UK ministers summoned for fresh grilling on Royal Mail sell-off

LONDON, April 7 Mon Apr 7, 2014 8:14am EDT

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LONDON, April 7 (Reuters) - British Business Secretary Vince Cable was on Monday summoned to face lawmakers for a third time over the government's privatisation of Royal Mail, after a watchdog report last week said the postal company had been sold off too cheaply.

In October last year the government sold 60 percent of Royal Mail at 330 pence per share, ending 500-years of state control and raising 2 billion pounds for the public purse.

The company's share price has since risen by as much as 87 percent, drawing heavy criticism from trade unions and the opposition Labour party who say the government botched the deal. A report by the National Audit Office last week said taxpayers had been short-changed by at least 750 million pounds.

Cable will appear on April 29 alongside fellow minister Michael Fallon at a parliamentary inquiry into the sell-off.

While the inquiry does not have statutory powers, its criticism of the sale so far has proved embarrassing to the government, which continues to staunchly defend the sale.

Ministers had hoped to win political capital by completing a privatisation that three previous administrations had tried and aborted, but the wrangle over pricing has instead left them facing accusations of incompetence.

Cable appeared before the committee twice last year, once before the initial public offering (IPO) had been completed, and again subsequently to face questions over how it had reached its valuation. On both occasions he has faced heavy criticism. (Reporting by William James; Editing by Toby Chopra)

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