Who owns Royal Mail and why has the Government written to them?
Royal Mail has been referred by a committee of MPs for breaching its requirement to deliver letters across the country six days a week.
The Communication Workers Union (CWU) had been holding strikes in protest of pay and working conditions, with 115,000 workers walking out on Thursday, February 16, and in the run-up to Christmas.
On Friday, the Business, Energy, and Industrial Strategy Committee said in a strongly worded letter that the company had “systematically failed to deliver” the so-called universal service obligation.
The committee also said Royal Mail chief executive Simon Thompson was “not wholly accurate” in answers he gave to MPs on the use of technology to track and discipline workers.
“Royal Mail denied having any knowledge of the tracking of postal workers using technology and said evidence of this practice, and of managers disciplining postal workers using such data, was due to non-compliance with Royal Mail policy,” said the committee.
A Royal Mail spokesperson said, “Royal Mail answered in detail the questions asked by the committee – in person and in correspondence – about the company’s performance, finances, and service delivery.
“We reject the suggestion that Royal Mail may have misled the BEIS Select Committee in that process.”
Previously, the parent company of the delivery giant has shared that it’s expecting a £350 million operating loss for the year after being hit by industrial action.
But what is Royal Mail and who owns it?
Who owns Royal Mail?
Royal Mail is a public service that was once managed under a government department.
In 2011, the Government passed the Postal Services Act, which gave the green light for 90 per cent of Royal Mail to be privatised, while 10 per cent remained with Royal Mail employees.
In 2013, Royal Mail was floated on the London Stock Exchange for the first time in its 500-year history.
The Government initially retained a 30 per cent stake in Royal Mail, but sold its remaining shares in 2015 under Chancellor George Osborne.
It is now a public limited company, meaning it is owned by shareholders. It trades on the FTSE 250 as RMG, having been demoted from the FTSE 100 in June this year.
“The Government’s decision on the sale is practical, it is logical, it is a commercial decision designed to put Royal Mail’s future on a long-term sustainable business,” the then-business minister Vince Cable said.
Royal Mail’s privatisation was controversial, and led to widespread strikes called by the CWU. The company’s share price also shot up after it was floated on the stock exchange, leading to accusations it had been undervalued by the Government.
The company’s biggest shareholder is Czech billionaireDaniel KÅetínský, who controls the group Vesa Equity Investment. He has been dubbed the ‘Czech Sphinx’, due to his enigmatic business approach.
KÅetínský, who also has stakes in Sainsbury’s and West Ham United, became the largest shareholder at Royal Mail in 2020.
The 46-year-old billionaire is known for keeping a low profile and has not commented publicly on the strikes.