- 4 updates
Six senior bankers have been explaining to MPs why their advice led the government to undervalue Royal Mail when it was privatised earlier this year.
ITV News' Economic Editor Richard Edgar has been following proceedings:
Goldman Sachs and UBS were the investment banks that ran Royal Mail's flotation last month, while JP Morgan, Citibank and Deutsche Bank missed out on running the share sale, while broker Panmure Gordon attacked what it said was the undervaluation of Royal Mail.
The share price was set at 330p, valuing Royal Mail at £3.3 billion, but the shares jumped by over a third on the first day of trading, and broke through the 500p mark within a week.
The share price yesterday stood at more than 550p.
The CWU said this means the Government undervalued the company by more than £2 billion.
The Communication Workers Union (CWU) said any further payments should be withheld on the basis that banks undervalued the company.
General secretary Billy Hayes said:
The Government has been urged to withhold any more payments to banks which advised it on its controversial privatisation of the Royal Mail amid continuing complaints that the taxpayer has lost hundreds of millions of pounds over the sell off.
The sale will come under the spotlight again today when MPs question bankers who provided valuations of the company before the flotation.
Those due to appear are John Mayne, JP Morgan; Ben Store, Citibank; Gert Zonneveld, Panmure Gordon; James Agnew, Deutsche Bank; James Robertson, UBS and Richard Cormack, Goldman Sachs.