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Royal Mail is facing a national security investigation as a billionaire investor known as the “Czech sphinx” prepares to take control of more than a quarter of the business.
Kwasi Kwarteng, the Business Secretary, has told the company that he “reasonably expects” Daniel Kretinsky to increase his shareholding to more than 25pc, a move that would trigger an investigation that could ultimately mean the billionaire is forced to sell down his stake.
In a statement, Royal Mail said it would fully cooperate with the review.
Mr Kretinsky, who currently holds 22pc of Royal Mail shares worth £150m through his private equity firm Vesa Equity Investment, told The Telegraph in June 2020 that he would “not exclude the possibility” of either strengthening or selling down his stake in the business.
The tycoon is a major investor in West Ham United football club and holds stakes in French newspaper Le Monde, as well as retail giants Sainsbury’s and Macy’s.
His estimated net worth of about $4.1bn (£3bn) is supported by his ownership of Energeticky a Prumyslovy Holding (EPH), the biggest energy group in Central Europe.
It comes as Royal Mail executives attempt to force through an overhaul of working practices in the teeth of fierce opposition from unions.
The 500-year-old business is also preparing for the biggest strike of the summer on Friday when more than 100,000 postal workers walk out over pay.
Mr Kwarteng gained sweeping powers to intervene in deals earlier this year through the new National Security and Investment Act, which is designed to protect British interests from overseas control.
He first used the legislation last month when blocked China’s Beijing Infinite Vision Technology from striking a deal with the University of Manchester to take control of its vision sensing technology.
Concerns over Mr Krentinsky’s next steps at Royal Mail echo fears linked to the French raider Patrick Drahi, who increased his stake in BT to 18pc in December.
The decision by the Franco-Israeli billionaire to boost his shareholding by 5.9 percentage points prompted anxiety in Westminster that he was pursuing a strategy of creeping control.
However, Mr Kwarteng announced on Tuesday that he would not force Mr Drahi to sell down his position, but could weigh another investigation if he buys more stock in the telecoms operator.
Royal Mail’s shares rose about 2pc to 275p following the news, but the company’s shares still remain 50pc lower compared to the start of the year.
The company, privatised by the former business secretary Vince Cable in October 2013, is facing the prospect of being split in two after losing ground to Amazon over parcel deliveries.
Management are also considering ripping up an agreement with unions that prevents them from outsourcing work or imposing compulsory redundancies.
The Communication Workers Union, which is also pursuing further strike action at BT, said its members were mobilising for industrial action to ensure they receive a “dignified, proper pay rise”.
Staff have been offered a 5.5pc increase if they accept changes to working practices.
On the strikes, a Royal Mail spokesman said: “We are losing £1m a day, and we need to change what we are doing to fix the situation and protect jobs.
“This change is also needed to support the pay package we have offered to CWU grade colleagues, worth up to 5.5pc.
“This is the biggest increase we have offered for many years and the CWU has rejected it.
“This would add around £230m to Royal Mail’s annual people costs when the business is already loss-making.”
