Royal Mail sell-off: Sketch - Chinese walls are all Greek to MPs

The row had all but turned into one about the nature of modern capitalism

Goldman Sachs priced the Royal Mail at £3.30-a-share when it floated last October (Getty Images)

A bit puzzling, this “Chinese wall” business. On Monday Lazard and Co’s chief executive William Rucker insisted that the separation between his bit of the business, the Government’s lead adviser on the Royal Mail sell-off, and the other bit, which made £8m profit by flogging its shares within a week of it happening, was “complete and utter”.

One theory is that the term derives from the Great Wall, so mighty it can be seen clearly from outer space. The problem about this kind is you can’t see it all. Instead we have to take it on trust. Are Mr Rucker and his colleague from Lazard Asset Management, Alan Custis, forbidden from using the same lift, the same golf club, or attending the same group-wide bonding weekends in case they should inadvertently exchange market-sensitive information?

On Monday it was hard to tell. For one thing they were separated at the hearing by the more solid barrier of Richard Cormack, who has a few Chinese wall issues of his own since he works for Goldman Sachs, a group which not only also advised the Government on the sale but, as Margaret Hodge established in “an hour on the internet”, is actually part-owned by some of the newly named 16 “priority investors” in Royal Mail.

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Ms Hodge suggested that these incestuous relationships left the general public feeling that “this little group” had “made a killing at the expense of the taxpayer” in a way “which just feels wrong”.

But oddly, it was Cormack’s answer that made you realise that the row had all but turned into one about the nature of modern capitalism.

Of course, said Cormack, there had been “no impropriety at all”. But then he added: “It’s not surprising as we are a large listed global financial institution, financial institutions should invest in us. And that we should be targeting similar large institutional investors to buy Royal Mail.” It all sounded reasonable. But it did little to refute the idea that what Ms Hodge memorably called an “institutional masonic lodge” had played a crucial role in the sale.