London’s Aramco bid in doubt

London’s chance of hosting the listing of Saudi Aramco was in doubt after politicians questioned proposals by the UK regulator to facilitate it.

The chairs of the treasury and of the business, energy and industrial strategy committee wrote an open letter to the Financial Conduct Authority raising concerns that by relaxing stock market rules to accommodate Aramco, investors would be left unprotected.

The politicians said they wanted to explore the reasoning behind the authority’s consultation on initial public offering (IPO) rules, “particularly given the concerns expressed by stakeholders that these proposals would weaken protection for private investors against interference from foreign sovereign company owners”.

Aramco is planning an IPO next year and is expected to dual-list its shares in Saudi Arabia and on an international exchange. The offering is likely to create the world’s largest listed company.

Among the unusual aspects of the IPO is the Saudis’ desire to list only 5% of Aramco, which means the listing would not usually be accepted for the London Stock Exchange, which typically requires at least 25% to be floated.

©2017 funds global mena

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