Sat. May 28th, 2022

The main article “LV’s abused defense of its private equity sale” (FT View, November 30) misses the key point. In my opinion, it is unethical for a mutual company (except, perhaps, one that faces insolvency) to allow itself, or to be allowed to be acquired by, another than another mutual company or a other form that preserves the public interest. The “owners” are technically “owners”, but it is an artificial artifact of their purchase of insurance (and / or, in other cases, banking services that may be asset or even liability based).

Mutual companies are for organizational purposes and should in fact be a form of public benefit corporation, with “ownership” a fictitious concept. The fiction is emphasized by its multigenerational nature, which sometimes spans centuries, with “ownership” lapse without compensation when insurance is paid out or banking is terminated.

The corporate assets are the accumulation of multiple generations of value belonging to a succession of owners who have passed the value on to the current policyholders without compensation for the value received. If you were technically rather than ethically minded, the value of “ownership” should have “separated” or returned to government at the expiration of each relationship.

This has long been a problem in the US where revered but greedy business “leaders” have exploited the structure – as opposed to the structural intention – to make a personal profit. Funds were created to exploit this, which is the victory of technical financial engineering over public interest.

I have long believed that some honored business leaders and board fiduciaries of mutual entities – honored both before and after demutualizing their employers and companies – do not really deserve honor at all.

The main article dealt with facts regarding a transaction that have no particular interest to me, and the opportunity to take a stand based on ethics rather than superficial business practices was completely missed.

Howard S Stein
New York, NY, USA

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