Ownership of the Royal Mail
Section 2: Report on decision to dispose of shares in a Royal Mail company etc
31.This section places a duty on the Secretary of State to report to Parliament when a decision has been made to undertake a relevant disposal of shares or share rights in a Royal Mail company owned by the Crown. The Secretary of State also has a duty to report if he has decided that another person (e.g. Royal Mail Holdings plc or Royal Mail Group Limited) may undertake such a disposal.
32.The Secretary of State’s report must include: the kind of disposal that will be undertaken, e.g. whether it is subject to an auction or an Initial Public Offering; the timescale for the disposal process; and the objective intended to be achieved by the disposal.
33.The Secretary of State's report must also give information about the expected commercial relationship, after the proposed disposal, between the Royal Mail company in question and any Post Office company (as defined in section 6).
34.When shares are proposed to be put into the employee share scheme (as defined in section 3) for the first time, the Secretary of State's report must also give details of the scheme.
35.A relevant disposal is defined in subsection (5) as the issue or transfer of shares or share rights that reduces the proportion of a Royal Mail company owned by the Crown.
36.Subsection (6) defines a Royal Mail company as a company that provides a universal postal service and is or has been in the same group as:
Royal Mail Holdings plc (“the original holding company”) or
another company that is or has at any time been a Royal Mail company
37.The latter is intended to ensure that the definition covers any companies providing a universal postal service that may no longer be a subsidiary of Royal Mail Holdings plc when a relevant disposal is made.
Section 3: Establishment of employee share scheme
38.Subsection (1) requires that the Secretary of State must ensure that arrangements have been made for the establishment of an employee share scheme before a relevant disposal is made in relation to a Royal Mail company (as defined in section 2).
39.Subsection (2) requires that the arrangements made under subsection 1 must ensure, either at or before the time the Crown no longer owns any of the company, that the proportion of it owned by or on behalf of the employee share scheme is or has been at least 10%.
40.Subsection (3) clarifies that shares held directly by employees, and shares held by the scheme on behalf of employees, are to be included within the calculation of the percentage set out in Subsection (2).
41.Subsection (4) defines an employee share scheme as being a scheme for encouraging or facilitating the holding of shares or share rights by or for the benefit of persons who are or include employees of a Royal Mail company (or another company in the same group).
