Aramco IPO could be open to world markets

Updated 25 January 2016
0

Aramco IPO could be open to world markets

DAVOS: An initial public offering of Saudi Aramco could be on the local or international markets but would not include Saudi energy reserves, the company’s chairman told Al-Arabiya channel.
“The reserves would not be sold, but the company’s ability to produce from the reserves is being studied,” Khalid Al-Falih told the channel in an interview from Davos.
Al-Falih said there would be legal studies to make sure that what is offered is not the Kingdom’s crude reserves “but the company’s ability to convert the production of these reserves to a financial value that the owners can benefit from.
“The economic value of Saudi Aramco as a company is what will be offered. Naturally, the primary field of Saudi Aramco’s work is managing the reserves of Saudi Arabia,” Al-Falih said.
“The reserves belong to the state but the company’s ability to convert these reserves... into a financial value and at the same time for the company to have a portion of these profits will be part of the value of the company,” he told Al-Arabiya.
In an interview with The Economist earlier this month, Deputy Crown Prince Mohammed bin Salman said Riyadh might sell shares in Aramco as part of a privatization drive.


Britain unveils “short and sharper” code for companies

Updated 1 min 40 sec ago
0

Britain unveils “short and sharper” code for companies

LONDON: Companies in Britain must strive to rein in excessive executive pay and make boards more diverse under a new “short and sharper” corporate code, published on Monday.
The Financial Reporting Council (FRC) has updated its code of corporate standards for publicly listed companies, which must comply with it or explain to shareholders if they do not.
The new code comes as the watchdog, which oversees company governance standards and accountants, faces a review to see if it can uphold high corporate standards to maintain Britain’s attractions as a place to invest after Brexit.
British lawmakers have called for tougher corporate govenance standards following a row between food retailer Tesco and its suppliers and the collapse of retailer BHS and outsourcer Carillion. And shareholders have become much more active in terms of rejecting some executive pay deals.
“To make sure the UK moves with the times, the new code considers economic and social issues and will help to guide the long-term success of UK businesses,” FRC Chairman Win Bischoff said.
“This new code, in its short and sharper form, and with its overarching theme of trust, is paramount in promoting transparency and integrity in business for society as a whole.”
There is a new provision for greater board engagement with the workforce to understand their views — aimed at reinforcing an existing provision in law since 2006 which has had a patchy impact.
This, along with a requiremnent to have “whistleblowing” mechanisms that allow directors and staff to raise concerns for effective investigation, mark the biggest broadening of corporate standards in many years, the FRC said.
“The new code is much stronger on abilities to raise concerns in confidence,” said David Styles, FRC director of corporate governance.
It also emphasises the need for boards to refresh themselves, become diverse and plan properly for replacing top jobs.
It introduces a requirement for companies to explain publicly if a board chair has remain unchanged for more than nine years.
Company remuneration committees should also take into account workforce pay when setting director pay.
“To address public concern over executive remuneration... formulaic calculations of performance-related pay should be rejected,” the watchdog said.