• 4 minutes Why Trump will win the wall fight
  • 9 minutes Climate Change: A Summer of Storms and Smog Is Coming
  • 12 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 16 minutes Washington Eyes Crackdown On OPEC
  • 19 hours is climate change a hoax? $2 Trillion/year worth of programs intended to be handed out by politicians and bureaucrats?
  • 8 hours Ayn Rand Was Right
  • 6 hours Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 1 hour Oil imports by countries
  • 10 hours Sanctions or Support: Despite Sanctions, Iran's Oil Exports Rise In Early 2019
  • 7 hours Solar and Wind Will Not "Save" the Climate
  • 53 mins AI Will Eliminate Call Center Jobs
  • 7 hours Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
  • 5 hours NZ Oil, Gas Ban Could Cost $30 Bln
  • 22 hours Regular Gas dropped to $2.21 per gallon today
LNG’s Downstream Glitch

LNG’s Downstream Glitch

While LNG has seen strong…

Warnings Mount Against Rule-Bending For Aramco IPO In London

London

Royal London, an asset manager, has warned against the London Stock Exchange changing initial public offering rules to better suit the tastes of Riyadh, which is preparing to take Aramco, the world’s biggest oil company by production, public.

The fund’s corporate governance manager, Ashley Hamilton Claxton, said in a statement that “Any attempt to bend the listing rules in order to facilitate the IPO of Saudi Aramco is highly inappropriate and flagrantly ignores the principles which the UK’s listing rules were designed to defend. While the listing would be a prize asset on the exchange due to the sheer size of the firm, the attempt to list just 5 per cent of the total share capital flies in the face of what is acceptable.”

The latter part of the statement refers to the requirement of floating at least 25 percent in a premium listing and comes in response to news that the LSE and the Financial Conduct Authority are at the moment working on changing the rules—a change which would accommodate the Aramco listing as premium rather than secondary.

The London Royal statement also follows on the heels of a similar warning from Financial Times associate editor John Gapper, who wrote yesterday that “The point of listings rules is to attract as many companies as possible while ensuring they are trustworthy. There is a tension between the two — laxer rules can lure more issuers in a race to the bottom — but in the end, as the Financial Conduct Authority noted recently, “high corporate standards [lead] to high levels of investor confidence and, in turn, a vibrant market.”

Related: Saudi America – How New Tech Is Creating Another Oil Boom

Aramco would certainly be a tasty morsel for any stock exchange, but the short list to date seems to have narrowed down to NYSE and LSE. It may well be that the London exchange comes out a winner.

Earlier this month, a legal adviser to Riyadh said, as quoted by the FT, that listing Aramco in New York will come with a risk of litigation, after the passing of the Justice Against Sponsors of Terrorism Act, which allowed families of the victims of the 9/11 terrorist attack to sue Saudi Arabia. In fact, in March this year, the families of 850 of the victims did start a class action suit against the Kingdom.

Royal London’s Claxton said the fund manager will “lobby strongly” against any kind of special treatment for the Saudi company.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News