The Government appointed an independent valuer for Northern Rock and agreed to foot the bill for £4.5million.
Chosen from a list of ten applicants, Andrew Caldwell, Valuations Partner at BDO Stoy Hayward, will determine how much, if anything, is paid to the bank's 180,000 shareholders.
He will also decide whether he works full or part time on the job – as no concrete timetable for valuation has even been agreed. And he will be paid regardless of how long the job takes him.
This comes after the news that the Government racked up a £17 million bill for consultants in the year 2007-2008.
The bill will be paid by the taxpayer but will be reclaimed from Northern Rock once it has been resold or refloated.
Although the Treasury said that Mr Caldwell had extensive experience of valuing companies, his appointment has been described as "rigged" by shareholders. Roger Lawson, of the UK Shareholders' Association (UKSA), said: "By rigging the valuation in this way, the Government will ensure that the value put on the shares by the valuer will be negligible."
Some estimates have placed a price as high as 400p a share for the Rock holders whilst many are suggesting that the Government will offer close to nothing. On this math, Mr Caldwell will be earning more than the estimated total share price he is in fact valuating.
Telling times….
Northern Rock Numbers
£1.1m Pay and pensions top-up for Adam Applegarth, the former chief
£167.6m Northern Rock’s pre-tax losses for the year to December 31, 2007
£100bn Maximum estimated liability for taxpayers
£4.5m One-off fee to Andrew Caldwell, Rock’s independent valuer
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