Rock coverage in latest Private Eye

The Northern Rock gets considerable coverage in the latest issue of Private Eye (25 January 2008). We reproduce here the photo from page 3, which tickled us.

"The rescue plan is a lot more appealing than the alternative - nationalisation."

Northern Rock Small Shareholders' Group founder Robin Ashby made an appearance in an article in the Daily Mirror yesterday about the Rock. Robin set out the position of the NRSSG:

The rescue plan is a lot more appealing than the alternative - nationalisation. That would sound the death knell for the Northern Rock name and be a disaster for the bank and its employees. It would also do much damage to Britain's reputation as an international financial centre. It could also signal the end of the Northern Rock Foundation. This pumps around £20million a year into regional charities. In short, it would be a disaster. The Chancellor's proposals hold out prospects that the investments of small shareholders might be worth something in the long term. It gives the three would-be buyers a platform to come up with firm proposals in the tight timescale set. I think small shareholders would favour the Olivant bid because it offers us the most realistic prospect of maximising our stake. We could have sold out but we didn't because we believed in The Rock then - and we believe in it still.

Robin's contribution was counterpointed against one by Matthew Elliott of the Taxpayers' Alliance. You can view the article in full on the Daily Mirror website.

Welcome to the Northern Rock Small Shareholders' Group Blog

Welcome to the new NRSSG blog. We hope to use this to communicate with our members but also to post up occassional news stories and also to give you the opportunity to comment on the latest developments.

Please let us know by adding comments to this post if you have any feedback or suggestions.

Our aims:

1. Our preference is for Northern Rock to remain an independent, publicly quoted business headquartered in the North East, supporting the Northern Rock Charitable Foundation.

2. We are opposed to a 'fire sale' of the company's assets at below true value, and the dismemberment of the business.

3. If the company is acquired, our preference will be for a buyer of the shares who gives us the option of remaining shareholders going forward.

4. We will resist pressure by authorities to compel Northern Rock to actions which are not in the best interest of the small shareholders.

Any small shareholder is welcome to join the group by emailing or writing with the name and contact details of each shareholder (if shares held jointly). There is no membership charge.

Northern Rock EGM: Our reactions

From: Robin Ashby, Northern Rock Small Shareholders' Group <nrssg@north-house.com>
To: Northern Rock Small Shareholders' Group
Subject: Northern Rock EGM

You will by now have heard the outcome of the resolutions of the EGM. Shareholders voted two-to-one to suppport the largest shareholders -- but because of the vagaries of the rules, only one motion was formally approved. Undoubtedly, however, this represents a moral victory for us,
and the directors would be unwise to go against the spirit of the motions.

I was greatly encouraged by the meeting. The directors heard the authentic voice of the shareholders. The meeting was held in a frank but polite spirit and I'm sure that we have a renewed community of interest and of purpose between shareholders large and small, and the directors.
Comments made about the employees and the Northern Rock Foundation will have demonstrated to the impartial observer that we recognise we are all in this together. In particular, the addresses made by the heads of the two largest shareholders will have belied the abuse against "hedge
funds" -- they are clearly committed to the business and the future, and confirmed their wilingness to contribute to a rights issue. The chairman had a good touch in his opening remarks referring to having the second-most difficult job in Newcastle!

You will know that I had intended to vote against the election of the directors, but having persuaded them to speak about their commitment to the company, I decided to put my trust in them and vote to keep them.

There is a long way to go still, and we continue to be beset by political spin, but I am confident that the Chairman Bryan Sanderson will do his best to keep the company out of the hands of the government!

Last thoughts before the Northern Rock EGM

Writes Robin Ashby:

Northern Rock has sold off over £2 billion of prime assets. The Unite trade union, from supporting Northern Rock directors against the major shareholders, are suddenly concerned about that self off and the impact on their members job prospects. (Literally, told you so. I had been in discussion with one of their national officials 48 hours earlier on this topic and got the brush off when I raised exactly this worry)

Government-by-leak continues as it seems they have lined up an executive chairman if they decide to nationalise. This would be a tremendous political coup for the Liberal Democrats, who have advocated this outcome as the least-worst for the taxpayer since well before Christmas. It seems they have forgotten that shareholders are voters too! And its a kick in the teeth to Parliament, before whose Treasury Select Committee the Chancellor of the Exchequer appeared last week. He could have put all this on the table, but declined to do so.

The directors continue to spend our money, seemingly without any sense of responsibility towards us. They have commissioned consultants at vast expense to harangue us in our homes to vote against the big shareholders, while urging us to back their unknown placemen and women as non-executive directors. It appears they are splashing out millions in secret bonuses to 179 senior staff. Undoubtedly there could be a retention problem with the most able of them, and some sort of loyalty scheme might well be in order, but the reported figures are disproportionate at best.

Although it is outside of the remit of NRSSG, I have had discussions with local MP Alan Beith, and on Saturday he called for "a detailed inquiry focussed on learning lessons from the debacle." This doesn't go quite as far as some would like, but is certainly a start. I have also pushed Vince Cable MP who is briefing the media today on the matter.

Despite all the media exposure, I can tell you I have had no approach from the company to brief me on anything. Despite this, I continue to feed in proposed responses to media calls to their Press Department so they are not taken unawares. I can tell you however that I spoke again to Luqman Arnold of Olivant last week, and he remains convinced that he and his supporters, working with the support of the major shareholders, can rescue Northern Rock. But time is marching on, and the company is less well placed than when he first offered to step in. (Prime assets sold, extra bonus payments made to staff, pay rises given which will increase redundancy costs, the continuing slow erosion of confidence, a stupid dispute with the major shareholders, a blatant disregard of our interests. How long will this go on? We need to hang together lest we hang separately!)

Regretfully I have to tell you that I have learned only this morning that for many of us whose shares are held in ISAs and PEPs, our votes have already been cast on our behalf by brokers running nominee accounts with discretionary powers. I have had a terse conversation with my own (Wise Speke/Brewin Dolphin) who have voted my wife's shares exactly opposite to what she would have wished. They hide behind the fine print of client agreements which they oblige us to sign even though it can hardly be considered informed consent.

Over the weekend I've done a number of media interviews and today and tomorrow will be solid with them (including US television). Media will be buzzing around the Newcastle Arena tomorrow, and may well ask you if you'd like your say, so be prepared!