Britain's Royal Mail privatisation was tarnished by a fear of failure and poor advice from state-appointed banks, according to UK lawmakers. Melanie Ralph looks at what lessons can be learnt from the inquiry into the two billion pound share sale.
Return to sender... Unfortunately for the government, they don't have that privilege. Shares in Royal Mail have already been delivered to the private sector, and the way it was done is being criticised. A parliamentary committee says the government could've got a lot more for tax payers from the sale. Britian sold a 60% stake in the postal service for three pounds thirty a share, and the shares rose 87 percent straight after. Although the shares have retreated back to nearer five pounds, the committee say the government should have raised the IPO price when it was clear demand was high. It also criticised a preferential allocation of shares to Lazard. And highlighted that UBS and Goldman Sachs - who were leading the sale - would earn fees from trading the shares on behalf of preferred investors, many of them clients. Joe Rundle is from ETX Capital. (SOUNDBITE) (English) JOE RUNDLE, ANALYST, ETX CAPITAL, SAYING: ''It definitely could've been handled differently. They could've sold it for a lot more money, and go more money for the tax payer. Should it have been, I think it was politicised, more they were trying to pave the way for their sale stakes in Lloyds and RBS, so they needed supportive shareholders. There's going to be lots of criticism today for the government. They sold off an asset cheap and tax payers don't really like that.'' Reports suggest the tax payers lost out on about a billion pounds from the Royal Mail deal. The government's business secretary Vince Cable says future deals could be handled differently. (SOUNDBITE) (English) VINCE CABLE, BUSINESS SECRETARY, SAYING: ''I think the basic model the government used was right and we've achieved what we wanted to achieve. We're always willing to explore new ideas and the national audit office suggested that we look at new ways of floating shares that maybe hasn't been tried before, and we'll be happy to do that, and I've asked Lord Myners to head up a group of experts who can give me some more advice on that.'' Many investors point out that with increased competition from the likes of Amazon, the path ahead for Royal Mail will be a tough one at best. And the government stands by its actions, insisting share prices are volatile anyway. Hoping perhaps that the controversy won't spoil its aim of raising 20 billion pounds from the sale of other public assets - such as stakes in the Eurostar rail link, Royal Bank of Scotland and Lloyds - over the next six years.