Shareholders risk losing voting rights if plans to attract fast-growing companies to UK are given green light, bodies representing investors warn
Shareholders risk losing their voting rights if plans to attract fast-growing companies to the UK are given the green light, bodies representing investors have warned.
Two sweeping reviews commissioned by the Government are expected to propose shake-ups to London Stock Exchange rules to attract technology titans and entrepreneurs.
One review, led by former Worldpay boss Ron Kalifa, will recommend that financial technology companies can float just a 10 per cent stake in their business, rather than the current minimum of 25 per cent.
Show of hands: Two sweeping reviews commissioned by the Government are expected to propose shake-ups to London Stock Exchange rules
The review, which will be handed to Chancellor Rishi Sunak next month, will also call for company owners to have the option of greater voting rights than ordinary shareholders.
The idea is to give entrepreneurs more control of their businesses, which could help them to fend off takeover approaches.
A separate review into stock exchange rules, led by Lord Hill, is also expected to make calls for owners to retain greater control.
The Investment Association, which represents global fund giants such as Schroders and BlackRock, is against the plans. Alan Beaney, chief executive of wealth manager RC Brown, said: ‘Company owners want to have their cake and eat it. You’re disenfranchising shareholders. I think it’s a move backwards.’