Pearson to investigate Libyan stake

Pearson to investigate Libyan stake

Pearson has begun a legal process to ascertain whether the stake held by its fifth biggest shareholder, the Libyan Investment Authority, needs to be frozen after the government moved to freeze the assets of Muammar Gaddafi and five members of his family.

The LIA, Libya’s sovereign wealth fund, has invested £250m in the Penguin parent, according to the Guardian. Lawyers for Pearson are filing legal documents to determine who exactly is the beneficial owner of the stake.

"It is abhorrent to us what is happening in Libya and we have made it clear we are uncomfortable with the holding," said Marjorie Scardino, chief executive of Pearson. "We are in a terrible position, it is abhorrent for everyone at Pearson. We do not know what the freeze notice covers at this point."

"We did meet with one of their financial representatives, a European – he was a middleman, not really a representative of the authority," she continued. "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."

The LIA upped its stake in Pearson to marginally over 3% last year.

The company said that the protests in the Middle East had not had a massive impact on its international education business. The division made £1.2bn in revenues last year with the Middle East accounting for about 5%, some £62m.