£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...
£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...