AN INFLUENTIAL investor group has called for a change to the law to give the City regulator beefed up powers against overseas firms with a small percentage of independently owned shares listing in London.
The comments from the trade body, which represents the UK’s top institutional investors and pension funds, follow controversy around firms such as ENRC, Essar Energy and Asia Resource Minerals – formerly known as Bumi – which saw their share prices tumble amid high-profile corporate governance disputes. The firms all had controlling shareholders, with critics arguing that inadequate regulations meant minority investors got burnt.
The ABI is calling for change despite the Financial Conduct Authority (FCA) introducing new rules to protect minority shareholders last month.
“We welcomed the changes the FCA have been consulting on as a positive step,” an ABI spokesperson said. “We would however still like a change in the law to give the FCA direct recourse to controlling shareholders rather than just for the companies, as is now the case.”
“The FCA brought in a suite of changes to the listing regime in May 2014,” said an FCA spokesperson. “This responded to investor concerns over the governance of premium listed companies with a controlling shareholder, and the need to protect the interests of minority shareholders.”