Investors of the Northern Rock have petitioned UK appeals court to compel the UK government to reimburse for shares rendered worthless, when the bank was nationalized last year.
Northern Rock’s latest annual report reveals that it had paid £1.2 billion to the taxpayer. The Treasury plans to sell the bank’s good assets very soon. SRM, Northern Rock’s largest shareholder claims that the government is breaching Article 1 of the First Protocole_SLps, and insists that investors should get 400p a share, as reported in Daily Telegraph.
Northern Rock’s largest shareholders, hedge funds SRM Global and RAB Capital, and representatives for 150,000 private investors claim, that the nationalisation of the lender had just rescued a solvent business but did not substantiate government’s ownership, as it left them with only miniscule pay out.
David Pannick, acting for the shareholders, told a three-judge panel of the Court of Appeal in London: “Northern Rock was a solvent business with a strong asset base, which had short-term liquidity difficulties. The UK Treasury seeks to paint for the court a picture of a company that lacks underlying value.”
“The Treasury has prevented the valuer from forming a judgment on crucial facts. The valuer is not able to balance the profits to the state against the interests of the shareholders,” Mr. Pannick added.
