£180m lost by Royal Mail sale
The sale of the Royal Mail is already a controversial topic. It won't be letting up any time soon as reports show that UK taxpayers lost out £180m on the deal. A small mercy is that it was originally thought to be a much greater loss, somewhere in the region of £1bn.
However, £180m is no joking matter.
The inquiry headed by Lord Myners will conclude this week and will show that the Government could have received additional proceeds of somewhere between £120m and £180m if the sale of shares had been conducted properly.
The report will also underline the inadequacies in the way that the Shareholder Executive (who looks after state-owned assets) handled the privatisation. It adds that, based on initial interest from investors, the price range for the shares should have been higher.
Vince Cable, who commissioned Myners to complete the inquiry, asked him to examine whether the way future Government asset sales should be changed.
The inquiry are set to make a number of recommendations, including measures to overhaul conventional market practices, like the earlier publication of prospectuses which will facilitate better investor education and enabling a greater number of analysts to publish research on companies and the like.
There will also be calls for an examination of whether or not there should be standardised shareholding disclosure requirements for all institutions. This will mean a lot of changes in the market and a shake-up of the way things are done between regulators and institutional investors.