Bradford & Bingley investors not entitled to compensation, rules valuer

The independent valuer of Bradford & Bingley says shareholders are not entitled to any compensation for the loss they suffered when the bank was taken under government control in 2008.

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by Deborah Hyde on Jul 05, 2010 at 17:09

Former Bradford & Bingley shareholders are not entitled to any compensation for their loss when the bank was part-nationalised in 2008.

In a brief statement, Peter Clokey, the independent valuer of Bradford & Bingley and a partner at PricewaterhouseCoopers, said this afternoon no compensation was payable by the Treasury.

B&B was taken into public ownership on 29 September 2008. Its shares last traded at 20p but the B&B Shareholders' Action Group think shareholders deserve a valuation of at least 55p and say anything less than that is tantamount to theft.

More than one million shareholders lost money when the bank was part sold, part nationalised during the financial crisis. Some of them had subscribed to a Bradford & Bingley rights issue in July 2008 and believe they were misinformed about the group’s finances at the time.

Others are outraged the government sold the bank's £20 billion savings business to Spain’s Santander for £612 million but shareholders received no compensation and no shares in Santander whose profits were boosted by the acquisition.

Richard Jennings, spokesman for B&B Shareholders Action Group, said: 'Peter Clokey has today delivered a damning verdict on the rights of UK shareholders. This is a very sad day not just for B&B shareholders but UK shareholders in general.'

He said Clokey's determination bears no economic resemblance to the value of the bank at the point of nationalisation.

'We have always, and continue to assert that the bank was both adequately capitalised and solvent when taken into government ownership,' he said. Clokey claimed that was also the view of former chief executive Richard Pym.

Law firm Leon Kaye is considering whether shareholders can make a legal claim against Bradford & Bingley that is not covered by Clokey's judgement. Treasury documents show PwC will receive a maximum fee of £4.8 million for the valuation.

His findings echo the result of Andrew Caldwell's valuation of Northern Rock. Caldwell said former Northern Rock shares were worthless in February 2008 when the bank was taken into state ownership.

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5 comments so far. Why not have your say?

My shares in B & B and Northern Rock were STOLEN by Gordon Brown and his gang of robber barons. Together they accounted for 20% of my pension pot, and I will curse him to my dying day and beyond.

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I reckon you can add the Dunfermline Building Soc. to these.

Labour, what a bunch of haddies. Thank God we now have some sanity in Government. And Brown, the economics genius. Jesus wept.

Luckily, I did not have a big stake in B&B. Or A&L.

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So all these miscreants be they Gordon Brown, Fred the Shred, Adam Applegarth et al ride off into the sunset completely unscathed with futures secure. The rest of us are left holding piles of worthless share certificates, lives in tatters and there is nothing we can do legally.

I was looking forward to early retirement and have now ended up on the scrap heap, unemployed at 61, £130,000 of irrecoverable "investments" and in receipt of pension credit as my reward for over 40 years of toil. I am being pressed by the banks for unsecured debts and they are eyeing up my home which thankfully is still in mortgage!! These are the very people we all bailed out but no one is prepared to bail out the little guy.

No wonder some people snap and take the law into their own hands. At my age whiling away the rest of my life behind bars with all creature comforts taken care of looks more appealing by the day.

We want justice but that will never happen. Hope they all contract some long, painful,incurable disease and die in agony!!!

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History will repeat itself & the little guy will become the slave . There will be a ruling class to decide about our faith. B&B stolen shares are just the tip of the iceberg. Have you ever thought about the decision makers? They look after each other.How on earth can Mr Clokey say the shares were worthless?How much was he paid?

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Gerico41

Jul 06, 2010 at 13:49

I was also a shareholder in B & B and other well known businesses which have failed. That is an acceptable risk.

The unaceptable element of recent failures has been the absence of management and auditing accountability which enabled the business to operate without informed investors being able to evaluate the true risks.

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