Pearson vows to freeze Libyans' dividends

Pearson, the owner of the Financial Times and publisher Penguin, will not pay out a dividend to its Libyan investors "until further notice" after the country's sovereign wealth fund's shareholding in the media group was frozen by the British Government.

The blue-chip company's lawyers have now clarified that the Government order to block the assets of Muammar Gaddafi and five members of his family extends to the 3.2 per cent stake in Pearson held by the Libyan Investment Authority (LIA).

Pearson said yesterday that the holdings "are subject to the order and are therefore effectively frozen". A spokesman added: "As a result, Pearson has today informed the LIA that Pearson will not register any transfer or pay any dividend in respect of the shares until further notice." The group revealed on Monday that it had increased its annual dividend by 9 per cent to 38.7p.

Pearson revealed in June that the LIA had bought 24.4 million shares in the group, which subsequentlyincreased the stake to 26.5 million. At the close of trading last night, the holding was worth £274.2m.

Pearson added: "The LIA is a Libyan state asset and it is to be hoped that in due course, these assets can be redeployed to the benefit of Libya and its people."

Dame Marjorie Scardino, the group's chief executive, said on Monday that she was "uncomfortable" with the LIA shareholding. "We are in a terrible position, this is abhorrent to everyone at Pearson."

There has been some criticism of the British Government for not making its freezing order on Libyan assets as clear as possible, with some, including Pearson, unsure about how widely it should be implemented.

Dame Marjorie had earlier said that as a public company, Pearson "don't choose shareholders; they choose us, so there is a very limited amount of things we can do". The company has not met directly with the Libyan investors, and has instead met only once with what Dame Marjorie described as a "middleman".

The company has also shut down its operations in Libya.