By Agence France-Presse Britain scrapped a ceiling of 49.5% on foreign ownership of shares in two British companies, BAE Systems PLC and Rolls Royce PLC. The government also lifted a rule that all executive directors at BAE and 75% of executives at Rolls Royce must be British, reducing the requirement in both cases to a majority of the board. But the government left in place rules that prevent any single foreign shareholder, or group of foreign shareholders acting together, owning more than 15% of the companies shares. The rules were introduced when the two companies were privatized to protect them from being taken over by foreign bidders. But the government agreed to scrap the rules at the request of the two companies, which had complained that they would prevent foreign investors from buying any more of their stock, damaging their share prices. Foreign investors already own 48.79% of BAE shares. "The government's agreement to relax these restrictions is most welcome and reflects the development of the company into a more global business operating in a global market," says BAE Chairman Richard Evans. The move could pave the way for changes in foreign ownership restrictions on several other privatized British companies, including British Airways. Copyright Agence France-Presse, 2002
