Sir Gerry Grimstone, chairman of the recently merged Standard Life Aberdeen, has backed controversial plans for a listing of Saudi Aramco in London.
Speaking at the Conservative party conference, Grimstone backed the relaxing of the London Stock Exchange requirements that make the UK’s capital eligible to be considered for the high
The Saudi Aramco listing is that of a petroleum giant comprising the oil wealth of Saudi Arabia, that could value the company at US$2trn.
As reported, because of the size of Saudi Aramco, the Financial Conduct Authority has tabled proposals to relax the rules for state-backed entities. Winning the contract to list Aramco would generate hundreds of millions of dollars in fees for investment bankers, lawyers and other professional firms involved in stock market flotations
And for the Conservatives it could also be seen as a coup for the UK post-Brexit.
Critics of the changes to the rules for this IPO argue that the City should not relax its rules to allow Saudi Aramco to come to London as it sets a precedent that could damage the City’s reputation.
Grimstone was speaking at a Standard Aberdeen-backed session at the Conservative party conference, on Monday. His session was entitled ‘From boardroom to factory floor: how do we rebuild trust in big business?’
“I think that company [Aramco] should be listed here,” said Grimstone.
“No one would say that Saudi Aramco is not well-run…If a company is well-run we need to encourage that company to come to London.”
“If London wants to compete in the global marketplace, it must be able to attract firms such as Saudi Aramco to the Square Mile,” he said.
London and New York are the frontrunners for the listing, but a float on the London Stock Exchange would require a modification of listing rules because of the size of Saudi Aramco.
As reported, last week, Andrew Bailey, chief executive of the UK financial services regulator, defended its moves to change the listing rules.
Bailey was reacting to criticisms from investors and various corporate governance groups and a group of MPs have said a proposed new listing category could lower the quality of companies on the London stock market, and potentially leave shareholders exposed if things went wrong.