The UK’s Financial Conduct Authority (FCA) has admitted for the first time that it met with Saudi Aramco, the world’s biggest oil company in early 2017.

“We can confirm that we held conversations with Saudi Aramco and their advisors in light of their interest in a possible UK listing in the early part of this year,” said Andrew Bailey, the head of the FCA, on Friday.

The financial regulator’s move has been seen as yet another attempt to persuade the Saudi energy giant to pick London for its stock market listing.

How much is Saudi Aramco worth?

Saudi Aramco, valued at $2tn, is weighing up which financial centre to choose for the sale of five percent of its shares.

In July, the FCA announced proposed changes to its existing regulations — a consultation on the creation a new category within its “premium” listing, exempting companies controlled by governments, like Saudi Aramco, from some rules.

Just three months earlier, British prime minister Theresa May, and Xavier Rolet, the head of the London Stock Exchange (LSE), visited Riyadh to meet Saudi Aramco’s chief executive Khalid al-Falih, who is also the kingdom’s energy minister.

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By GlobalData

May’s meeting, promptly followed by the FCA’s watered down proposals, has resulted in an increased level of scrutiny from two parliamentary select committees.

Nicky Morgan, the Conservative MP who chairs the Treasury select committee, and Rachel Reeves, the Labour MP who chairs the business, energy and industry committee wrote a letter to the FCA, asking the regulator to disclose the extent of government influence on its regulatory decisions.

In a joint letter, they said:

We are interested to explore the rationale for this consultation, particularly given the concerns expressed by shareholders that these proposals would weaken protection for private investors against interference from foreign sovereign company owners.

Bailey has repeatedly denied that he has come under pressure to change any rules.

On Friday, he responded to the letter from the Treasury and Business, Energy & Industrial Strategy committees, insisting that there had been no meetings with ministers about drafting the proposals.

We emphasised during those conversations [with Saudi Aramco] that we were reviewing the Listing Regime.

“We do not think protections for investors will be weakened,” he added.

Morgan said on Friday that questions still need to be answered.

Questions remain about the level of political involvement in the consultation. The UK’s world-class reputation for upholding strong corporate governance mustn’t be watered down.

She said Bailey will be subject to further questioning later this month when he appears before the Treasury select committee.