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Government to review way it handles public asset sales | Government to review way it handles public asset sales |
(about 1 hour later) | |
Business secretary Vince Cable has launched a review of the way the government conducts stock market flotations of public assets. | Business secretary Vince Cable has launched a review of the way the government conducts stock market flotations of public assets. |
It will look into the "book building" process used ahead of a share sale to gauge investor demand, and whether this could be improved. | It will look into the "book building" process used ahead of a share sale to gauge investor demand, and whether this could be improved. |
Former City minister Lord Myners will lead the review. | Former City minister Lord Myners will lead the review. |
It comes ahead of a select committee report on the Royal Mail sale which is expected to be critical. | It comes ahead of a select committee report on the Royal Mail sale which is expected to be critical. |
The review will look at recent UK private and public sector stock market listings which have seen significant rises or falls in share trading prices following flotation. | The review will look at recent UK private and public sector stock market listings which have seen significant rises or falls in share trading prices following flotation. |
Business Secretary Vince Cable said the review would help him to "assess whether changes are needed to the current system government operates for the sale of its assets". | Business Secretary Vince Cable said the review would help him to "assess whether changes are needed to the current system government operates for the sale of its assets". |
The review follows controversy over the £3.3bn privatisation of Royal Mail, where the government has been accused of selling off shares in the firm too cheaply. | The review follows controversy over the £3.3bn privatisation of Royal Mail, where the government has been accused of selling off shares in the firm too cheaply. |
The government initially priced Royal Mail shares at 330p each, but they have risen sharply since and are now trading at about 470p a share. | The government initially priced Royal Mail shares at 330p each, but they have risen sharply since and are now trading at about 470p a share. |
A report by the National Audit Office found that ministers in charge of the privatisation were too cautious when setting the sale price. | A report by the National Audit Office found that ministers in charge of the privatisation were too cautious when setting the sale price. |
In April, Mr Cable insisted that the Royal Mail sale was "successful" and "the government achieved its objectives". | In April, Mr Cable insisted that the Royal Mail sale was "successful" and "the government achieved its objectives". |
The review will examine: | The review will examine: |
Analysis, Kamal Ahmed, BBC Business editor: | |
Critics of Mr Cable will seize on the timing of this announcement, coming as it does a mere two days before what is expected to be a highly critical report by the House of Commons Business Select Committee on the controversial Royal Mail share sale. | |
Are they connected? Well, put it this way, my sources inside the business department are not denying it. | |
The best form of managing a controversy that you know is just around the corner? Get your retaliation in first. |