FTSE International, the company that determines the weighting of the stock index, yesterday reversed its decision to downgrade the investability weighting of Liberty International, in an unexpected victory for the property company.
Consequently, LibertyÃ¢â¬â¢s FTSE-100 weighting will revert to 100% from its current 75% on 22 December. The company was downgraded in September, after which its share price fell as index tracker funds dropped their excess holdings.
The shares were downgraded following a dispute over the number of shares controlled by Chairman, Donald Gordon, and his family. FTSE International determined that Gordon and his family controlled around 32% of the companyÃ¢â¬â¢s shares.
According to the FTSE committeeÃ¢â¬â¢s rules, a company must have between 75% and 100% of its shares available for purchase in the market in order to receive the full weighting in any index. Shares owned by founders, their families and directors are exempt from its definition of Ã¢â¬Ëfree floatÃ¢â¬â¢.
Liberty claimed that GordonÃ¢â¬â¢s family owned 21%, disputing that it had a continuing relationship with StanLib, owner of a substantial stake in the company. Liberty employees own 1.7% of the company, and Standard Bank of South Africa and its affiliates, which include Liberty group, owned 8%.
Commenting on the decision, FTSE International said: Ã¢â¬ÅThe Committee when reaching their [original] decision, failed to take into consideration a substantial and material fact, which would have influenced the decision of the Committee if it had been considered.Ã¢â¬Â