CITY AND SUBURBAN
Make my day the investment cartels are caught in the pincers
CHRISTOPHER FILDES
Idetect a pincer movement closing in on a fortress of City privilege. It has long withstood the siege of our biggest and most Powerful companies, but now the attack is Joined from another direction, by a New Model Army of prospective share-owners. Between them they can break the grip of the City institutions who now own two- thirds or more of the shares in almost every major company, and operate cartels to make sure that this controlling interest is theirs for ever. They contrive this by using, and abusing, their rights under company law and Stock Exchange rules, which say that when a company raises money by offering new shares for cash, the present shareholders have first refusal. Neither the law nor the rules stop a company offering shares to other people (though, listening to the institutions, you might not think so) not so long as shareholders consent to it. The institutions gang up to make sure that the shareholders will never consent. The life assurance companies and the pension funds have what are pleasingly called Investor Protection Committees. They line oP behind the IPCs and all vote together, to block any company trying to offer more than a handful of shares to anyone but themselves. They have blocked such prop- osals from companies as weighty as Impe- rial Chemical Industries and Barclays Bank. When one household name tried it, the chairman was met by a man from the 'PC who fancied himself as the City's Clint Eastwood. 'C'mon,' said this gunslinger, make my day.'
Previous page
