Business Secretary Vince Cable refuses Labour's demands to reveal details of 'cosy' Royal Mail sell-off deal

 

Business Secretary Vince Cable has refused demands by the Shadow Business Secretary Chuka Umunna to release the names of the 16 City investors who reneged on a deal to remain long-term shareholders in the Royal Mail.

Mr Umunna made his demands in a letter to Mr Cable citing The Independent's reports of a “gentleman's agreement” made with a select group of 16 City investment companies that they would be long-term shareholders in Royal Mail in return for being granted priority status and extra allocations of shares. In the event, within weeks of the float these investors had sold more than half of their stock at a profit estimated at more than £300m.

Details of the agreement emerged from the National Audit Office (NAO), which earlier this week published a scathing report on the flotation fiasco that cost taxpayers more than £1bn as the postal service was sold off too cheaply.

As well as demanding the identities of the City institutions, Mr Umunna asked for further information on “what formal or informal arrangements were made to ensure that they would form part of a long-term and supportive shareholder base.”

Mr Cable responded with a flat refusal to name names, with his department citing “confidentiality reasons”. He added: “We did not seek to lock them in as they would have paid less for a stock they could not trade. And there were no meetings between myself or officials and these priority investors.”

He added: “There was no agreement - gentleman's or otherwise.” This appeared to be in direct contradiction with the NAO's report into the scandal.

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