City faces accusations of bending its rules to secure ARAMCO’s listing

City faces accusations of bending its rules to secure ARAMCO’s listing


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Two chairwomen of parliamentary committees in the British House of Commons are seeking explanations from the City regarding changes in regulation that will favour Aramco, the BBC reports.

The Saudi Aramco company is planning to list 5% of shares and London is eager to host the event. City regulation currently stipulates that companies must list more than 25% of their shares to avoid the dominance of specific investors. Now the Financial Conduct Authority (FCA) is seeking to allow “exceptions” for state owned companies, which many analysts see as a signal for ARAMCO.

Aramco’s 5% is estimated to worth $2 trillion, which means billions in fees for investment bankers, lawyers, consultants, accountants. The government also sees the ARAMCO listing as a vote of confidence to the City during the Brexit negotiations.

MP Nicky Morgan is the chairwoman of the Treasury Select Committee and Rachel Reeves is the chairwoman of the Business Select Committee. Their concern is that standards may be bent to secure the listing of a single company.

Currently, the most likely choice for ARAMCO’s listing is New York.

epa05818808 A man passes the writing of the London Stock Exchange Group (LSE) in London, Britain, 27 February 2017. The planned merger of Deutsche Boerse and London Stock Exchange (LSE) becomes uncertain after LSE announced on 26 February 2017 it would not be able to sell the trading platform MTS as requested by antitrust regulators of the European Union. EPA/ANDY RAIN

A man passes the writing of the London Stock Exchange Group (LSE) in London, Britain, 27 February 2017.  EPA/ANDY RAIN

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