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UK risks reputation with Saudi Aramco wooing, warns lawmaker

Prince Mohammed's trip to London will be followed by talks in the US [Getty]

Date of publication: 5 March, 2018

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The UK could damage its 'good reputation' for corporate governance if it relaxes rules to allow the stock market listing of oil firm Saudi Aramco, a lawmaker has warned.

The UK could damage its good reputation for corporate governance if it relaxes rules to allow the stock market listing of oil firm Saudi Aramco, a lawmaker has warned.

Labour member of parliament Rachel Reeves - head of the UK parliament's business committee - made the warning on Monday ahead of the Saudi Crown Prince Mohammed bin Salman's visit to London on Wednesday.

"The UK currently has strict corporate governance rules and it's vital that they aren't watered down to secure the listing of Saudi Aramco," Reeves said, according to Reuters.

Reeves said such a move would send "a message which risks our reputation and which may ultimately damage our attractiveness to foreign investment".

"The City and highly-remunerated advisors may stand to benefit from the LSE landing Saudi Aramco but what does this potential listing offer in terms of investment or jobs in the UK?" she added.

The kingdom is preparing to sell a five percent stake in the state-owned oil giant, the crown jewel of the Saudi economy. It is expected to be the world's largest-ever IPO.

British business regulators are considering relaxing rules to allow state-controlled companies such as Aramco to list on the London stock market.

Prince Mohammed bin Salman's trip to the UK will be followed by talks in the US, possibly creating competition between London and New York over the lucrative public offering.

"Prince Mohammed may seek to foster a competitive rivalry between a UK government desperate to attract Saudi investment to offset the Brexit chaos and his US hosts, particularly over the Aramco IPO," said Kristian Ulrichsen, a fellow at the Baker Institute for Public Policy at Rice University in the United States.

A coalition of rights groups in the UK have said protests will be held in London on Wednesday against the state visit by the powerful crown prince.

Rights campaigners including the Campaign Against Arms Trade have denounced the visit because of Riyadh's human rights record and the Saudi-led military intervention in Yemen.

"This visit should not be taking place. The crown prince is the figurehead of a dictatorship with one of the worst human rights records in the world," Andrew Smith of Campaign Against Arms Trade told The New Arab.

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