UK Grid Dodges Labour Plans
UK gas and grid operator National Grid is moving abroad to protect shareholders from the threat of renationalisation embodied in the Labour Party's manifesto.
In a statement sent to NGW November 25, Grid said: “Labour’s proposals for state ownership of National Grid would be highly detrimental to millions of ordinary people who either hold shares in the company or through their pension funds – which include several local authority pension funds. To protect their holdings, and in line with our legal fiduciary duty to our shareholders, we have established holding companies in Luxembourg and Hong Kong. This has no financial benefit to the company and does not affect its day to day operations. It is solely to protect our shareholders’ interests.”
The Financial Times November 25 quoted lawyers saying that shareholders would have a better chance of protecting the value of their assets by relying on international treaties to which the UK is party, including the Energy Charter Treaty and bilateral investment treaties. SSE, another utility owning gas and power assets, is also reportedly opening up a wholly-owned office, in Switzerland. The UK goes to the polls to elect a government December 12.