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Pearson freezes Libyan goverment stake in business
01.03.11 | Graeme Neill
Pearson has frozen the Libyan government's 3% stake in the media group amid continuing violence in the Middle Eastern country.
The Libyan Investment Authority (LIA), Libya's sovereign wealth fund, has 26.6m shares in Pearson or 3.27% of the issued share capital, meaning it is Pearson's fifth biggest shareholder.
However, following legal advice, Pearson said this morning the shares were in breach of a recent financial sanctions act passed in Parliament regarding the Libyan government and are now effectively frozen. The statement said: "As a result, Pearson has today informed the LIA and its nominees that Pearson will not register any transfer or pay any dividend in respect of the shares until further notice."
Speaking yesterday [29th February], Marjorie Scardino, c.e.o. of Pearson, said: "It is abhorrent to us what is happening in Libya and we have made it clear we are uncomfortable with the holding. We are in a terrible position, it is abhorrent for everyone at Pearson . . . We are a public company in a free market and we don't choose our shareholders they choose us. The basic premise is, this is one of those glitches in the free market system. Unfortunately we can't tell a shareholder to get off our register."