Concerns: Carolyn Fairbairn, director general of the Confederation of British Industry
Business chiefs have called for an overhaul of takeover rules to stop vulture investors repeating the fire sale of British engineering stalwart GKN.
Carolyn Fairbairn, director general of the Confederation of British Industry, said deals should always be in the long-term interests of UK business rather than a chance to get rich quick.
The sale of 259-year-old GKN was forced through by hedge funds which had bought 20 per cent of the shares in anticipation of a fast profit.
It gave them control of enough votes to overwhelm long-standing investors who wanted the firm to remain independent.
As a result, GKN is now being bought by asset-stripper Melrose and will be sold off piecemeal to enrich its new owners.
Fairbairn said the rules could be reformed so that only long-term investors vote on future deals.
Speaking at the University of Manchester, she said: ‘I am never in favour of regulation in the heat of the moment. Now the dust is settling I think that is something worth looking at.’
Former CBI director general Sir Richard Lambert, at the same event, said markets in Britain are still dominated by ruthless speculators.
He said: ‘The people who took the decision have no interest in GKN’s affairs beyond the next two weeks.
‘I can’t think that was right.’