Government delays revealing identities of RBS share buyers

RBS building sign

The government is continuing to refuse to reveal the identities of the hedge funds and institutional investors to which it sold shares in Royal Bank of Scotland last month.

UK Financial Investments (UKFI), which handled the sale of £2bn of shares in the Edinburgh-based bank, has not disclosed the list of institutions that bought the 5% stake sold off in August.

The sale represented the first reduction in the government stake in RBS since the £45bn taxpayer bailout seven years ago at the height of the banking crisis. It resulted in a £1bn loss for the exchequer as the shares were sold at a lower price than the average price the government paid for them.

Around 60% of the shares sold were bought by hedge funds in a sell-off that reduced the taxpayer stake from 79% to just below 73%.

UKFI – whose boss, James Leigh-Pemberton, will give evidence to the Treasury select committee of MPs on Tuesday – is yet to decide whether to reply fully to a freedom of information request asking for the identities of the buyers. UKFI is also considering whether to release the terms of the sales mandate handed to the bankers handling the sale.

UKFI has confirmed it holds the information but said that it was exempt from disclosure under sections of the Freedom of Information Act that relate to protecting commercial interests. It has asked for another 20 working days to decide whether the public interest in disclosure outweighs the public interest in withholding.

UKFI said: “By virtue of Section 10(3) of the act, where public authorities have to consider the balance of public interest in relation to a request, UKFI has not yet reached a decision on the balance of the public interest. We therefore need to extend our response time limit.”

The stake was sold off at 330p a share – below the 337p at which they closed the day before the sale and less than the average 502p that the taxpayer paid for them – and the shares have since fallen to 322.5p.

The taxpayer stake in Lloyds Banking Group, also managed by UKFI, is expected to be cut in the coming weeks. It has already fallen to just under 13% – from the 43% it stood at following the rescue of HBOS in 2008.

Powered by Guardian.co.ukThis article was written by Jill Treanor, for theguardian.com on Monday 7th September 2015 16.24 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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