Former ESB workers seek restructuring of stock sales

About 4,000 former ESB workers who own shares in the company want the proposed market for the sale of their stock restructured to cut the risk of loss on their investment.

The State electricity supplier agreed to sell shares in the company to 10,000 workers 10 years ago, and subsequently transferred 5 per cent to them through an employee share option plan (Esop).

Following the company's annual general meeting (agm) in Dublin yesterday, the chair of the Esop's board, solicitor David Beattie, said the 4,000-plus workers who have since left the company and are thus entitled to sell their shares, are seeking a mechanism through which they can do this.

The Government has not yet given the go-ahead for ESB shares to be sold.

However, Mr Beattie said the proposed system for allowing them to do this could result in these stockholders being "short-changed", as it would result in a flood of shares on to the market.

Workers who hold shares in State companies can only sell them if they leave, and then only to staff still working in those organisations.

The "markets" for these shares operate on one day a year, shortly after the previous year's accounts have been published.

Those selling then have three years in which to dispose of their stock.

In the first two years, they can nominate the lowest price at which they are prepared to sell; if that price does not materialise, they are obliged to sell at the market price on the third year.

Mr Beattie said ESB Esop members wanted this tweaked so that there was a slower release of shares on to the market over a longer period of time.

The board is proposing that stockholders get the normal two-year period in which they can name their price.

In the third year, the board argues that they should only be compelled to sell one-third of their stake at the market rate, if this is lower than what they are seeking.

Mr Beattie said the board believes that, the following year, the shareholders should only be forced to sell half the remainder of the shares at the market rate, assuming they cannot get the asking price, and so on until they have sold their entire shareholding.

"The workers got the shares as part of an agreement that saw huge changes in the ESB that allowed it to reduce numbers from 10,000 to 6,000," he said.

"There is now a risk that the 4,000 or so who left will be short-changed."