Royal Mail share price: FCA rejects calls to investigate

on Apr 29, 2014
Updated: Apr 9, 2020
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iNVEZZ.com, Tuesday, April 29: Britain’s Financial Conduct Authority (FCA) will not launch a probe into the government’s sale of Royal Mail (LON:RMG), rejecting calls from lawmakers who said that the sharp rise in the postal service firm’s share price should have been investigated.

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MPs on the Public Accounts Committee (PAC) yesterday grilled the regulator’s CEO, Martin Wheatley, over the controversial privatisation of Royal Mail which saw its share price rise 38 percent on its first day of trading (Royal Mail’s share price surges 38% on market debut).

Wheatley told the PAC: “It may well have been disappointing for the issuer to have found that those shares were subsequently sold very quickly, [but] that’s not a regulatory issue, there was no misconduct, no suggestion of breach.”
He also rejected criticism from committee members who said the allocation of shares to asset managers at the same banks who advised the government, coupled with the sharp rise in the share price after the sale, should have triggered an FCA inquiry.

“Those two facts don’t of themselves pass the threshold level for should an investigation be launched,” Wheatley insisted, adding that the IPO failure was in the pricing decision and not in the regulation.
Wheatley was giving evidence at the start of a week in which parliamentarians are putting the focus back on the sale of Royal Mail (Royal Mail share price: NAO says privatisation ‘undersold the taxpayer’).

UK Business Secretary Vince Cable will give evidence to the PAC today alongside fellow minister Michael Fallon. (Royal Mail share price: IPO terms face fresh scrutiny). Tomorrow, the committee will reconvene to take evidence from a series of other figures central to Royal Mail’s flotation.

**Board change**

Royal Mail announced in a press release today that Jan Babiak, the director of the company’s Nomination Committee, Pensions Committee and the Remuneration Committee, has resigned from the board with immediate effect.
Royal Mail chairman Donald Brydon commented on her departure: “Jan has made a very valuable contribution to Royal Mail during an important time for our company. Her regulatory expertise, alongside her considerable experience in information technology and risk, were particularly beneficial as we prepared for, and floated, Royal Mail. The Board and I would like to thank Jan for her support and counsel. We wish her well for the future.”
**Royal Mail share price on the up**
Royal Mail share price has been trading in a positive territory today and as of 09:27 BST, it was 1.17 percent higher at 517.50p.
According to AnalystRatingsNetwork data, five research analysts have a ‘sell’ rating on the FTSE 100-listed postal services group, four have it as a ‘hold’ and five rate it as a ‘buy’. The stock’s consensus rating is ‘hold’ with an average price target of 581.50p.
**As of 09:25 BST, buy Royal Mail shares at 517.50p.**
**As of 09:25 BST, sell Royal Mail shares at 517.00p.**

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