When David Cameron visits Kazakhstan next week to expand trade links with the vast central Asian country, the British prime minister might ponder a recent piece of business. Eurasian Natural Resources Corporation, the Kazakh company that has tarnished the City of London, wants to go private again, angering investors amid a UK Serious Fraud Office inquiry.
The ENRC debacle and the dubious behaviour at other companies including Bumi, after Nat Rothschild’s ill-conceived effort to combine an Indonesian mining group with a UK-listed company, have left London struggling to restore its credibility. New listings rules are coming next month to stop City investors being exploited in the same way again.
It makes sense to protect the City, and to ensure that UK shareholders are not abused by emerging market oligarchs. But the rules are in danger of going too far, treating every company – UK or foreign – with a leading shareholder as a hazard to other investors. This could undermine London’s traditions without solving the actual problem.