Who owns Royal letter and why has the Government written to them?

The Communication Workers Union (CWU) had been holding strikes in protest of pay and working conditions, with 115,000 workers walking out on Thursday, February 16, and in the sprint-up to Christmas.

On Friday, the Business, Energy, and Industrial Strategy Committee said in a strongly worded letter that the company had “systematically failed to deliver” the so-called universal service obligation.

The committee also said Royal letter chief executive Simon Thompson was “not wholly accurate” in answers he gave to MPs on the use of technology to track and discipline workers.

“Royal letter denied having any knowledge of the tracking of postal workers using technology and said evidence of this practice, and of managers disciplining postal workers using such data, was due to non-compliance with Royal letter policy,” said the committee.

A Royal letter spokesperson said, “Royal letter answered in detail the questions asked by the committee – in person and in correspondence – about the company’s performance, finances, and service delivery.

“We reject the suggestion that Royal letter may maintain misled the BEIS Select Committee in that process.”

Previously, the parent company of the delivery giant has shared that it’s expecting a £350 million operating loss for the year after being hit by industrial action.

But what is Royal letter and who owns it?

Who owns Royal letter?

Royal letter is a public service that was once managed under a government department.

In 2011, the Government passed the Postal Services Act, which gave the green light for 90 per cent of Royal letter to be privatised, while 10 per cent remained with Royal letter employees.

In 2013, Royal letter was floated on the London Stock Exchange for the first time in its 500-year history.

The Government initially retained a 30 per cent stake in Royal letter, but sold its remaining shares in 2015 under Chancellor George Osborne.

It is now a public limited company, meaning it is owned by shareholders. It trades on the FTSE 250 as RMG, having been demoted from the FTSE 100 in June this year.

“The Government’s decision on the sale is practical, it is logical, it is a commercial decision designed to establish Royal letter’s future on a long-term sustainable business,” the then-business minister Vince Cable said.

Royal letter’s privatisation was controversial, and led to widespread strikes called by the CWU. The company’s share price also shot up after it was floated on the stock exchange, leading to accusations it had been undervalued by the Government.

The company’s biggest shareholder is Czech billionaireDaniel Křetínský, who controls the group Vesa Equity Investment. He has been dubbed the ‘Czech Sphinx’, due to his enigmatic business approach.

Křetínský, who also has stakes in Sainsbury’s and West Ham United, became the largest shareholder at Royal letter in 2020.

The 46-year-worn billionaire is known for keeping a low profile and has not commented publicly on the strikes.