Telecom staff raise stakes in IPO row

Quite what Telecom Eireann staff hope to gain by trying to guarantee themselves board representation following the sale of part of the Government's majority stake in the company is hard to discern.

After all, they have already got themselves board representation via Mr Dick Spring, who will represent the interests of the Employee Share Option Trust, through which the employees own 14.9 per cent of the company.

The union representing most of the workers, the Communications Workers Union (CWU), insists workers should be represented in their own right and not merely as shareholders. Such a proposal might be good practice but allowing staff which control only 15 per cent of the new company three board members would surely create problems in forming a cohesive board structure.

The Government is in a bind as conceding to the CWU might well raise fears among institutional shareholders in Britain and the US as well as at home. Such support is vital to the success of any flotation.