UKSA supports Northern Rock shareholders in fight for justice
by Gill Montia
Northern Rock shareholders are beginning their legal action over the terms of the bank’s nationalisation.
The UK Shareholders Association (UKSA), which represents the country’s small private investors, has confirmed that it will promote the interests of approximately 150,000 small shareholders who are demanding a judicial review of the compensation terms offered by the Government.
It is understood that hedge fund SRM, which held a 12% stake in the bank, will file a similar application.
Northern Rock was nationalised in February of this year after five-months of turmoil during which bidders, including Virgin Group and investment firm Olivant, spent large amounts of time and money putting together failed rescue packages.
Without mincing its words, UKSA claims that: “The nationalisation of a solvent business to which the Government had lent money on commercial terms … is unprecedented. We suggest this has been done …. to enable the Treasury to make a substantial profit in due course.”
The Government is proposing that compensation for Northern Rock’s shareholders will be set by an independent valuer named by the Treasury, who will be assuming that the business could not continue as a going concern.
Meanwhile, UKSA believes the terms of the nationalisation breach both UK legal precedents and European law on human rights.