Royal Mail ‘Czech Sphinx’ stake hit by national security inquiry

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Royal Mail stake hit by national security probe: Billionaire tycoon dubbed ‘Czech Sphinx’ plots to boost stake

A Czech tycoon’s plans to increase his stake in Royal Mail will be scrutinized by the government on national security grounds, it has been learned.

Billionaire Daniel Kretinsky, who has built his fortune on infrastructure and energy assets in Central and Eastern Europe, told authorities that his Vesa Equity Investment vehicle, which already owns 22% of the FTSE 250 postal service, plans to increase its stake above 25 percent. hundred.

Dubbed the “Czech Sphinx” by the City, Kretinsky has invested in other British companies, including supermarket chain Sainsbury’s, and also has a 27% stake in West Ham United.

Trigger event: Billionaire investor Daniel Kretinsky – who has been dubbed the ‘Czech Sphinx’ – plans to increase his stake in Royal Mail above 25%

But Business Secretary Kwasi Kwarteng said the tycoon’s decision to increase his stake in Royal Mail would be a ‘trigger event’ under the National Security and Investments (NSI) Act, which allows the government to review and even block agreements if it believes they raise national issues. security concerns.

Royal Mail said it would ‘cooperate fully’ with the review while Vesa said it had reported its plans to the government ‘out of an abundance of caution’.

Royal Mail shares rose 1.8%, or 4.8p, ​​to 266.1p.

Kwarteng’s intervention came just days after allowing billionaire Patrick Drahi to retain his 18% stake in telecommunications giant BT after calling the tycoon’s stake for review in May.

The decision reignited fears that Drahi could make a takeover bid for BT and also raised questions about the Business Secretary’s willingness to use powers under the NSI Act.

Kwarteng’s assessment of Kretinsky’s stake in Royal Mail is likely to be seen as another key test.

The review comes as Royal Mail faces an ongoing battle with unions with around 115,000 workers set to stand down for four days in a row over their pay.

The Communications Workers Union (CWU) demands, which were revealed by the Mail last Sunday last weekend, include a pay rise in line with the rate of inflation, which has soared above 10% , as well as the working hours of its members. reduced and people over the age of 55 are assigned lighter tasks.

Strike threat: Royal Mail faces ongoing battle with unions with around 115,000 workers set to walk out for four days in a row over pay

Strike threat: Royal Mail faces ongoing battle with unions with around 115,000 workers set to walk out for four days in a row over pay

The union also rejected an earlier offer from Royal Mail of a standard 2 per cent pay rise, with a potential 5.5 per cent if certain ‘changes’ to working practices were agreed.

The dispute took a dramatic turn after the company threatened to tear up an agreement signed with the CWU in 2013.

The contract, made when Royal Mail was privatized, prevents it from employing new workers on terms different from those of existing staff, as well as from contracting out, making compulsory redundancies or using workers temporary.

But management see the contract as an obstacle to vital changes in the business and are gathering evidence that will allow them to trigger a break clause in the deal, the Telegraph reported.

Bosses previously stressed that Royal Mail needed to make changes to its business in order to compete with rivals such as Amazon.

Earlier this month the group warned it would be ‘significantly loss making’ this financial year as a result of the strikes after previously admitting it is hemorrhaging the equivalent of £1million in losses every day.

The company has also threatened to shut down operations if the crisis escalates.

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