Simon Nixon's City View: why investment bankers aren't on the shareholders' side

Investment bankers - champions of shareholder rights? Their involvement in the recent Arcelor bid and Rosneft IPO demonstrate that they don't.

Investment bankers like to present themselves as champions of shareholder rights, fighting for the interests of investors at the heart of the capitalist system. But for the most part, this is bunkum. Shareholders, by and large, don't pay fees. That's left to corporate boards. And where the interests of management and shareholders diverge well, what do you expect? Big houses don't come free.

This was bought home to me by two events in the last fortnight. The first was a conversation with a senior figure at one of the banks advising Arcelor on its defence against a bid from Lakshmi Mittal. It still seemed the Luxembourg steel group would see off the Indian tycoon. But a number of shareholders dubbed the "Dirty Thirty" had protested at the Arcelor board's sneaky attempts to force through a dubious deal with Russian steel group Severstal.

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Simon Nixon

Simon is the chief leader writer and columnist at The Times and previous to that, he was at The Wall Street Journal for 9 years as the chief European commentator. Simon also wrote for Reuters Breakingviews as the Executive Editor earlier in his career. Simon covers personal finance topics such as property, the economy and other areas for example stockmarkets and funds.