U.K. Treasury Panel Chairman Seeks Review of RBS Sale Adviceby
British government sold RBS stock at a loss last August
Rothschild, U.K. Financial Investments advised on sale
The chairman of the U.K. Parliament’s Treasury panel demanded a review of the government’s money-losing sale of Royal Bank of Scotland Group Plc stock to ensure the deal was handled properly.
Lawmaker Andrew Tyrie asked the National Audit Office to study the advice given to Chancellor of the Exchequer George Osborne before last August’s sale of 2.1 billion pounds ($3 billion) of RBS shares at 330 pence each, below the 407 pence price at which the government would have broken even. The Treasury received the stock following a 45.5 billion-pound bailout of the bank at the height of the financial crisis.
“Parliament and the public will want reassurance that the chancellor’s decision to sell the first tranche of shares in RBS in August 2015 has secured the best value for money for the taxpayer, and was not influenced by political expediency,” Tyrie said in a statement Friday.
Osborne got advice on the transaction from Rothschild and U.K. Financial Investments, a company established by the government to manage state-owned banks such as RBS. He has since held off selling more stock as the bank continues to log losses after eight years. RBS closed in London Friday at 230.60 pence.
The chancellor said prior to last year’s sale that, while the government would get a lower price than it paid for the stock in the bailout, “the longer we wait, the higher the price the whole economy will pay” as politicians shouldn’t be running companies.