International Power joins US Sarbox exodus

Three FTSE 100 heavyweights have pulled out of US listings in a seven-day period, as the trickle of exits threatens to become an exodus.

Last week, International Power said it was followinG ICI and United Utilities in a withdrawal. International Power’s statement said only that it was pursuing the move ‘with the aim of reducing compliance costs’.

The US is trying to water down the Sarbox rules, but the exits suggest it may be too little, too late.

ICI said that costs incurred using external suppliers and auditors to provide ongoing support to Sarbanes-Oxley compliance outweighed the usefulness of being listed in the US. ICI is now expecting to generate cost savings of £4m a year after jettisoning the onerous demands.

In a statement, ICI CFO Alan Brown said: ‘It no longer makes sense to submit to the reporting obligations under the Exchange Act. This decision is consistent with our strategy of improving our long-term cost effectiveness as it reduces complexity without detracting from the integrity of our governance and control processes.’

All three companies will continue to comply with the Combined Code on Corporate Governance and the UKLA listing rules.

For more go to www.sec.gov