UK to examine Czech billionaire’s Royal Mail stake under security act

The UK government has notified Royal Mail that it is using its national security powers to examine a stake held in the postal company by Vesa Equity, the investment vehicle of Czech billionaire Daniel Křetínský.

The postal company on Thursday said it had received notification from Kwasi Kwarteng, the UK business secretary, that he suspected “arrangements are in progress . . . [that] will result in Vesa increasing its shareholding in Royal Mail . . . to more than 25 per cent”.

In its most recent filing on July 19, Vesa disclosed to the market that it increased its stake in Royal Mail by 1 percentage point to 22 per cent.

Křetínský is a Czech tycoon who built a fortune investing in infrastructure and power assets in central and eastern Europe. He has since diversified into various sectors from retail and media in western Europe, including in companies such as J Sainsbury and French newspaper Le Monde.

Křetínský, dubbed the “Czech Sphinx”, is also the co-owner of Sparta Prague football club and owns a 27 per cent stake in West Ham United, the English Premier League side.

The National Security and Investment Act allows the government to scrutinise transactions that it “reasonably suspects give rise to or may give rise to a risk to national security”. The act came into effect last year.

“Royal Mail will fully co-operate with this review and a further announcement will be made as and when appropriate,” the group said on Thursday.

Vesa said it had voluntarily notified authorities of its intention to raise its stake above 25 per cent, despite not knowing whether Royal Mail “falls within the scope of the NSI regime’s mandatory filing requirements”.

Vesa made the notification “out of an abundance of caution”, it said, adding that it would co-operate with any review.

From January to March, the UK government received 222 notifications about transactions that might need to be reviewed on national security grounds, 17 of which were referred for a formal review.

Deals that have been referred include the takeover of silicon wafer producer Newport Wafer Fab by the Dutch subsidiary of Chinese company Wingtech.

The UK government said this week it would not use its powers under the act to block or unwind French group Altice’s stake in BT, the former British telecoms monopoly.