Table of Contents
The political silence has finally been broken. Labor’s manifesto promises that the proposed £3.6bn takeover of Royal Mail by ‘Czech Sphinx’ Daniel Kretinsky and lesser-known business partners will be properly scrutinised.
Has anyone been listening to Dave Ward, general secretary of the Communications Workers Union (CWU), in an interview and as a guest city columnist on these pages.
Unlike the flaccid Royal Mail board, which surrendered at the first smell of cordite, the union recognized that it would be a huge mistake for a public service company, part of the national furniture since the 16th century, to fall into foreign hands.
Successive CEOs have blamed unions for obstructing modernization and weakening the company. When representing its members, the CWU has not been easy to deal with.
The board, headed by BA exile Keith Williams, should never have thrown up its hands in horror and accepted the assurances of its largest shareholder, Kretinsky.
Review: Labor manifesto promises proposed £3.2bn takeover of Royal Mail by ‘Czech Sphinx’ Daniel Kretinsky and lesser-known associates will be properly scrutinised.
His job was to defend a poorly functioning but excellent British institution from falling under the spell of indebted foreign owners with controversial connections.
The water industry shows that these mixed marriages, whatever the investment promises, end up in wastewater.
At the heart of Royal Mail is the universal service obligation. Amid mail volume falling from 20 billion to 7 billion letters a year, a new model was needed.
Ofcom and the company’s German chief executive, Martin Seidenberg, have come up with ways to future-proof the service.
Instead, the board is selling under its feet. The Labor Party is now offering to devise a new business and governance model that gives workers and customers a greater say.
Preferably, this will be done in the context of a publicly traded company rather than through a half-baked public ownership proposal.
The possibility of government intervention should halt the procurement schedule. Kretinsky should refocus his attention on Euro 2024 football.
Little chance
BT was the growth company that survived ownership of the General Post Office. But, like its Royal Mail half-brother, it is under siege from foreign investors.
The latest to join an already bloated shareholding register is Mexican billionaire Carlos Slim, who heads a Latin American telecommunications colossus valued at £40bn.
He joins telecoms titans Patrick Drahi, with a 24.5 percent stake and a debt problem, and Deutsche Telecom, with 12.5 percent. It has a paper loss of £3.5bn.
Slim’s arrival has surprised BT. President Adam Crozier should come closer to understand his intentions.
Slim presumably knows that seeking total control would be opposed. Telecommunications networks are part of the nation’s security.
BT has been a serial underperformer. There are two poisonous pills: a persistent pension fund deficit and the obligation to purchase an expensive fiber-to-the-door broadband network.
Under the new leadership of Allison Kirkby, the group’s finances are healthier.
Shares have risen 25 percent since Kirkby took the helm, wielding the ax by shedding problematic global services and cutting capital spending.
However, stocks are well below pre-pandemic levels and Slim recognizes a silver lining.
Labour’s intervention in the Royal Mail deal suggests that a tilt towards BT, by any or all of the players, will not receive much attention.
Ukraine Gambit
After months of wrangling, advanced G7 countries in Puglia, Italy, have come up with a way to funnel cash to Ukraine.
They have agreed to tap interest accrued on some £235bn of frozen assets to cover a £40bn funding gap.
What is undecided is which banks will provide the loans and whether or not they will attract some type of sovereign guarantee.
The fear has been that the seizure of Russian assets could cast a shadow over China, Japan and other countries that hold Western currencies in their reserves.
