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Pearson plc, owner of the Financial Times, has frozen the Libyan Investment Authority's stake in the company following legal advice.

The move follows a UK government order to freeze the assets of Muammar Gaddafi and his family amid reports of Gaddafi's regime violently crushing protests within the country.

According to a statement from Pearson this afternoon, the company "considers that the ordinary shares in the company which are held by or on behalf of the LIA are subject to the order and are therefore effectively frozen".

Freezing the LIA's stake in the company means that its shares won't pay a dividend until further notice.

The LIA aquired 24,431,000 ordinary shares in Pearson in 2010, and the company said today it has reason to believe that it may have acquired an additional 2,141,179 shares, resulting in a holding of 3.27 per cent of the company's issued share capital. At Pearson's current share price the LIA's stake is worth around £278 million.

Pearson announced its financial results for 2010 yesterday , with the current share dividend up to 38.7p for the year.

Pearson chief executive Marjorie Scardino said on Monday that she was "uncomfortable" with the LIA's holding in the company amid the treatment of Libyan civilians. She added that the company could not choose its shareholders but said that the situation was "pretty abhorrent to everyone who is working at Pearson."

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Written by
Joel Gunter

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