As far back as I can recall the Labour Party in Britain has been dead set against privatization so it is somewhat ironic that New Labour’s first flotation of a former government department has been plunged into controversy by a series of misfortunes.
The £1.1 billion flotation of state-owned Qinetiq on the London Stock Exchange is planned for next month but concerns have been expressed over certain links the company has with the Ministry of Defence.Qinetiq is part of a consortium short-listed for two MoD contracts worth up to £10 billion for armed forces training and critics have voiced concerns that:
- Qinetiq’s executive management will receive large windfalls from the flotation as will the company’s private equity backer.
- There has been a reluctance to give the public a share of the float;
- The MoD finance director is a director of Qinetiq, although there is no suggestion that his work is influencing the Government’s selection of preferred bidders;
- A non-executive director of Qinetiq is also a director of investment bank Credit Suisse which will receive an estimated £14 million as one of three firms running the float.