The takeover of Royal Mail has been suspended as its Czech buyer faces scrutiny over potential links with Russia.
Daniel Kretinsky’s £3.4 billion deal to snap up the postal service’s parent company has been thrown into question after a government probe was launched this week.
The takeover process to buy International Distribution Services (IDS) was formally suspended yesterday and will not resume until all security checks have been completed.
A probe – which will be carried out by the Cabinet Office – is expected to look at whether the UK could be hurt by the private purchase of the formerly state-owned postal service.
And it could mean the deal is blocked, which would stop Royal Mail falling into foreign hands for the first time since it was set up by Henry VIII in 1516.
But reports from the BBC have suggested Mr Kretinsky’s links to Russia could also pose a hurdle.
The billionaire’s companies own a stake in a gas transmission business called EUStream, a Slovakian pipeline that carries gas from Russia to western Europe and Ukraine.
It is understood his companies do not buy Russian gas or have business dealings with Russia.
But insiders have suggested the investigation will be comprehensive because the tycoon is buying the whole company. The probe could take up to two months.
Suspending bids is a routine process any time the Government reviews a takeover.