Tough questions we must ask in this changing takeover scene

Companies have their ways of dealing with these issues and talking in public does not figure highly among them. But an intriguing recent development, and building on the theme of the vast amounts of money accumulating in the sovereign wealth funds of Asia and the Middle East, is that they may find that rather than going out and unwittingly buying a problem, the problem buys them.

As was noted in Standard Chartered's report on sovereign wealth funds yesterday, transparency is not always the strong suit of these funds.

So what does a company do when it receives a bid that in price terms may look appealing to its shareholders, if it can't quite be sure where the money has come from, or how the company will be run once acquired?

Does it think these issues are only a matter for the shareholders or does the board have a wider responsibility - a duty of care that has to be exercised within the context of that duty but which means price is not everything? Should it recommend such a bid or resist what it considers an inappropriate owner?

The money in these funds is already measured in trillions and they are going to double and redouble in size in the coming decade. How tenaciously should we cling to Western ideas of corporate governance when the cultures with the financial firepower have a different set of values, objectives and guiding principles?

If someone else is paying the piper, will we soon all have to dance to a different tune? being equal, one would expect this to encourage people to buy shares and equity-based instruments. This is good for them and good for the stock market as a whole - not a bad result from a Labour Chancellor. So why has the change generated such flak?

Partly it is because it was presented as an attack on a few rich private equity people, whereas the people it really catches are those who have built up their own business and want to sell it. That is where the collateral damage lies.

It is understandable that they feel piqued their tax rate will move from 10% to 18%. But they also need to keep a sense of proportion. They will still be retaining 82% of the proceeds - not as good as 90%, admittedly, but still not a bad deal. It is also a much better deal than the one available in many other countries.

Some of the critic's claims are also pretty extreme. It is said, for example, that members of save-as-you-earn schemes will be badly hit by the abolition of taper relief. Yet the reality is there are few SAYE schemes where individual holdings are so large they push people beyond the annual exemption. In such cases they can then lighten the burden by phasing their sales into different tax years. The damage is likely to be slight.

The final point is that this is a simplification - albeit one which will, in fact, raise more tax because the existing system had become so riddled with exemptions and avoidance. However, one can see Kenneth Clarke's point in a recent interview that he as Chancellor lost all interest in tax reform when it was made clear to him that there would always be losers as well as winners.

Clarke calculated that the losers, justifiably or not, would always make more fuss, so it was not worth the effort. Alastair Darling will understand what he meant.