Saudi Aramco IPO: Royal London Asset Management says it will fight any attempt to bend the rules in potential float

Courtney Goldsmith
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The Saudi firm is said to be worth around $2 trillion (Source: Getty)

Saudi Arabian oil behemoth Saudi Aramco should not be given a bespoke listing if it chooses to float in London, a fund management firm said today.

Royal London Asset Management (RLAM) will fight against any moves to allow the Saudi state-owned company to "bend the rules" in order to facilitate an initial public offering (IPO) on London's stock exchange, said Ashley Hamilton Claxton, the firm's corporate governance manager.

Hamilton Claxton called any attempt "highly inappropriate" and said it "flagrantly ignores the principles which the UK's listing rules were designed to defend".

Stock exchanges around the world have battled to win the favour of Saudi Aramco, which is thought to be the world's largest oil producer, and London and New York have come out on top to host what could be the world's biggest IPO.

"While the listing would be a prize asset on the exchange due to the sheer size of the firm, the attempt to list just five per cent of the total share capital flies in the face of what is acceptable," Hamilton Claxton said.

RLAM said the regulatory rules are designed to protect the interests of minority investors, adding that tampering with the rules could leave the pension funds of millions of British savers at risk.

"We will be lobbying strongly against any concessions being granted should there be a formal attempt to IPO Aramco in the UK," RLAM said.

Early reports that Aramco is worth $2 trillion also came under question today from Steven Clapham, founder of research consultancy Behind the Balance Sheet.

Clapham told the BBC the high valuation is probably inflated and said the group lacks a strategy for growth.

"Obviously bankers have been salivating about this listing and will be pumping up its valuation ahead its IPO, but we haven't been able see its accounts yet," he said.

Aramco has previously said it will publish its finances ahead of its IPO, and today, chief executive Amin Nasser insisted the company would be open.

“We have always been transparent with our one shareholder, which is the government and with our board. When we are listed, and there are many shareholders we will be sharing data like any IPO-d company is doing, sharing data quarterly, when we share it, it will be a pleasant surprise for the rest of the industry,” he told the BBC.

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