No compensation for B&B shareholders
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Peter Clokey, a partner of PricewaterhouseCoopers says the Treasury does not have to pay compensation to former shareholders of buy-to-let lender Bradford & Bingley.
B&B was hit by a sharp rise in funding costs during the financial crisis, was taken into public ownership in September 2008 and its shares were transferred to the UK Treasury.
Clokey has issued his Assessment Notice in accordance with paragraph 10 of the Schedule to the Bradford & Bingley plc Compensation Scheme Order 2008 after taking into consideration representations from a wide range of groups and individuals.
B&B plc was taken into public ownership on 29 September 2008 when shares in the company were transferred to HM treasury under the Bradford & Bingley plc Transfer of Securities and Property etc.
It was eventually sold to Santander.
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Readers' comments (5)
paul | 5 Jul 2010 6:50 pm
Why did Bradford and Bingley's Chairman Richard Pym at the Treasury Select Committee Banking Crisis Hearing post the Nationalisation.. say.. that B&B was both solvent & well capitalised, no word whatsoever of possible administration from him, was he misleading the shareholders before the nationalisation? one asks.
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Anonymous | 6 Jul 2010 2:50 pm
'The value of your investment can go down as well as up' is the standard disclaimer for shares. Professional investors understand this and will accept the risk. Amateur investors like to tell their neighbours that they have a share portfolio without understanding the risk. You bought shares, they lost value, get on with it.
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Anonymous | 6 Jul 2010 6:56 pm
Previous Anonymous.
Yes indeed the share value went down and it does seem probable that the company would sooner or later not be able to meet its commitments. I'm prepared to accept my loss on that account. However there is one point which as previous shareholder I would like to see addressed:
1. There had been a rights issue only a month before which shareholders were led to believe provided the necessary cash for B & B to continue funded into the next year. If this was not true then it seems to me that something like a fraud has been committed. If on the other hand B & B was funded then we are being cheated now
I'm sure you'll understand that some shareholders believe they deserve at the least an explanation and an apology from the directors who asked for more money only a month before the government moved in to close the company down.
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Anonymous | 7 Jul 2010 12:18 pm
I accept that the shareholders feel somewhat misled but given the global financial climate at that time there were no guarantees that any monies raised would see the company into the next year. Truth is the crisis was unprecendented, not helped by the hedge funds and the likes short selling it. On a given day the directors may well have been right, but as has been proven with other victims of the crisis, a minute is a long time, let alone a month.
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shoolie | 12 Jul 2010 5:28 pm
We too bought shares to help out this company at a time when it must have been obvious to those in the know that it was throwing good money after bad we too feel cheated
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