‘My blood is boiling!’: Former pensions minister blasts US firm over Aviva attack
Two former ministers yesterday voiced their alarm at a ‘cynical’ US investment firm targeting Aviva’s army of private investors and trying to buy their stock on the cheap.
The criticism from Ros Altmann, a former pensions minister, and John Glen, an ex-Treasury minister, will pile pressure on the Financial Conduct Authority (FCA) to act.
FCA chief executive Nikhil Rathi is likely to be questioned over the ‘scam’, uncovered this week by the Daily Mail, when he appears before MPs on the Treasury select committee – of which Glen is a member – today.
The uproar centres on US firm Litani, which has written to 100,000 of Aviva’s retail investors seeking to buy their shares for £5.30, well below their closing price of £6.61 yesterday. Aviva has in turn written to them to warn against accepting.
Altmann said: ‘My blood is boiling. It is a cynical attempt to exploit the vulnerable shareholders, who will most likely be elderly, who could be bamboozled by the technical terms being used and the way it’s being presented to them and not understand what’s going on.
Shock: Former pensions minister Ros Altmann, pictured, and ex-Treasury minister John Glen are piling pressure on FCA to block US firm Litani’s bid to buy Aviva shares on the cheap
‘The brazen brass neck of this thing is unbelievable.’
Glen said: ‘This is a worrying development that needs urgent examination, the worst sort of “plausible” offer that does not do justice to the underlying reality.
“Buyer beware” has to be the first principle, but the FCA will not want to see this replicated.’
It comes after Aviva lost a High Court battle to prevent Litani from being given access to its shareholder register, opening the door for it to write to private shareholders.
Aviva has a large base of around 500,000 retail investors, many of whom received shares when its predecessor Norwich Union was demutualised.
Now there are fears that other major listed firms with historically large shareholder bases, such as British Gas owner Centrica and BT, could be targeted.
The FCA said that it was aware of Litani’s actions and that investors should ‘carefully consider their options before making a decision’.
But Altmann said: ‘This almost looks like an FCA-authorised scam to me. If the FCA can’t see that, I am deeply concerned. We don’t want to shut the stable doors after the horse has gone; we want to keep the doors shut so everyone’s protected.
‘Is the FCA not concerned, and should this not be banned?’
Altmann argues that financial services legislation could be amended to ‘stop this in its tracks’.
This could include changing the rules about access to the shareholder register, barring mini tenders offering to buy shares at a heavily discounted price, and tightening the requirements on FCA-authorised ‘sponsors’ used in such offers.
Lawyers representing Litani said the firm declined to comment.
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