Britain’s efforts to attract the stock market listing of oil firm Saudi Aramco could cost London its reputation for good corporate governance, the head of an influential committee said on March 5 ahead of a visit by the Saudi crown prince.
Crown Prince Mohammed bin Salman, heir apparent to the Saudi throne, will spend three days in London this week as part of a tour designed to reassure allies about his domestic reforms, and ease investor concerns about a corruption crackdown.
The overseas trip, Crown Prince Mohammed’s first since he in effect took over the day-to-day running of the country last year, will be followed by talks in the United States, making it the latest staging ground for an international tug of war over the Aramco public offering.
Both Britain and the United States are keen to secure the listing, which could be the largest ever.
Britain’s financial regulators are considering a relaxation of rules that would allow sovereign-controlled companies like Aramco to list on the stock market in London.
But that move has prompted concern among some in Britain’s parliament.
“The UK currently has strict corporate governance rules and it’s vital that they aren’t watered down to secure the listing of Saudi Aramco, sending a message which risks our reputation and which may ultimately damage our attractiveness to foreign investment,” said Rachel Reeves, chair of the influential Business Energy and Industrial Strategy committee.
Prime Minister Theresa May’s spokesman did not immediately have a comment when asked about the type of concerns raised by Reeves.
Crown Prince Mohammed is not due to meet financial regulators during his visit, but the topic is likely to feature in talks with May, who has previously said the London Stock Exchange has made a strong case to host the listing.
Reeves, a member of the opposition Labour Party, also questioned the value of winning the listing to the wider British economy outside the City of London financial district.
“The City and highly-remunerated advisors may stand to benefit from the LSE landing Saudi Aramco but what does this potential listing offer in terms of investment or jobs in the UK?” she said.