Royal Mail: Lazard Being Quizzed By MPs Over IPO Price
Royal Mail: Lazard Being Quizzed By MPs Over IPO PriceReuters

The Public Accounts Committee confirmed that the independent financial adviser for the controversial sale of Royal Mail will be quizzed by politicians over the delivery service's IPO price.

The PAC spokesperson said that Lazard will give evidence to the committee, which is led by Margaret Hodge, on 30 April.

At the beginning of this month, the National Audit Office (NAO) slammed Britain's business secretary Vince Cable for undervaluing the Royal Mail's IPO price, which was set at a maximum price of 330p-a-share.

The stock price rocketed by 38% on its first day of public trading and the shares have since risen to around 500p.

The NAO's findings state that the government's overly cautious approach has shortchanged the nation, while providing an easy killing for "priority" investors such as banks and hedge funds.

"The Department was very keen to achieve its objective of selling Royal Mail, and was successful in getting the company listed on the FTSE 100," said Amyas Morse, head of the NAO.

"Its approach, however, was marked by deep caution, the price of which was borne by the taxpayer."

The Royal Mail was privatised by the UK government in October in a controversial flotation on the London Stock Exchange. It was worth around £6bn (€7.3bn, $10bn) on 23 December.

Meanwhile, Cable and Michael Fallon face another parliamentary grilling over the controversial sale of Royal Mail.

Parliament's business, innovation and skills (Bis) select committee has called the two ministers responsible for Royal Mail's privatisation back for another hearing on 29 April.

Cable rubber stamped the sale of Royal Mail at an offer price of 330p per share when it was floated onto the London Stock Exchange. He and Fallon, minister of state for enterprise, took advice on the offer price from investment banks Goldman Sachs and UBS.

The government's critics said the privatisation had been botched and taxpayers left short-changed by as much as £750m, a charge Cable and Fallon deny.

Ed Miliband, leader of the Labour party, accused Prime Minister David Cameron of selling Royal Mail to his City of London financier friends at "mates' rates".

However Cable has defended Royal Mail's privatisation as a success. He said the government could not risk a failed IPO and so set an offer price to ensure a balance between selling all of the available stock and value for taxpayers.