Yahoo Finance Czech Royal Mail suitor should face fit and proper person test, says Sir Vince Cable
The Czech billionaire vying to buy Royal Mail should face a fit and proper person test, the architect of the postal service’s privatisation has said.
Sir Vince Cable, who oversaw Royal Mail’s stock market float in 2013, said ministers had “good grounds” to investigate Daniel Křetínský if he tabled a firm takeover bid for the company.
He added that any deal with Mr Křetínský, the co-owner of West Ham FC and who is known as the “Czech sphinx”, should also be reviewed under tough new national security laws.
Sir Vince told The Telegraph: “I don’t think one should be nationalistic about this but Britain has, more than any other major G7 country, been open to the takeover of utilities and I think the public mood has probably gone too far, which is why I suggest that applying the screening test is something that should be done.
“There are two public policy issues. One is the fit and proper person test – it’s quite an important institution. And secondly this new screening system that the Government has introduced that is allegedly national security but is actually screening out desirable and undesirable mergers.
“So it seems to me that there’s good grounds for the Government looking at this on both of those counts.”
While fit and proper person tests usually only apply to takeovers in certain industries such as media and football, Sir Vince said Mr Kretinsky should face the same scrutiny in his bid for Royal Mail.
It comes after Royal Mail’s parent company on Wednesday revealed it had rebuffed a £3.1bn takeover approach from Mr Křetínský, who holds a 27.5pc stake in the group.
International Distribution Services (IDS) branded the bid “opportunistic” and said it “significantly undervalues” the company’s future prospects.
Mr Křetínský is expected to return with a fresh offer for Royal Mail. He has until May 15 to make a firm bid under City takeover rules.
However, any swoop by the tycoon is likely to draw political scrutiny given the postal service’s key role in British life.
Mr Křetínský previously triggered a national security review when he increased his stake in the business to more than 25pc in 2022, though this was ultimately cleared.
While Chancellor Jeremy Hunt last night declined to comment directly on the takeover bid, he signalled that the Government would revisit how “former public sector monopolies” are regulated to safeguard the provision of vital services.
However, the Labour Party has signalled it is open to Mr Křetínský’s approach.
A spokesman for Mr Křetínský pointed to the tycoon’s existing UK investments, which include stakes in Sainsbury’s and West Ham, as well as power plants and other critical energy infrastructure.
The surprise bid comes as Royal Mail grapples to stem heavy losses in its struggling letters business.
Bosses have outlined proposals to deliver second class post just three times a week amid concerns its so-called universal service obligation (USO) has left it financially unsustainable.
Sir Vince, who was accused of undervaluing Royal Mail after shares surged by more than a third on its first day of trading, said privatisation was the “only feasible route” as the company needed to raise more capital to fund its turnaround.
But he added: “What I’m disappointed by is that we put this into the private sector in order to give the company freedom to raise capital which they couldn’t raise from the Treasury in order to invest in a new logistics business.
“They’ve now had a decade and they haven’t turned the business around. It’s disappointing”.
