Postal sale price 'utterly ridiculous'

Business secretary Vince Cable remains defiant despite the deepening scandal of Royal Mail’s privatisation, after being accused by some MPs of flogging off the postal operator for an “utterly ridiculous” price.
Under intense grilling from MPs on the Business Select Committee, Cable insisted there will be “absolutely no apology” from the Government over the sale, repeatedly claiming that the 330p a share was the best for Royal Mail shares at the time.
Committee chairman Adrian Bailey told Cable that “most right-thinking people” know that Royal Mail was undervalued at its initial public offering (IPO). “You were driven by a political desire to sell and clearly undervalued the company,” he said. “The approach of the department seems to have dwelt on the negative, which if you are selling something – and particularly when that something is a public asset that the public were entitled to get money for – seems, quite frankly, utterly ridiculous.”
However, Cable countered: “Hindsight is a wonderful thing, but on the basis of the facts we had, the information we had, the knowledge we had of the company, this was a successful transaction. We don’t apologise for it and don’t regret it.”
Royal Mail shares rose 38% on their first day of trading and have since soared to as high as 619p a share.
The Committee cited the National Audit Office’s report which claimed that only 11 out of 16 so-called “priority investors” had retained most of their shares, despite being chosen to provide a long-term shareholder base.
Both ministers blamed the Communications Workers Union, whose strike threats and refusal to agree a long-term pay settlement for workers had hit the company’s prospects.
But CWU general secretary Billy Hayes blasted: “For Cable and Fallon to continue to claim industrial action was the main reason they sold Royal Mail at a low share price is utterly ridiculous.”

Postal sale price ‘utterly ridiculous’

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