The delisting party goes on ... for now

ALL shareholders are supposed to be equal. But, to paraphrase George Orwell, some shareholders are more equal than others.

Not before time, the Financial Services Authority has announced plans that should put an end to one of the more pernicious 'unfairnesses' in the market. That is the power of a company's directors to take it off the stock market with no reference to its shareholders.

SFI, the group that owns the Slug and Lettuce chain, advertising group Cordiant and cigarette lighter company Ronson have all delisted this year. Others are ready to follow suit.

The FSA has ruled that, in the future, companies will not be permitted to move off the market without the support of 75% of shareholders - a policy that the junior AIM market has already adopted.

Companies can argue that minority shareholders are still able to remain on board, even if their shares are no longer quoted. But shares in an unquoted company are highly illiquid, and most delisted companies do not set up mechanisms to help investors sell - or possibly buy.

Quite frequently in these situations, there is a dominant family shareholder - often represented in the form of the chairman - who makes life even more difficult for minority holders.

Just look at the goings on at Monsoon, or even the suspicion that Rupert Murdoch plans to use his dominant position at BSkyB to install his son as its chief executive.

Interestingly, some evidence suggests that family-controlled companies actually perform better than those with exemplary corporate governance standards, though share prices tend to reflect market doubts about where these profits are likely to end up.

Small shareholders have always had a rum deal as they have never had the access to companies that large professional investors enjoy. In the delisting fiasco, large shareholders are beginning to experience how it feels to be trampled on.

The FSA's intervention is welcome, but it will not act until the summer of 2005. All this does is open a comfortable window of opportunity for any company that wants to go private without bothering to pay a premium to abuse its investors unimpeded.

Public service

SHADOW Chancellor Michael Howard and his colleagues on the Tory Treasury team batted admirably last week on the fairly sticky wicket of how their promised tax cuts could be reconciled with their pledges to improve public services.

Was this just the latest example of dishonest disc-jockey politics, in which everyone is a winner and there are cash prizes and free T- shirts galore?

Actually, no. Senior sources in the Conservative camp have a very clear idea of how to balance the books. They believe that at least half of the 350,000 extra public sector posts created during the past five years are accounted for by useless 'joke jobs' of the co-ordinating and outreaching variety.

Axing these jobs would save more than £5bn a year. This represents about 1.5p off the basic rate of income tax. There is no doubt that the Tories are sincere when they say the economy would be healthier if these people were 'freed up' for productive employment in the private sector.

But they believe there are two bonuses in balancing the books in this way - firstly that the public will never notice the absence of diversity officers or whoever, and secondly that those losing their jobs represent Labour's rock-solid payroll vote.

The sums add up, they think. But saying so out loud could revive the 'nasty party' label.

Barclays' chief of change

SO Matt Barrett is to become chairman of Barclays - but not until 2005. Until then, he will remain the chief executive.

Meanwhile, his chosen successor, finance director John Varley, will have to wait in the background twiddling his thumbs.

Though crumbs have been thrown at those who have been passed over, it will surely not be long before the City's headhunters come knocking for the likes of Bob Diamond, Barclays' highly regarded head of investment banking. This outcome to a succession crisis entirely of the bank's own making is a real dogs' breakfast.

Barclays will have its work cut out to convince shareholders that this mess means the bank is safe in Barrett's hands.

Varley - who married into the Barclays family - and Barrett must get moving and deliver the transforming takeover so clearly needed to keep the bank on the world stage.