Stipulated rules and regulations for listing on the London Stock Exchange should not be watered down to allow Saudi Aramco, the world's largest oil company, to float its shares in the UK, according to the boss of business lobby group Institute of Directors (IoD).
Riyadh is planning to sell no more than 5% of the company. Based on different methodologies, some analysts currently value the company at $2tn (£1.6bn). Unsurprisingly, all major stock exchanges in the world are attempting to woo the Saudis, with London, New York and Singapore at the front of the queue of suitors.
Aramco's initial public offering (IPO) of shares is expected in 2018, and Riyadh has already signed up a plethora of financial and legal advisers.
However, rules on UK listing stipulate state that 25% of shares should be listed to stop a single shareholder having too much dominance.
There is no suggestion the government would bend the rules, but proposals put forward by the Financial Conduct Authority (FCA) in January could allow for exceptions for "sovereign-owned companies."
In an interview with BBC Radio's Today Programme on Wednesday (2 August), Steve Martin, director general of the IoD, said such overtures would only result in "short-term gain."
"The UK has the highest standard of corporate governance and shareholders know that when they invest in a company, certain protections will be in place, especially to protect minority shareholders. We would not want to see those rules removed without good reason," Martin added.
The IoD boss also said it is in the interest of companies like Saudi Aramco "to adhere to our requirements because it demonstrates their commitment to good corporate governance."
The FCA said its pilot proposals do not involve the wider market but rather only sovereign-owned companies that "tend to be different from private sector individuals or entities in both their motivations and their nature."
Aramco said details of the IPO would be commented upon at the "appropriate time."