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Yet another ill-conceived policy to help their ``friends``.........
The bankers making millions from the Royal Mail firesale
Goldman Sachs and UBS are among banks and investors who control vast numbers of the shares
They were hired by the Government to help sell one of its most valuable and historic assets - and were paid millions of pounds in fees for their work valuing Royal Mail ahead of its flotation last month.
Goldman Sachs and UBS priced the company at £3.30-a-share, raising the taxpayer £1.7bn from the sale. But shares instantly soared in value and have remained high ever since. At tonight's closing price of 545p more than a month after the initial public offering, the public purse would be more than £1bn better off. The official share register, obtained by The Independent, shows there were 518 separate entities holding more than 5,000 Royal Mail shares by the end of October. City firms applied for more than 20 times the number of shares available - and both Goldman Sachs and UBS have piled in to the frenzy.
Goldman Sachs International had brokered deals on 21.5 million shares worth around £123m by 31 October, the document shows. The bank insists it bought the shares on behalf of clients and says it hasn't acquired any for itself. UBS had also bought 375,000 shares. Again, it claims to be holding the stock on behalf of third parties.
The low flotation price has turned into a major political headache for the Government - particularly when its rival, JP Morgan, valued Royal Mail at between £6.8bn and £8.5bn. Vince Cable opted for Goldman and UBS because they offered to do the job for £13m - a saving of just £1m from the nearest competing bid. The fact that Goldmans is now a significant shareholder, a fact first reported by Private Eye, will prove embarrassing for the Business Secretary.
Today the Bow Group think-tank led by Sir John Major called for an inquiry into the flotation. It said the company had been "catastrophically undervalued", claiming that the privatisation was a "short-sighted firesale", which has deprived taxpayers of a "valuable national asset".