News reports have revealed that the British financial market hopes to attract the Saudi state-owned oil company “Aramco” to list its shares on the London Stock Exchange.
Last Thursday, the Financial Conduct Authority (FCA), which oversees the British financial market, introduced a new category in the blue-chip sector targeting state-owned companies, proposing two key exceptions. While these proposals could help the London Stock Exchange compete to list the Saudi oil giant’s shares, one organization representing shareholder interests has criticized the relaxation of investor protection rules.
Bloomberg reported that Aramco hopes to raise $100 billion from the sale of approximately 5% of its shares, in what would be the world’s largest initial public offering.
According to the proposed changes to UK stock listing rules, sovereign shareholders (countries) holding large stakes will not be considered interested parties under trading rules, which means that agreements they enter into regarding the large listed company they control—such as the purchase or sale of public assets from or to that company—will not be subject to a vote by independent investors holding shares in that company, Furthermore, these government shareholders will be exempt from the rules applicable to controlling shareholders in other companies, such as granting the board of directors the right to appoint directors without the need for approval from independent shareholders.
